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The 5G Converged Charging System: The impact of legacy monetization systems

The 5G Converged Charging System: The impact of legacy monetization systems

Over the coming weeks we will publish a series of excerpts from our joint whitepaper with Analysys Mason discussing various elements of the 5G converged charging system.

CSPs need to be able to embrace new business and revenue models swiftly in order to remain competitive against nimble digital companies and attain expected returns on their ongoing 5G investments. Legacy systems and process frameworks are some of the biggest impediments to adopting new operating models. Three key factors will drive CSPs’ ambition to transform their monetization systems framework in preparation for 5G.

Monolithic architecture

Monolithic architecture framework continues to dominate most CSPs’ monetization infrastructure even today. This product framework uses a single indivisible unit which grows as necessary to support new functions and capabilities. Such frameworks are seldom flexible and have limited scalability. While their centralized nature offers some benefits for management and administration, it can also have severe implications for performance and agility as the centralized functions become increasingly complex and separated over time.

Application development and deployment in the monolithic framework model is fraught with risk and uncertainty. Multiple teams are responsible for different parts of the system, leaving no single team responsible for the overall architecture. It is also common for such systems to include elements from multiple vendors, necessitating customized interfaces developed by third parties. These require regular maintenance and are often prone to failure. The data layer is tightly coupled with the business logic functions, meaning that accommodating new capabilities often entails extensive customization.

Some of the fundamental characteristics of monolithic frameworks hamper the operator’s ability to compete effectively and serve customers. Longer time to market is a common consequence, and can be especially damaging for larger traditional CSPs who are competing with digital web-scalers who are able to operate and adapt more quickly. Additionally, monolithic frameworks are unable to make full use of modern database capabilities, or support new information management initiatives, which can be a factor in the timely understanding of customer context and dependency.

High support costs

CSP support functions remain highly complex and intricate, especially for business support systems (BSS). Monetization systems are generally considered one of the most mature telecom software segments. The mission-critical nature of monetization systems means that they remain in use for decades and are seldom decommissioned completely (even if their scope of coverage is reduced with time). Many mid-sized and large CSPs have monetization systems from multiple vendors in their infrastructure – sometimes running on unsupported versions or from defunct vendors. In such an environment, the cost of supporting and maintaining legacy systems are unsustainably high (Figure 2). While in the past CSPs were willing to overlook the high running costs, margin pressures and the need to lower the TCO have made this a priority.

Fig. 1.

The archaic and complex systems have come about mostly because of mergers and acquisitions which brought together inconsistent and independent systems, and ‘best-of-breed’ transformation strategies, which was a popular approach several years ago. This led to professional service providers building customized interfaces and systems to string together platform solutions from multiple vendors. In the short term, this was effective as it allowed the CSP to swiftly master disparate architecture silos but has culminated in high support and maintenance costs. The high support costs also impede CSPs’ ability to invest in future platforms.

Need for real-time interactions

Changes in customer behavior and expectations, especially over the past decade with increased use of smartphones, have made real-time interactions a necessity. Customers have been influenced by their experiences with ‘digital-native’ service providers such as Amazon and Uber that offer complete, immediate, and simple control over their interactions, and instantaneous updates on requests and enquiries. CSPs have already recognized this shift and are investing in a digital customer experience, primarily by converting touch points and providing richer interactions.

Legacy systems constrain CSPs’ ability to make timely launches of new products and offerings, or even provide real-time usage and billing information. Even a few years ago, it was common for CSPs to finalize their Christmas offers by Easter, as it took many months to update and synchronize all the systems. This put severe limitations on CSPs’ ability to compete with over-the-top (OTT) providers and new entrants whose agile platforms allow new plans and offerings to be configured and launched much more swiftly.

 

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

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