WHITE PAPER: building the foundation for LTE revenue

© Copyright Openet Telecom, 2013
White Paper
Building the Foundation
for LTE Revenue
Evolving Legacy IN Charging and Billing
Systems to Accelerate Service Innovation

White Paper - Building the Foundation for LTE Revenue
Index
Index 2
Introduction 3
Why Evolve Legacy IN Charging and Billing Systems 4
Challenge 1: Lack of Real-time Support and Flexibility, Essential for High Speed Data
Monetization 6
Challenge 2: Slow Time to Market and Limited Support for Marketing Initiatives 6
Challenge 3: Lack of Convergence and Ability to Provide an Integrated Customer Experience 7
Challenge 4: High Cost 7
The Five Pillars of LTE Revenue Generation 8
1. The Central Pillar of High Speed Data Monetization - Real-time Charging 8
2. Enabling Context-Sensitive Offers and VoLTE – Integrating Real-time Charging with Policy Control 9
3. Understanding Customer Behavior and Context – the Role of Real-Time Intelligence 10
4. Offering the Ultimate Purchasing Experience and Stimulating Spend – On Device
Sales/Purchase and Interaction 11
5. Convergent Architecture and Ease of Interoperability to Deliver Real-Time Charging to all Customers 12
Conclusion 13
2 © Copyright Openet Telecom, 2013

introduction
This whitepaper discusses the necessity for operators to evolve their current Intelligent Network (IN)
charging and traditional billing in order to have the foundation in place to really profit from the rise
of high speed data / LTE. It examines the revenue-generating infrastructure that operators require
with the advent of LTE, the five pillars of such infrastructure, and the central role of convergent real-time
charging. It also analyses the challenges they face with current IN charging and traditional billing
infrastructures in a data-centric world, in light of their key strategic goals (Figure 1) and highlights the
redundancy of IN platforms as Voice over LTE (VoLTE) is introduced.
Figure 1 - Operators’ Key Strategic Goals
Many operators have already taken steps to evolve their legacy charging infrastructures to better
monetize LTE. For example, in North America, Bell Mobility had updated their infrastructure prior
to evolving to LTE, adding a scalable, real-time charging infrastructure to roll out a broader array of
personalized pre-paid and post-paid services. This new deployment was a key enabler for revenue
growth for Bell and consists of a 3GPP compliant Online Charging System which incorporates
Convergent Real-time Charging, Rating, and Balance Management. There are similar examples in
Europe and the developing nations; A1 Telekom Austria for instance deployed convergent, real-time
charging and policy control platforms, making it possible for their subscribers to benefit from
enriched and innovative services that will enhance the customer experience.

Why evolve legacy IN charging & billing systems
The challenge of high speed data and the advent of VoLTE
With 100 million LTE subscribers in 2012 and 381 operators currently investing in LTE (including 234
commercial launches) in 114 countries (source: GSA, Evolution to LTE Report 2013), LTE has been
growing much faster than predicted (Figures 2 & 3), driving more volume, more complexity, and more
use cases. For both 3G and LTE operators to maximize revenue, it’s paramount to put in place the
right revenue-generating infrastructure now in order to make the most of LTE speeds - as a recent
survey by Informa Telecom (source: Informa, Succesful LTE Strategies 2012) has clearly shown that
LTE itself does not create new revenue streams.
Figure 2 - Global LTE Subscriptions by Region, 2011-2016
The speed and data-led services that high speed networks like LTE drive present a challenge to legacy
Intelligent Network (IN) charging and billing infrastructures, originally designed for simple voice
transactions. These systems have found themselves quite limited in their ability to cope, let alone
to provide the flexibility, real-time capability, and support for innovation that operators require in
an increasingly data-centric fast world. These limitations directly affect operators’ ability to quickly
and cost effectively create innovative revenue streams, and provide a seamless revenue-generating
experience to their customers. Convergent real-time charging systems have therefore been
introduced to enable operators to better monetize data and their overall services.
Figure 3 - Number of Global LTE Subscribers Forecast
As Voice over LTE (VoLTE) is introduced (Figure 4), it won’t be possible for operators to maintain
legacy IN charging systems which were originally designed for traditional voice services, as they are
inherently unable to handle data, VoLTE being a data service.

Figure 4 - Primary Solutions for VoLTE
In a word, operators need to review their current IN charging and billing infrastructures in light of
their strategic goals (Figure 1), taking into account upcoming VoLTE services. The time for this is
now to avoid further investments in already costly IN platforms that are not adequate for their most
lucrative and soon only source of revenue - as everything becomes data.
Below the top five challenges most legacy charging and billing infrastructures are faced with in the
context of LTE. Most of them are derived from their inherent inadequacy for high speed data as well
as their silo based architecture, with:
yy Post-paid billing systems, consisting of mediation, rating, billing, which are typically batched,
software based, and reside within the IT domain
yy Intelligent Network (IN) pre-paid charging platforms, which are hardware based and were
introduced a number of years ago within the core network to provide the real-time capabilities
needed to manage, rate, and charge for traditional voice services

Challenge 1: Lack of Real-Time Support and Flexibility, Essential for
High Speed Data Monetization
By their nature, 3G+ and LTE networks enable high speed data services that generate very high
volumes of transactions and require strong real-time capabilities to meet and monetize the demands
of customers who want it all now; real-time charging is central to flexibility and innovation.
However, IN pre-paid charging platforms do not cost effectively support the fast processing and high
scalability that 3G+/LTE data services require. A traditional voice service would typically generate
one record per call whilst a single data session can generate multiple transactions that need to be
processed in real time. Also, legacy post-paid billing systems do not support real-time charging, which
is why IN pre-paid charging platforms were introduced in the first place.
Furthermore many IN platforms were designed to only charge by volume/time and are often unable to
support more sophisticated charging models based on content/third party applications, context and
value. This is required to deliver maximum value to customers and subsequent revenue to operators
(e.g. a movie at a fixed rate—the related traffic should not be charged for or counted against the
subscribers monthly volume threshold).
Although many, if not all operators have tried to charge for data using their legacy infrastructures,
most ended up with solutions that are often not viable and not flexible, as well as being both time
consuming and costly to develop (e.g. bits have been converted into minutes/seconds to charge
for data). As operators’ business models evolve and charging requirements become more complex,
charging and billing platforms must also evolve to make it simpler for operators to innovate and
better monetize high speed data.
Challenge 2: Slow Time to Market & Limited Support for Marketing Initiatives
In an increasingly dynamic environment, where service introduction cycles need to be faster and
faster to seize market opportunities and up/cross-sell at the most opportune time, time to market
is critical for operators revenue maximization goals. Distributed legacy infrastructures tend to cause
delays as, for instance, multiple systems need to be configured to launch the same service to different
types of customers or to apply any changes. Furthermore, IN systems tend to have long development
cycles and operators depend on the IN vendors to create each new service.
A recent survey by Telecoms.com Intelligence and Openet highlighted that 80% of operators (from a
survey of over 200) felt that existing billing systems restricted operators from getting new products
and services launched fast enough (Figure 5).
Figure 5 – Survey Results: Are Billing Systems Holding Up Business?

Challenge 3: Lack of Convergence and Ability to Provide an Integrated
Customer Experience
Customer experience is a key competitive differentiator for operators as they strive to deliver a
compelling experience that stimulates loyalty and spend— something which legacy IN charging and
billing infrastructures do not support effectively. First, with a silo based infrastructure, operators
cannot usually offer seamless services to all their subscribers across payment types, networks, and
devices, or offer them multiple payment options. This can result in frustration and churn. For example,
some operators don’t enable roaming for certain services for pre-paid subscribers; vice versa, post-paid
subscribers may not enjoy real-time advice of charge offered to pre-paid subscribers.
Furthermore, as subscriber data is distributed in different systems, operators may not have a single
view of an individual subscriber; this makes it difficult to up/cross-sell effectively and to provide them
with full visibility over all their services and usage/spending, which is a key loyalty driver. Worse, the
same subscriber is often treated as a different one depending on whether their queries relate to their
pre-paid or post-paid services. By being able to offer multiple payment options and services across
their customer base, operators will not only better satisfy their customers but also increase their
revenue base.
Challenge 4: High Cost
In addition to increasing revenue opportunities to maximize return on network investment, operators
also need to better control costs and remove as much unnecessary IT and B/OSS expenditure as
possible. Not only are IN systems known to be high cost as proprietary and single network access
hardware, but also the distributed nature of legacy infrastructures makes them very costly to manage
and maintain. This cost accelerates when operators add custom developments to these systems in
order to try and cater for high speed data models—knowing that they remain inherently inadequate,
this process could be endless. It is more cost effective for operators to use flexible software based
solutions that are specifically designed for high speed data.
The review of the limitations of legacy IN charging and billing infrastructures clearly highlights the
necessity for operators to evolve these infrastructures in order to meet their strategic goals in the era
of LTE.

THE FIVE PILLARS OF LTE REVENUE GENERATION
Below are the five pillars that will enable operators to create a sustainable and dynamic revenue
generation environment:
Figure 6 – The Five Pillars of LTE Revenue Generation
1. The Central Pillar of High Speed Data Monetization: Real-Time Charging
In the era of high speed data, increasing competition, and ever demanding customers who want it
all now, real time-charging is truly not optional. It is not only a necessity but also an opportunity to
create more revenue streams from both prepaid and postpaid customers. A recent survey by Informa
Telecom sponsored by Openet (source: Informa, The Future of Mobile Data Billing 2012) showed that
most operators agree with this statement but only 10% of them had real-time capabilities in place for
their post-paid customers.
With an evolved, real-time charging platform, operators will be able to quickly define and launch
innovative dynamic services and promotions to generate new revenue streams. It allows them to
easily develop flexible, sophisticated charging models that can incorporate third parties, to define
these offers, and launch them in a single place for all subscribers and all services, regardless of
payment methods or type of services.
By breaking down the payment silos, operators will not only be able to achieve faster time to market
but also broaden their revenue base and better respond to customers’ needs: e.g. hybrid accounts,
payment via credit cards, Paypal, or loyalty points.
Enabling Dynamic Services
“Dynamic Services” refers to the ability to create, present and charge for data services dynamically
to reflect real-time customer usage and their preferences (figure 7)—this is the path to 3G+ and
LTE revenue maximization. As an example, a leading EMEA operators used data roaming service
passes to encourage roamers to use data and increased data roaming revenues by 35%.

Real-time charging is central to high speed data monetization; however its integration with policy
control is essential not only to maximize profitability but also to accelerate innovation and create truly
dynamic services (figure 7) that takes into account the customer context.
Figure 7 – Dynamic Services
2. Enabling Context-Sensitive Offers and VoLTE: Real-Time Charging
Integrated with Policy Control
To effectively monetize the rise of high speed data, operators need to be able to create more
innovative, value-based services that can be offered at the right time to the right person. This means
truly dynamic services (Figure 7) that take into account the customer context in real time—This is
made possible with real-time charging integrated with policy control.
Context concerns information on the subscriber, their usage, and their experience on
the network. This can include personal information (e.g. birthday), service subscribed, usage,
special offer, location (home/roaming), time, restrictions (e.g. parental control), application
accessed, device, etc.
Information on the subscriber context can also be used to dynamically allocate network resources and
charge appropriately. This enables operators to create new business models that better link revenue
to related traffic and cost. It also allows them to supply an appropriate, uncompromised quality of
service that protects subscriber satisfaction. For instance, a video session would be allocated much
more network resources than a simple e-mail service, and would therefore be priced differently.

Below are some examples of innovative business models enabled by integrated real-time charging and
policy control:
Figure 8 – PCC Enabled Business Models
Delivering VoLTE services also requires a deep integration between Policy and Charging functions.
To ensure a high quality voice service, policy management is required to dynamically manage
unpredictable mobile resources associated with each VoLTE call, while simultaneously ensuring the
charge is based on voice call rates rather than data consumption.
3. Understanding Customer Behavior and Context: Real-Time Intelligence
The first step in enabling Dynamic Services is to understand customer behavior and context by
collecting usage data through on-line mediation.
Traditionally, customer usage information is collected by mediation, passed to charging or billing,
and then sent to a batch based data warehouse for analysis for use in planning and forecasting. This
approach works well for strategic intelligence and reporting. However, customer intelligence on
mobile data usage and behavior needs to be real-time in order to make context sensitive marketing
and up-sell offers. In this case mediation can collect the data usage records, perform a real-time look
up of the customer data in the existing data warehouse, and enrich the usage record with relevant
customer information (e.g. life time value score, churn propensity score, etc). As illustrated in Figure
9, this enriched data record can then be passed to a real-time outbound marketing system that can
trigger, if applicable, a context sensitive marketing offer to be sent to the customer’s device.
A simple example could be an outbound roaming customer who has switched off data roaming. The
PCC system recognizes this, and in real-time, looks up the existing data warehouse and sees that this
customer has a monthly subscription to a music streaming service. This enriched information is sent
to an outbound system which triggers an SMS to be sent promoting a customer specific offer – e.g.
buy a 1 day 50mb data roaming pass, with free access to music streaming service for €3. As well as
providing the real-time data to trigger the context sensitive marketing up-sell, usage records from
mediation provides the data needed to report on network performance as well as feeding usage
intelligence to the data warehouse.

Figure 9 – Real-Time Intelligence
4. Offering the Ultimate Purchasing Experience and Stimulating Spend:
On Device Sales/Purchase and Interaction
Subscribers crave freedom and control over their services/budget. This is the key to keeping them
loyal and making them feel comfortable and happy to spend more on data services. Being able to
communicate context-sensitive offers, providing customers the freedom to purchase and activate the
service at their own convenience, and then giving them real-time visibility over their usage/spend—all
directly on the device—creates unprecedented customer satisfaction. This is the kind of revenue
generating, personalized experience most marketers can only dream of right now. Furthermore, this
can also reduce back end customer care costs for operators, due to fewer bill-shock complaints and
more self-care.
The capability to support multiple interaction mechanisms to meet various customer expectations is
essential to maximizing customer satisfaction. A smartphone application for purchasing and displaying
real-time usage dashboards, combined with a secure interaction gateway between the application and
the Policy & Charging Control network elements, takes customer engagement to a whole new level. To
ensure subscribers are kept informed of the status of their account, real-time notifications also play
an important role; e.g. purchase confirmation, usage alerts. Operators can take this opportunity to
upsell and build loyalty; e.g. invitation to renew the plan, to upgrade, promotions, loyalty rewards etc.
This level of service and transparency can, in particular, help operators to activate dormant roamers
and significantly increase data roaming revenues—knowing that a huge 70% of roamers worldwide do
not currently use data roaming abroad (source: Juniper, Mobile Roaming Report 2012).

Figure 10 – On-device Sales/Purchase
5. Delivering Real-Time Charging to All Customers: Convergence and
Ease of Interoperability
Convergence is fundamental to fast time to market, but also to enabling more flexible business
models and a seamless customer experience. With an evolved charging platform that allows multiple
services to be delivered to all customers over different networks, operators will finally break down
all the legacy infrastructure silos whether pre-paid/post-paid, data/voice, or fixed/mobile. This means
more flexible bundles and also a unified view of all services—to provide full real-time visibility to
customers and better customer care. This also means reduced total cost of ownership, with a single
solution to enable all their service launches regardless of the network access technology.
The prospect of completely eliminating their legacy infrastructure will likely seem daunting to
any operator. The cost effective option is to add real-time charging capabilities to their existing
infrastructure with minimum disruption, thus enabling real-time convergent charging.

CONCLUSION
Given the challenges operators are facing with their legacy, distributed IN charging and billing
infrastructures, they are compelled to evolve in order to more effectively monetize the rising
demand for high speed data, using value based dynamic services for instance. To achieve their key
strategic goals, operators need to build a flexible infrastructure based on five key pillars, real-time
charging being the central pillar. Such an infrastructure also requires policy control to enable context-sensitive
offers and effectively deliver VoLTE. The third pillar is online mediation to enable the real-time
intelligence necessary to create context-sensitive dynamic services. The fourth pillar enables
operators to provide unprecedented revenue generating and personalized experience through
on-device purchase and customer interaction. Convergence and interoperability is the final key pillar
allowing operators to accelerate time to market, create a seamless customer experience, and leverage
their current infrastructure to add real-time charging with minimum disruption. Many operators have
already taken steps to adopt such an infrastructure and are already profiting from it.
About OPENET
Since the introduction of mobile data services in 1998, Openet has helped service providers capitalize
on opportunities and overcome challenges. With competitive pressure accelerating, today’s service
providers rely on Openet software to evolve business models around networking smartphones,
M2M devices, and third party services. Openet’s portfolio combines policy and charging control with
device and third party interaction to enable innovative charging models, to control operating cost,
and to personalize services. More than 80 of the world’s largest service providers in 28 countries use
Openet’s high performance software.
For more information, please visit www.openet.com.
Dublin, IRELAND
Reston, Virginia, USA
Kuala Lumpur, MALAYSIA
Sao Paolo, BRASIL
www.openet.com info@openet.com
Tel: +353 1 620 4600
Tel: +1 703 480 1820
Tel: +60 (3) 2 289 8500
Tel: +1 703 480 1820

WHITE PAPER: building the foundation for LTE revenue

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