The crucial role of policy control and real-time charging. Learn more about Ericsson OSS/BSS: http://www.ericsson.com/realize

1. ▶The use of mobile broadband continues to
skyrocket. Ericsson’s most recent Traffic and
Market Data Report, published in June 2012,
states that in the second quarter of this year,
mobile-broadband subscriptions surpassed
the 1 billion mark, and that data traffic rose
by 14 percent during the first half of 2012.
Between the second quarter of 2011 and the
second quarter of 2012, traffic doubled. Ap-
proximately 40 percent of all phones sold
worldwide in the second quarter of 2012
were smartphones, although only about 15
percent (about 945 million) of the worldwide
installed base of subscriptions comprised
smartphones as of that date – indicating that
there is considerable scope for further
growth in this segment.
This formidable growth illustrates that the
shift toward the networked society is con-
tinuing – and is gaining momentum as more
and more services, as well as things, get con-
nected. Two trends first, the embedding
of mobile broadband in things and second,
the rapid uptake of smartphones – are
­challenging the existing norms of the tele-
communications industry in several re-
spects, as explained below.
1. Introduction of new business models
In the past, communications service provid-
ers (csps) had very simple, consumer-­
focused business models and offered a small
set of services. Today, communications is be-
coming linked to almost everything, and the
way in which both consumers and industry
in general are using communications is forc-
ing a change in business models. The most
significant change in csp business models is
the transition from a one-sided (consumer-
focused) model to a two-sided one facing
both consumers and businesses, in which the
csp is becoming part of the business of oth-
er enterprises, such as companies operating
in the mining industry.
This two-sided business model involves a
combination of retail and wholesale elements
and a scenario in which partners are also cus-
tomers. Furthermore, it means that the csp
becomes a channel for other services because
it has a relationship with nearly all of
Next generation support systems «« business development
EBR #3 2012 • 49
OSS/BSS explained, part 2:
Seizing new business opportunities
The first article in this series focused on user experience and how the mobile-broadband trend is making
existing OSS/BSS systems obsolete. Here, in the second part of the series, the crucial role of policy control
and real-time charging is explained.
iStockphoto

2. 50 • EBR #3 2012
business development »» Next generation support systems
the world’s consumers – it would be dif-
ficult to find a better opportunity for busi-
ness growth.
2. Changes in value chains
csps are becoming part of the value chains
for enterprises as communications begin to
be part of the services offered by these en-
terprises. As mentioned above, communica-
tions services are not only for connecting
people, but also for connecting things. For
example, suppliers of mining equipment
have started to embed communications de-
vices in sensory and measurement solutions
– which they in turn sell to mining compa-
nies. Suddenly the csp has become part of
the value chain for mining and processing
raw materials. This means the csp has the
opportunity to develop specific products and
packages aimed at the mining industry, en-
abling the latter to maximize the possibili-
ties offered by connecting things. In addi-
tion, the csp may even be able to take on a
greater responsibility as an ict provider in
the mining industry.
Consumers using wcdma- and lte-­
connected smartphones can now utilize
speeds that are becoming equivalent to those
available on fixed networks. This applies es-
pecially to users located outside of major cit-
ies. This means that many services that were
formerly available only for pcs with high-
speed fixed-internet connections are now
also available on mobile devices. This in turn
means the csp is part of the value chain for
these devices – and because it owns the con-
sumer relationship for them, it can be an ac-
tive party, taking on the roles of channel pro-
vider and value-adding provider in relation
to what are often referred to as over-the-top
(ott) service providers.
Many analysts agree that, in the near fu-
ture, 90 percent of the data traffic in global
networks will be video. It is thus safe to as-
sume that video on demand (vod) will make
up a large proportion of this video traffic –
and that a fair share of it will be ott. This is
already evident given the number of ott
vod offerings currently available, such as
Voddler, Netflix, Hulu and film2home, to
name but a few.
In terms of the relationship between the
ott service provider and the csp, the for-
mer wants to reach the latter’s mobile-broad-
band subscribers, and as a result, the csp
­becomes a channel for the ott service pro-
vider. Being a channel means being part of
the value chain and having an active role in
it. The csp’s role is to make its subscribers
and resources available to the ott service
provider so that the latter’s users benefit
from a simpler and more predictable expe-
rience when browsing and consuming avail-
able ­video content. This requires integration
between the csp’s oss/bss and the systems
of the ott service provider. This integration
makes it possible for the ott service provid-
er to use the csp as a channel so that the csp
provides value to the ott service provider
and the latter’s users – who are also the csp’s
subscribers.
3. New go-to-market models
In the 1980s and 1990s, csps had a very sim-
ple go-to-market model, and even though
some mobile csps also used companies
known as service providers (a model that was
popular in the uk), the models employed
were simple. In terms of the mining exam-
ple above, it is plausible to imagine a scenar-
io in which the mining equipment provider
and the csp have a partnership that enables
them to serve the mining segment efficient-
ly. The csp thus uses the mining-equipment
provider to enable it to target the mining seg-
ment, supplying that segment with machine-
to-machine devices.
In the consumer segment of the market, a
variety of cases already exist that demon-
strate how csps have embedded communi-
cations functions in consumer devices. For
example, the Amazon Kindle e-book tablet
includes a 3g subscription bundled with the
device. This example is especially relevant
because the Kindle user has no formal cus-
tomer relationship with the csp for this em-
bedded communications function.
4. A greater variety of service offerings
Points one to three above indicate that csps
are increasing the number of offerings they
provide so that they can target a wide range
of new users and partners. Specifically, csps
are targeting industries they have not served
to a significant extent in the past, and pro-
viding them with devices targeted to their
needs. All of this must be enabled by the
csps’ oss/bss systems.
In the examples above, the csp is using a
basic set of communications services in
“Combining policy control and real-time charging enables csps to provide
­competitive differentiation and maximum flexibility without having to
make significant changes to the way they do business.”

3. EBR #3 2012 • 51
Next generation support systems «« business development
­various ways to exploit the potential of the
emerging networked society. The csp must
be able to use its oss/bss to create and man-
age a variety of offerings both to consumers
and businesses.
The business support functions within
oss/bss play an essential role in providing
the flexibility that csps will need in the fu-
ture. Policy control is used to control access
to various services, create virtual networks,
and control the flow of traffic through mo-
bile, core and fixed networks. It is also used
to make sure devices and their subscriptions
are utilized and receive service according to
the terms and conditions defined in the sub-
scription package. For example, a user whose
subscription is intended to be utilized in the
mining industry should not be able to watch
videos on a tablet. Similarly, a tablet user (as
in the Kindle example above) should be iso-
lated from the network used by mining-­
industry subscribers. Finally, when a device
used in the mining industry and a Kindle are
served by the same communications infra-
structure, one device should not affect the
service supplied to the other. All this is made
possible with policy control.
Spending control
Asmentionedinthepreviousarticleinthisse-
ries,anincreasingnumberofconsumerswant
to control their spending. In addition, opera-
tors are clearly making the shift to differenti-
ated mobile-broadband offerings targeted at
smartphones,tabletsandpcs respectively.Al-
though the industry is still at the beginning of
this journey, it is clear that online real-time
charging is required for most users to assure
them of a positive user experience and give
them control of their spending.
Combining policy control and real-time
charging enables csps to provide competi-
tive differentiation and maximum flexibility
without having to make significant changes
to the way they do business. Consider, for
example, a case in which the sim card for a
user employed by a mining company is in-
serted into a tablet. First of all, the tablet
should not be allowed to connect to the in-
ternet. As a result, when the tablet is
switched on, the service provider’s policy
systems will deny internet access, but the
tablet’s browser will also be redirected to the
csp’s portal, where the user will be informed
that the subscription does not include
­internet access for tablets. It is important to
recall that the sim card is an asset for the csp
and that the latter should always be prepared
to up-sell in relation to it. In this example,
the csp should attempt to up-sell on the sim
card by giving the user the opportunity to
change the subscription. If the user is inter-
ested, they should be presented with a set of
offers to consider. If they then select an ­offer,
the subscription will be changed from a
mining-­industry subscription to a consum-
er subscription. The policies and charging
parameters must be updated in real time so
that the user can start surfing.
Although the above example may seem
far-fetched, this kind of situation may very
well happen in many business constellations
in the future. It illustrates the importance of
ensuring that policy and charging functions
work together – to protect the interests of
the csp and the mining-infrastructure pro-
vider, and to ensure that the csp has the flex-
ibility needed to seize new sales opportuni-
ties as they arise. In this example, it is also
essential that the subscription contract as
well as the parameters in the device and net-
work can be changed immediately. The ­user’s
expectations should be the factor determin-
ing when a subscription can be changed.
These changes are made by what are known
as fulfillment functions in oss/bss. These
functions will be covered in the next article
in this series. ●
References
• OSS/BSS explained, part 1: It used to be simple; now a massive
­transformation is required, Ericsson Business Review No. 2, 2012
• EricssonTraffic and Market Report, August 2012:
www.ericsson.com/traffic-market-report
Author
▶ Jaco Fourie
is Senior Expert Business
Support Systems at
Ericsson’s Business Unit
Support Solutions. He
focuses on the evolution of
the company’s Operations and Business Support
Systems portfolio to meet the demands that the
Networked Society will impose on next-generation
support systems. Fourie began his career in data
communication in the 1980s, working with the
X-Series Standards for packet-switching. In the early
stages of the introduction of GSM, he joined MTN
South Africa and focused on value-added services
and charging. He joined Ericsson in 1999 as Head of
Product Management for Charging Systems.
(jaco.fourie@ericsson.com)
Part 3in the upcoming
issue of EBR (No. 1, 2013)
will address the fulfillment
functions in OSS/BSS.