In a 5G world, can your convergent charging system do these six things?

CSPs will need new charging engines. They need to replace the 'flat rate subscriptions' model that characterizes the 3G/4G era with a QoS approach.

Guest author

April 14, 2023

6 Min Read
In a 5G world, can your convergent charging system do these six things? periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Ari Banerjee, SVP of Strategy at Netcracker, explores one of the key challenges for telcos in the 5G era: monetising quality of service and experiences, rather than just connectivity. 

Imagine a world in which the traditional limits of connectivity all but cease to exist. Mobile broadband is available everywhere. It extends into remote areas, is super-fast and always-on. And as for latency? Well, it’s negligible when needed. This is, of course, the promise of standalone 5G. And it’s coming soon. The GSMA says 5G will be available in more than 30 countries this year. Around half will be 5G standalone networks. Meanwhile, according to the Global Suppliers Association, 99 operators in 50 countries are currently engaged in trials and deployments.

What will be the impact of universal connectivity with so few restrictions?  Well, according to many, the answer could be a Fourth Industrial Revolution. 5G will have the ability to connect everything from complex machines in heavy industry to simple sensors in the remotest locations. As such it will power the biggest growth markets of the 21st century: drones, remote healthcare, smart cities, autonomous vehicles and more.

Time for a re-think on charging

Communications service providers (CSPs) have a chance to play a central role in the development of new thinking around the way goods and services are made and distributed. Exciting, but also very challenging. Why? It comes down to this: for most of their existence, CSPs have played the role of utilities, mostly selling connectivity and finding different ways to monetize that connectivity. However, in the 5G and digital era, the monetization strategy must change to one that focuses on quality of service (QoS) and experiences – and partnerships will be central to this strategy.

CSPs will need new charging engines. They need to replace the ‘flat rate subscriptions’ model that characterizes the 3G/4G era with a QoS approach. By embracing 5G convergent charging solutions, they can unlock the true value of standalone 5G. And this value is considerable. According to one industry report, QoS-based charging can deliver short-term ARPU increases of up to 20 percent.

It seems the message is getting through. Omdia’s 2021 ICT Enterprise Insights survey found that 47 percent of CSPs are planning to increase their spending on converged charging systems. Having made this decision, the key question for these forward-looking CSPs is to define the parameters of their new platforms. We believe their systems should meet the following six criteria:

1. Monetise every conceivable 5G attribute

In a world of 5G network slicing, telcos should have the flexibility to apply slice-specific charging by device type or by session quality (based on QoS information or service level agreement). And this should extend to access-based fees – one-time charges for registrations in a specific network slice. Also, to enable new 5G use cases, the CCS should have the ability to interact with multiple 5G network functions – AMF, NEF, NWDAF – and evolving functions not yet specified by 3GPP.

2. Require little or no customization

As stated above, the big promise of 5G lies in its ability to transform multiple verticals and support new ones. For telcos to grasp these opportunities, they need to be flexible. They cannot rely on the dedicated development and heavy customization of traditional online charging systems. Instead, they should build CCSs that are truly adaptable. That demands a system with intuitive GUI-based no-code configuration.

3. Charge for new units of value – beyond the megabyte

If the future is all about the quality of service, then telcos must consider what they are charging for. The megabyte may have been right for the 3G and 4G eras. 5G demands a more imaginative approach. Consider the example of HD video streaming or cloud gaming. Here, it might be more appropriate to charge by the length of session than by the data consumed. What’s more, CSPs must be able to extend this billing capability to their B2B partners.

4. Support low latency edge use cases

Low latency at the edge is the ‘superpower’ of standalone 5G. It will be the factor that makes possible the most advanced new industries where lag cannot be tolerated – autonomous motoring and telehealth for example. With this in mind, the mobile industry developed the Ultra-Reliable Low Latency Communications (URLLC) standard. When it comes to charging, CSPs must distribute their URLLC system capabilities to the edge. This way they can identify discrepancies and take action to meet guaranteed service levels. In addition to that in the context of edge-based services charging has to not only cover telecom network usage but also extend to cover adjacent services. Take for example a service that contains elements of network consumption alongside mobile edge compute utilization. Subsequent charging for that service must clearly and accurately reflect both the network usage and the compute resource consumption.

5. Turn charging itself into a profit center

If a charging system has the power to unlock new revenue opportunities, it follows that it can become an asset in itself. Forward-thinking CSPs are already thinking about how to turn their platforms into profit centers. By developing charging-as-a-service, they can generate new revenue from a multitude of partners.

6. Respond in real-time to changes in demand

Flexibility is one of the great benefits of 5G convergent charging solutions. A legacy system might provide some smart capabilities, but with cloud-native online charging, the analytical intelligence is baked in. This makes a huge difference. It lets the CSP monitor supply and demand, anticipate changes in customer behavior, and optimize available hardware resources and prices dynamically.

After four decades, the end is nigh for static ‘flat rate subscriptions’ and a solitary focus on the megabyte as the unit of value. A new era is coming, one characterized by flexible dynamic systems. CSPs that invest now in 5G convergent charging solutions will return their investment many times over. And they might even play a central role in a 21st-century industrial revolution.


Ari-Banerjee-picture-150x150.jpgAri Banerjee works for Netcracker as Senior Vice President of Strategy, responsible for the company’s strategic direction and enabling it to address changing market and technology opportunities. He is responsible for all aspects of Netcracker’s strategic initiatives across its BSS/OSS and SDN/NFV business lines, including customer, product and technology management, market direction and corporate communications. Ari interfaces with CTOs and CIOs at customers and prospects to ensure the alignment of technology, products and services while providing strategic input to the CTO office, product management and R&D teams. In his role, Ari collaborates with industry organizations, standards bodies, media and analysts and is responsible for running marketing and strategic partner programs for Netcracker.


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