Playing fair could be the key to winning big in 5G
Since our industry first started talking about 5G, there has been a huge amount of focus on 5G monetization. Communication Service Providers (CSPs) have made significant investments in the roll out of the 5G network, and so naturally, want to make sure they get a return on their investment. CSPs, and so telecommunication software vendors, have been focusing on which new 5G services they can offer to capture additional revenue, and how their Business Support Systems (BSS), and specifically their charging systems, need to adapt to support these. Though important, this narrative misses out on a key area for CSPs when it comes to 5G monetization, that of efficiency and fair pricing, and how those can benefit CSPs in the longer term.
Efficiency is a big piece of the monetization puzzle
The charging system is a key function of the BSS that allows CSPs to effectively monitor and charge their customers according to pre-defined parameters. When it comes to 5G monetization, this system needs to be flexible, agile, and scalable, to support new 5G services. But this isn't enough, it also needs to be efficient, so CSPs can optimize their network capacity to provide the high levels of connectivity that their customers expect.
So, how can CSPs achieve this efficiency with their charging system? At DTW Asia a couple of months ago, we won a catalyst which included our intent-based charging, and we've passed the qualification phase to take part in the next phase at DTW Copenhagen in September. We showcased how monitoring network resources as a representation of the business intent, by comparing the actual usage with forecasted usage, can optimize network usage and allow CSPs to price and charge their customers fairly.
To do this, the CSP sets low and high thresholds for resource use, and if the business intake goes as planned, the resource usage falls between these thresholds. In this case, allocated resources are used optimally, and there is no reason to modify the price.
However, in cases where business is booming or when business is lower than expected, this can be charged differently. In a case of usage above the high threshold, businesses often pre-set a price to charge this, but the case of lower usage is frequently ignored. The customer is charged the same amount, allowing scarce network resources go to waste and customers to be charged for more than they are using.
In the example of under-usage, there is a better way to use idle resources: either shut them down completely to save energy or release them to service additional customers. This can be done by offering a decrease in price when the resources usage is lower than forecasted over a defined monitoring period. For the customer, who opted for that type of contract, the price would be lowered, the business intent modified, and the resources released.
This may seem counter-intuitive to the traditional way of viewing customer revenue, however, not only does this allows CSPs to manage their network capacity more efficiently in terms of usage and cost, but it also allows them to price and charge their customers fairly, building trust and customer loyalty, and supporting long term revenue growth potential.
Nokia is leading the way
At Nokia, we are driving the next generation of telco charging with our cloud-native, no code solution that supports the agility and faster time to market CSPs need to monetize 5G. But we are also helping them optimize and efficiently manage their network capacity to enable fair pricing and to provide a supreme customer experience, so they can focus on cost optimization in the short term, and on building customer value and revenue potential in the long term.
To find out more, visit our website.