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6th February 2003

For years, DoCoMo's wireless web service, i-mode, has been the envy of telecom operators around the globe. With 33 million subscribers and a gazillion teenagers trading animated emails on their handsets, i-mode is an unqualified commercial success.
So why haven't telecoms in the U.S. and Europe been able to duplicate the DoCoMo hit?

There are business, demographic, and geographic differences that partly answer this question. But U.S. and European telecoms have also been hamstrung by a key, but under-appreciated technical obstacle -- billing mediation.

Mediation is basically the part of a telecom billing system that keeps track of usage. If you're making a long distance voice call, for example, the mediation system's job is to collect "minutes of use" and pass that data along to the next step where the invoice is calculated and printed.

But in next generation or 3G wireless networks, mediation becomes much more complex because you've added a data component to the mix. With i-mode, for instance, DoCoMo bills -- not for the minutes of use -- but for IP content, the type or volume of information sent to the phone user.

And that IP content is supplied by a complex ecosystem of 900 partners within the i-mode private network. So even if it's a simple IP service such as downloading up-to-the-minute sports scores to the handset -- DoCoMo needs to keep tabs on the contributions of multiple partners in the transaction: an event sponsor, a sports score collection company, and perhaps even a content clearinghouse.

The only way DoCoMo could manage this backend complexity was to build a new and very sophisticated type of mediation system - one that could monitor carrier-to-partner content usage and billing settlements.

DoCoMo's mediation system, which it built in-house, is worth every yen invested in it: the system not only enabled DoCoMo's wireless web ecosystem, it gave the company a tremendous competitive edge.

But now, according to a new research report by Technology Research Institute (TRI), the vendor marketplace is finally catching up to DoCoMo. Startup wireless web and 3G operators are now buying advanced mediation solutions on the open market. And this factor is helping next gen wireless operators get up to speed.

For instance, DoCoMo's fast-growing competitor in Japan is KDDI, a telco which landed over 3 million subscribers on its wireless web network in its first seven months of operation.

Behind the scenes at KDDI is mediation vendor Narus, who mediates and analyzes all of KDDI's content-based billing - and it's recently been benchmarked at 10 billion records per day.

Both new and established players like Openet, XACCT, HP, Comptel, Telesciences, and Ericsson are jockeying for market share as they serve this growing market.
In addition to their high performance, the latest mediation solutions are more easily configured. They allow operators to define catalogs of new IP services in a matter of weeks. XACCT's mediation solution, for example, includes graphical building block features that allow carriers to define new services without writing new code.
Other new features emerging include workflow, real-time authentication, SS7 dataanalysis, very high reliability, and revenue assurance auditing.

These and other mediation market trends are analyzed in TRI's new 555-page report entitled, "Revenue Assurance, Mediation and Cost Management Solutions in Telecommunications".