Editorial : Why Is 3G OSS So Challenging?

Finally 3G wireless technology has arrived in North America, but where’s the needed 3G billing and OSS?

AT&T Wireless, Cingular, Verizon, VoiceStream and soon Sprint PCS are rolling out packet wireless data services of modest speed (10 to 40 Kbps and higher). But where are the promised revolutionary services? The general press won’t have much to write about regarding 3G wireless unless they go to trade shows—the only place you can see terminals and gee-whiz applications. So what’s stopping 3G service from hitting the streets or the local newspaper’s style and business sections? It’s the lack of 3G billing and OSSs, of course.

Here are 10 specific reasons why 3G billing and OSS is so difficult.

1. New Technology: 3G Is IP

All the new promised wireless services have to be supported by packet technologies like routers, Frame Relay transport, IP applications and more. Wireless carrier staff from engineers to customer service representatives have never had to deal with this IP stuff.

2. Complex Services

Wireless voice is a simple service. If the RF carrier (c) power to background noise (n) ratio, or c/n, is greater than a certain threshold c/n, the call is left in progress. If c/n drops below a certain threshold, the call is either handed off to another cell or dropped. In the IP packet world, meanwhile, the packet carrying the information can be stored or retransmitted, the transfer rate can be increased or decreased, and more. There are a dozen and one quality of service (QoS) parameters beyond c/n with wireless IP data.

3. Usage Collection

Usage collection for voice services is simple. Minutes of usage are collected at one point (the mobile switching office), rated, and then sent off to a billing system. In the IP world, carriers must differentiate the applications (content, free Web access, email, e-commerce), and must associate them with individual QoS requirements (bandwidth, error rate, c/n threshold) as well as associate the assigned temporary IP address used at that time by the customer. This IP event data cannot be collected at one place or at one time.

4. Service Provisioning

Provisioning in the voice services space is simple. The wireless carrier has either an unoccupied frequency pair available in AMPS coverage, a free TDMA time slot pair available or a CDMA background noise level that can accommodate another CDMA spreading code, and that’s it. A voice service request is acknowledged and the connection remains static until disconnected or handed off to a new cell. In the IP space the usage information transmitted constantly changes within a cell as well as in adjacent cells. This creates dynamic RF changes. In short, the 3G service provisioning system has to know the QoS requirement of each user in a cell dynamically over time, as well as what’s going on in adjacent cells, before a “go” or “no go” is given for a new service request.

5. Service Delivery Validation

For a voice call that’s dropped, most wireless users just redial and continue the conversation. Some wireless customers will complain to CSRs, who will almost always issue a credit. An image, video clip or large email attachment can’t be delivered in pieces, and therefore users will most likely ask for credits for partial or unsuccessful delivery. Service validation delivery for a 20-cent phone call is one thing, but validating whether a 5 MB file was delivered at a cost of $5 per megabyte is another—particularly if you are delivering for a third-party content provider who wants its revenue cut regardless of the customer’s refund needs.

6. Intercarrier Settlements

When the wireless voice industry got up and running in the mid-1980s there were many different license holders in two groups: the wireline or RBOCs, and independents like McCaw Cellular in the non-wireline group. The non-wireline group did not want to be clobbered in the marketplace by an RBOC who could boast multistate coverage. So along with pushing for intercarrier roaming and financial settlement, they also rallied around one brand name (Cellular One) to stand up to the RBOCs.

Of course the seven RBOCs didn’t want to be left behind, so they joined forces to create their own roaming and settlement structure. Today the six dominant national wireless carriers have a “walled garden” mentality. Sign up with us and we will provide national 3G service. AT&T Wireless and Cingular do, however, provide GPRS roaming, but it won’t last without a major overhaul because it’s “bill and keep.” When a GPRS AT&T Wireless customer goes into Cingular territory, Cingular provides the service, sends a call detail record to AT&T Wireless, AT&T “bills” its customers and “keeps” the money. Reciprocation occurs when a Cingular GPRS customer roams into AT&T Wireless territory.

Bill-and-keep is not a long-term solution, because one wireless service provider would just create a pricing package that encourages usage when roaming and discourages usage (high prices) at home. Even if carriers solve the financial settlement issues and replace bill-and-keep with actual usage records for reimbursement, IP billing and settlement standards remain a problem. Carriers have to modify billing records (TDMA/CDMA’s CIBER and GSM’s TAP), go with CTIA’s Cibernet MxP proposal, adopt the IP community’s IPDR or just use a proprietary standard. Finally, in a 3G IP world, service packages will be created to gain a competitive advantage. A roaming service package specifying average bit rate, maximum burst rate, latency delay metrics, free Web and non-free Web access and so on will make service portability a monumental 3G OSS undertaking.

7. Pricing Model Trial and Error

Wireless marketing executives as a group are the first to admit that they have no idea what pricing model will work in North America. Do you price by the byte, packet, screen, bits stored, connection, minute, etc., and how do you present this on a customer’s bill? There will be lots of trial and error before a stable billing requirement will be seen for 3G service.

8. Rating

In the wireless voice world, rating a call is as straightforward as billing (see item 3). With 3G IP it’s a different rating ballgame, particularly when it comes to content. Cost is easy to predict with voice. The user has a good idea of what a call is going to cost before it’s made. With content the wireless carrier can’t predict cost and, from the user’s perspective, the price. Once the wireless service provider gets beyond offering low-cost personal text-type content (stock quotes, joke of the day, horoscopes, and the like) and moves into offering real-time online games, music and images, the price of content delivery becomes complex.

Consider the following basic wireless content price equation:

Price=Wireless Resources Used+Cost of Content+Profit. Moreover, as content services become value-based, customers may very well want to know what this content will cost before purchasing. When was the last time you went clothes shopping, spotted an item and handed it over to a sales clerk along with a credit card without looking at the price? Real-time rating will be mandatory in the 3G IP era, and preorder rating will be even more of a challenge.

9. Third-Party Compensation and Mobility

Other than roaming and resale there is no third-party compensation for wireless voice. 3G IP presents another new challenge, because it is clear that third-party content or application service providers will want compensation. But there is also a new OSS wrinkle: The content providers will want to know if their content was delivered in a satisfactory manner—delivery validation—as well as who was the wireless carrier delivering the content. Note: it’s unlikely a wireless carrier is going to get an exclusive with a hot content provider. Also, part of the IETF mobile IP initiative is establishing how to move between types of networks (3G wireless, DSL, cable and corporate LANs) with the same IP identification. This will become a reality in the new Bluetooth and Wi-Fi (802.11b) era. Finally, there is little in the way of standards or industry-wide business rules between carriers and content providers to date. Wireless content settlements will be a challenge for years to come.

10. Legacy OSSs

All wireless service providers are telling the investment community that 3G IP revenues will soon overtake those from voice services. The reality is that today data represents only a small percentage of total revenue. Given the current investment climate for telecom service providers, carriers will have to make do with legacy OSSs until data revenues increase. Just as overlaying 3G RF and IP technology over 2G infrastructure is not ideal, the same can be said for overlaying 3G IP OSSs requirements on legacy 2G OSSs.

Those are my top 10 reasons why 3G billing and OSS is so challenging. If you need a better understanding of 3G, IP and OSS, consider attending the Understanding 3G Wireless Technology and Opportunity seminar. More information can be found at www.telestrategies.com or by calling 703.734.7050.