Skip to main content

The 5G Converged Charging System: A gamechanger for telco charging models and strategies

The 5G Converged Charging System: A gamechanger for telco charging models and strategies

In this third part of our series with Analysys Mason on the 5G converged charging system, we discuss the significant impact of 5G on telco systems and technologies.

The development and widespread adoption of the Converged Charging Systems (CCS) will be a gamechanger for telco monetization systems and has important implications for the future. Key systems and technologies associated with monetization platforms that will be impacted are as follows:

The evolution of billing systems

The billing function remains one of the most mature and most expensive systems for CSPs and has undergone little change for many years. The role and relevance of billing is shifting given the growing number of customers on ‘all-you-can-eat’ bundle plans, and the increasing use of mobile apps to keep track of usage and charges in real-time (rather than monthly invoices). In this context, CSPs are concerned that the majority of the ongoing spend on legacy billing systems is for the upkeep of custom interfaces and integration points. CCS can use ABMFs to provide real-time information on usage and charges to any customer channel, bypassing the need for entirely new billing systems but meeting the customer expectation of up-to-date billing as an essential feature in the medium term. At the same time, CCS provides an interface for connecting with legacy billing systems which will continue to remain relevant for non-5G operations.

The evolution of mediation systems

Mediation functions have remained an important part of the legacy monetization framework. In pre-5G architecture, mediation systems were responsible for collecting data from the network, formatting it and storing it for specific uses mostly related to billing systems. Under 3GPP’s SBA framework, the CHF instead has the responsibility of gathering network information. However, there remains the important task of normalizing the network information so that it can then be used by other systems, including the legacy billing systems. This can be done by including the capabilities of the mediation function within the CHF or, alternatively, retain the mediation function as a separate entity outside the CHF.

Distributed architecture

The growing applications of edge computing are expected to drive demand for charging functions to be deployed at the edge. Edge computing refers to the architectural principle of moving the execution of digital services and applications to the edge of the network, closer to the human user or connected device.  This enhances the user experience and enables the delivery of low-latency applications, while optimizing the economics of implementation. The microservices-based and loosely coupled architecture made possible by CCS will require a CHF that can be deployed at the edge. These microservices will need to be stateless to meet latency and performance requirements. In the long term, CSPs will gain greater flexibility in pursuing innovative revenue and business models.

Monetizing network slices

Network slicing is expected to be an important avenue for new business models and revenue opportunities. 3GPP defines network slicing as transforming a public land mobile network (PLMN) from a single network, to a network where logical partitions are created, with appropriate network isolation, resources, optimized topology, and specific configuration to serve various service requirements. CSPs will be able to support specific use cases on network slices that may require a dedicated set of resources. 3GPP favors a cross-slice approach to charging for network slices. This allows a centralized CHF to charge for events across a number of slices. Release 16 also enables separate charging mechanisms for slice allocation, modification and deallocation, in addition to usage and consumption of services within the slice.

Extensive automation through AI

The high level of human interventions and customizations required in legacy monetization frameworks have been a key reason for the high support and maintenance costs. With CCS, CSPs can enable automatic dynamic pricing and quota management which can help improve efficiency and reduce support costs. In addition, 3GPP has also standardized analytical functions in the SBA with the introduction of NWDAF. This defines how data should be saved and accessed, and includes support for analytics models applied to operational processes, charging data analysis and data monetization opportunities.

 

Download the full whitepaper here.

John Abraham

About John Abraham

John Abraham (Principal Analyst) leads our digital transformation research, including three research programmes: Customer Engagement, Monetisation Platforms and Digital Experience. His areas of focus include customer journeys and experience, the impact of 5G on BSS systems, telecoms enterprise opportunities, cost transformation, ecosystems and value chains, and microservices-based architecture models. John has over 10 years’ experience in the telecoms industry. At Analysys Mason, he has worked on a range of telecoms projects for operators in Africa, Europe, India and the Middle East. Before joining the company, he worked for Subex, a BSS vendor, and before that for Dell in India. John holds a bachelor’s degree in computer science from Anna University (India) and an MBA from Bradford University School of Management (UK).

Connect with John on LinkedIn

Jonah Pransky

About Jonah Pransky

As the Head of the Digital Portfolio PLM, Jonah is responsible for bringing to market the next generation of monetization and customer experience products that enable Service Providers to successfully monetize every revenue opportunity of the 5G digital economy.

In over 18 years serving Communications & Media Providers, Jonah has gained extensive experience analyzing market dynamics in the industry and helping operators drive new growth engines and re-invent themselves as digital service providers. Jonah’s area of focus has been digital experience and transformation as well as products and services monetization.

Connect with Jonah on LinkedIn

Article tags