Billing for Mobile Data and Content Services

Billing for mobile services has never been simple, but at least in the old days it was mainly about voice minutes. Now—with the introduction of high-bandwidth 2.5G and 3G networks—mobile Internet access, m-commerce and content-enhanced, value-added services have introduced tremendous business opportunities. Someone is going to make money, and there’s a good chance it will be the people who can bill for it.

The Need to ‘Bill for Anything’

Yes—“bill for anything.” For a start there’s m-commerce. M-commerce is different, and sometimes it has nothing to do with the Internet. In Finland you can buy soft drinks, car washes, chocolate and postcards on Sonera’s mobile network. These are things you wouldn’t buy from your PC—you want to use them there and then, on the spot. More importantly, these are small transactions that you wouldn’t think of charging to a credit card. E-commerce replaces shopping, but m-commerce replaces cash. When you buy using a mobile phone the charges appear on your “phone” bill—and who else but the phone company has the expertise to bill large numbers of these small charges?

Innovative wireless carriers like Sonera, BT Cellnet and NTT DoCoMo are billing for all kinds of content-enhanced, value-added services—from ringing tones downloaded onto mobile handsets via SMS, to stock quotes over WAP, to daily jokes and cartoons. In Europe and Japan, customers are paying money every time they use these services.

The distinction between voice, data and electronic content is not clear-cut. For example, news and information services are often delivered via voice messages or SMS. However, there is a clear distinction between basic communication services such as telephony, e-mail and videoconferencing, and value-added services in which a third party provides content. The business market requires a substantial amount of pure data communications billing, and with the introduction of mobile IP networks comes a new challenge. Even the relatively modest improvements in data transfer speeds offered by early 2.5G networks are potentially very attractive to business travelers connecting to the office network for e-mail and access to the company intranet. Because these networks enable an “always-on” connection, business users will have the freedom to pay only when data is sent or received. Pricing will be based on volumes of data transferred, and not on connection time.

However, how many wireless carriers can actually bill for anything appropriately? The truth is they don’t. Having grown up with voice telephony, mobile billing systems tend to have a built-in association with voice minutes and CDRs. And although these systems can sometimes be tricked into billing for other things, they lack the flexibility to price the full range of current and future services properly.

Event Billing

Event billing tackles the general problem of how to bill for arbitrary products whose usage generates events, where events are recorded on a “network” and have attributes that are used to determine their price.

In the case of voice telephony, a mobile phone subscription product generates telephone call events. As well as one-off and recurring charges for the phone service, users are billed for telephone call events based on the attributes recorded in a CDR—typically a per-minute charge that varies with geographical cost bands, time rates, call types (operator-connected, direct-dialed), and so on.

But the rating engine shouldn’t be saddled with a fixed idea about minutes, geography and call types. Instead, the rating problem can be generalized, so that a measure of volume for the event could just as well be megabytes as minutes, and an event class could just as well refer to different QoS levels as to different call types. A flexible, generalized rating engine is able to price many different kinds of event simultaneously, using a different basis to price each one. All that’s required is the ability to define events with their attributes and their “wiring” (or bindings) to a set of general rating dimensions.

If implemented well, the advantage of event billing is that new services and new business models can be introduced without software changes in the billing system. In the 3G world, the price of a streamed movie might depend on the day of the week (more expensive at weekends) and the type of movie (blockbuster, golden oldie). One business model for this scenario would have the movie billed directly to the customer alongside charges for phone calls and other services—a straightforward application of event billing. But an alternative model might have the customer paying directly to the content provider by credit card, and the wireless carrier charging the content provider a percentage commission for access to customers via its 3G mobile portal. Here event billing is useful again, because it doesn’t assume any particular measure of volume for the event. Just as voice telephony could be rated at, say, 10 cents per minute, and data transfer at $1 per MB, so content purchases could be rated at 5 cents per dollar in order for billing a 5 percent commission to a content partner.

M-commerce may require the billing system to price a single transaction differently for different parties. Consider a truck driver who, upon entering a new town, downloads a map with directions to hotels, restaurants and other places of interest. This single download event may generate charges to the restaurants and hotels whose advertisements appear on the map, as well as to the truck firm. There may also be a credit to the map provider. In such a case, the billing system might invoice a fixed pay-per-use charge to the truck firm, a percentage commission to the map provider, and charges to the restaurant and hotel chains based on the number of downloads per month that include their advertising.

Collecting Event Records

Generating event records with appropriate attributes and sending them to the rating engine are essential steps in billing appropriately. The trouble is that these event records may not be generated at the operator’s own portal servers, or even elsewhere on its own network. In fact, event records may not come from a single source at all, but instead may have to be pieced together from multiple records generated in different places.

Consider a customer who purchases a top 10 hit as streamed audio over a GPRS network. In this case, a record of the purchase event may be generated at a server on the Internet, and a separate record of the associated data transfer event will be generated at the GPRS charging gateway. The first challenge for the mobile service provider is obtaining the purchase event record. If the service provider is doing the billing, there is an incentive for the content provider to forward these records in order that customers can be charged for its services. This business model is the basis of the much-heralded competition between the telcos and the banks—it subverts the standard e-commerce model in which the customer pays directly by credit card. The content provider will pay its commission either to the credit card company or the mobile service provider, depending on which is doing the billing.

That settled, customers might demand that the “delivery” charge be rolled into the purchase price. They don’t want to be charged twice—once for the content purchase and once for the data transfer. In order to comply with tax regulations, the service provider may need to keep the purchase event and the data transfer event separate within its own internal accounting system. But the customer wants to see a single line item.

In order to make sure the customer is not charged twice, the data transfer for the music download will have to be identified and charged to the customer at zero rate.

More challenging still, the service provider may be required to offer an end-to-end quality of service guarantee. This would involve correlating records from the GPRS and IP networks to ensure that throughput, latency and other QoS parameters are acceptable for each, and combining these with records from the content server indicating whether the audio streaming completed successfully or terminated due to a server error.

Defining Data Transfer Events

All of this would be hard enough without the additional complication that data transfer records are not discrete items like phone calls. When customers have an always-on connection, multiple data transfer events can be taking place simultaneously, so there will not be a one-to-one correspondence between a particular data download (the music file) and a particular data transfer record from the charging gateway. The definition of a data transfer event is, in fact, rather arbitrary, and it is up to the operator to set this up in a way that supports appropriate pricing of its services.

For example, an operator may wish to price data transfer on its GPRS network according to the following scheme…

A basic price of $1 per MB applies during Business Hours.

· An Off Peak rate of $0.5 per MB provides an incentive for customers to transfer data when the network is less congested.

· A subscription charge of $15 per user per month includes the first 20 MB of Business Hours data transfer.

· Data transfer rates are reduced by 75 percent when users are within their company’s own Office Zone—defined as the cell (or group of cells) on the GPRS network in which the user’s home office is located.

· Data transfer during periods of Failed QoS are priced at a reduced rate of $0.25 per MB

· Pricing for GPRS data services

Suppose the operator offers two classes of service—Acceptable and Failed (the definition of Acceptable quality may vary depending on the customer, but we’ll ignore this complication here). If the QoS parameters are changing frequently on the network, and new billing records are generated every time the network notices a small change in latency or throughput, the rating engine could be unnecessarily strained. Instead, it makes sense for mediation software to aggregate the usage information. For each PDPcontext, the mediation system would map the QoS parameters onto the different service classes, and then produce two discrete billing records (indicating the amount of data transferred at Acceptable and Failed quality). Because pricing depends on other factors (the user’s location and the time of day), a larger number of discrete billing records will be generated for a single PDP context.

In order to support this GPRS pricing scheme, the mediation system might generate records containing (at least) the attributes shown in Figure 2—each event comprising a record of the volume of data transferred at a specified QoS by a customer located in a specified GSM cell.

As we’ve seen, an event billing system could price such an event per megabyte, with the charge rate depending on time of day, APN, QoS and the location of the user.

What about the marketing?

It’s all very well being able to price data and content appropriately, but these new services must also be attractively packaged for customers. In a strongly competitive environment the billing system must act as a marketing tool, supporting innovative discounts, packages, loyalty schemes and bill messages.

Event billing again provides part of the answer, because event attributes passed to the billing database can be used as a basis for discounting. For example, GPRS events could be filtered based on the QoS attribute to apply a bill-time rebate for persistently Failed QoS:

10 percent is deducted from the customer’s data transfer usage charges if more than $50 worth of data is transferred (among all users) at Failed QoS in a given month. The discount increases to 20 percent if more than $100 worth of data transfer misses the QoS target.

· Similarly, a cross-product discount could be implemented where use of the GPRS data services earns a discount on voice calls.

· Companies whose users together transfer more than 500 MB of data in a given month earn a 10 percent discount on all their mobile voice calls for that month.

· For content services, this approach could support supermarket-style discounting of the “buy two, get one free” variety. Volume discounts could be based on the number of purchases made, or the amount spent in a given period. A good event billing system may even support loyalty point schemes analogous to the successful programs adopted by supermarkets, credit card companies and retail chains.

To Sum Up

The highly competitive market for mobile voice telephony is forcing call charges down, whereas innovative new data- and content-based services will be able to command a high margin. The ability to rapidly deploy these new services commercially is therefore important to the continued success of the mobile communications market.

Data- and content-based services enabled by high-bandwidth packet networks will require new business models that are very different from those used in voice telephony. This means that mobile operators must modify or replace their existing, voice-centric billing infrastructure with new systems that can price data and content events as well as voice calls. These billing systems will need to be highly flexible, event-based and truly convergent.