3G HOME ssAdvertising and Sponsorship ssFREE Daily 3G Newsletter

Every businesses main concern is financial performance and customer retention. However, in the wireless communications market, there has never been a time when this has been more critical, due to the development and availability of 3G technologies. With UK wireless network operators having invested over £22.5bn for their 3G licences, let alone the cost for their network infrastructure, they are under immense pressure to find ways to recoup their investment. In order to achieve this, wireless operators need to cut operating expenses, plug revenue leaks, decrease loss to fraud, extend the life of their legacy network infrastructure, identify under-performing assets, increase the speed with which new services can be deployed, and make those services more valuable to the customer. These are huge challenges for the operators, for if they don't implement adequate, future-proof solutions, they are destined to fail.

Deregulation and globalisation of the telecommunications market over recent years has accelerated the adoption of new technologies, resulting in increasingly complex and diverse services being supplied by multi-protocol driven wireless operators. Understandably this has resulted in intense competition throughout the industry, forcing companies to differentiate themselves through the availability of new services and new ways of charging for these services that move away from traditional pricing policies.

Quite simply, 3G enables an environment where there is potential to recoup the investment by providing value-added services to subscribers using a usage-based charging model. But without a network independent, rules-based mediation platform wireless operators will not be able to deploy these innovative and flexible services as they will not be able to collect the data that allows them to be billed on a usage basis.

With the advent of IP services and 3G wireless networks, the right mediation platform is essential not only because it enables real-time billing by providing the data, but also because it achieves competitive advantage in the development and implementation of these new services.

3G Is On The Horizon
3G services and the wireless Internet are seen as a market opportunity of similar proportions to the Internet itself. This is basically because mobile phones and PDAs, unlike PCs, are easy to use and portable and are now becoming part of our every day lives. According to several leading analysts, wireless Internet users are predicted to out-number those of the wired Internet, and in three years two-thirds of all Internet access will be wireless.

But 3G access will not only be by a standard mobile phone. PDAs, like the Palm Pilot and Compaq's IPAQ will have 3G cards available that make them wireless devices and laptops will have 3G PCMCIA cards to make them truly mobile. In essence, 3G will turn these devices into a 2Mbps broadband, permanently connected wireless terminal, and servicing these new classes of device is what generates the huge costs for the mobile providers. But at the same time, 3G generates a plethora of additional 'non-telecoms' related value-added services such as payment of bills, video games, downloadable video, and M-commerce that subscribers will be willing to pay for on a usage basis.

Wireless operators need to find a way to channel the additional operating costs they incur through to the consumer, and its not just high on-line bandwidth. From the available data on the network and an understanding of what their customers will use and pay for, they need to factor in content acquisition, new product developments, customer acquisition, terminal subsidies, and marketing operations to name a few. It's a great revenue opportunity, but to generate these new revenues they need flexible access to the network data so that it can be used as the foundation to feed to the operational, business and decision support systems. The mediation platform is simply the enabler, but one that should protect the wireless operators investment in new packet-based network infrastructures.

If wireless operators are to survive through profitability, whilst stabilising customer retention, there is no doubt that they need to radically change the way they bill for their services. Traditionally, wireless operators have provided the service subscribers use - the voice call. Now with 2.5 and 3G, the additional new services subscribers may want to use are not owned by the wireless operator. So, in addition to providing voice calls, they also need to provide an 'always on' connection to the Internet, allowing the subscriber to do -anything they want. The difficulty is working out how to charge for this facility, as every subscriber will use it differently.

Even if they try to sell their bandwidth for as high a price as the consumer will bear, they will never recoup investments made in the 3G licences and new network infrastructures. The flat rate billing model adopted by ISPs will be a thing of the past, as services will need to be billed on a quality, volume and value added basis. Wireless operators will not survive as the 'bit pipes' and transport of information - they need to add value and services to the data that they can then accurately bill.

The challenge for the mobile operator is sourcing the data needed for accurate billing, assessing the cost of collecting this data, and evaluating if the cost of the data collection is greater than the revenue stream it generates. This is precisely where a scaleable mediation platform provides an immediate return on investment.

Traditional Billing Methodologies
In the past, wireless operators have relied on the Call Detail Record (CDR) for billing information, but the CDR no longer exists in 2.5 and 3G networks. Also, the traditional time and distance bases of the CDR are no longer adequate to formulate customer billing for those who will be using advanced 3G services. In order to be profitable, wireless operators must be able to cost-effectively calculate and charge for the value of the content, the quantity and quality of the data being moved. The issue of charging by volume (amount of MB downloaded), value (MP3 file worth €3.99) and quality (high for video, low for email) must be taken into account.

Through the emergence of IP, GSM (2G), GPRS (2.5G) and UMTS (3G), billing systems now have to cope with substantially greater amounts of data from increasingly diverse networks, which are not based on time or distance alone. Wireless operators are finding that the billing and mediation solutions that worked so well for their circuit switched services, are now completely inadequate for their wireless-IP based services. Due to the fundamental difference to the underlying network (packet rather than circuit), getting the usage data is critical and wireless operators need to understand that billing is no longer the issue - mediation is!

Now that network switches alone cannot access all the complex data from the network, traditional billing systems become useless unless they have a powerful mediation system capable of feeding them the data they require for usage-based rating and billing. This accounts for the reason that ISPs have failed to secure the level of profitability originally anticipated, and why so many have gone out of business. Their billing systems could only cope with a flat fee or 'all you can eat' billing model, without the ability to bill by event, per use, value or bandwidth. Although the billing systems may have been able to accommodate this, the majority of ISPs failed to implement mediation that provided the billing system with the correct and required data.

Although, over the past few years ISPs have invested heavily in billing systems that promised to deliver the ability to bill customers by these metrics, due to the rapid rate at which data and voice communication technology is advancing, ISPs are now finding that billing systems alone do not provide the solution. If wireless operators are to generate additional revenue streams, and succeed where many ISPs have failed, they must adopt the volume, value, quantity and quality usage-based charging model and deploy mediation as the foundation for that.

Today, bandwidth has become a big commodity and content billing is a pre-requisite for the wireless operator. For example, how many downloads were made during one connection, how many different networks or sources were accessed, or how many emails were sent. If wireless operators do not have a mediation platform, they are not going to be able to collect this data from the various networks, and are therefore will not in a position to bill accurately or more importantly, profitably for these services.

Increased Volume of Data
GPRS, the current standard in wireless data technology, is making Internet services available 'on-line' anytime. Although GPRS hardware is implemented as an enhancement to existing GSM network technologies, as with all new IP-based services, there are greater complexities in the creation of usage data for billing purposes than in previous standards.

For wireless operator moving to 2.5 and 3G, creating the equivalent of the CDR is like completing a jigsaw puzzle. Data in different formats, amounts, and from different sources needs to be aggregated and correlated to make up an event that holds the information required by the operational, business and decision support systems.

GPRS networks also have more data flowing around them, as much as 30 to 40 times the amount in traditional GSM. GPRS was designed for short bursts of traffic like email and SMS but isn't able to cope with high-bandwidth services like video and streaming. In a GPRS network the mediation platform has to perform a more complex role than the previous 2G or GSM wireless technology. The information required for billing purposes becomes even more difficult to collect, mainly due to -the complexity of the network and the many data collection points that need to be serviced.

Today, although 2.5G networks are aimed primarily at business users, due to the fact that the technology would be perceived as prohibitively expensive for the home consumer, there is a massive non-business consumer market to be tapped. For 3G to become a cost effective and attractive proposition to the average household consumer, services will need to be pervasive as well as of interest and value for the consumers.

So what is Mediation?
For a start, it's not just for billing anymore! A mediation solution provides the ability and efficiency to aggregate all usage information that is of value, from any point in any network, into a powerful real-time knowledge-base that empowers wireless operators to deploy new applications and services such as: real-time customer billing, Pre-paid, churn management, CRM and fraud management.

Mediation is the process of collecting raw usage data from a wireless network, transforming it into useful information that describe a transaction, and delivering that information to operational, business and decision support systems.

Mediation represents the foundation for the wireless operators future. By incorporating a mediation platform, wireless operators will be able to minimise revenue leakage and deliver better and more tailored services, accelerating the realisation of revenue from these new services. Ultimately this will lead to reduced cost bases, enhanced profitability and improved customer satisfaction.

Mediation harnesses networks to applications. The rich usage data that it adapts and routes can be used in a host of ways that were inconceivable just a few years ago. Mediation no longer involves simply reading Call Detail Records (CDRs) describing each call directly from the switch. Today, mediation systems must also track real-time information from the hundreds maybe thousands of packets and myriad of servers making up an IP transaction, creating the equivalent of the CDR.

Click Here For Full Details On Line

In a fiercely competitive market where wireless operators are continually looking for ways to gain significant advantage due to continual price erosion and increased customer turnover, they are now realising that the latest mediation systems have the ability to seamlessly offer this competitive advantage. By integrating a mediation solution, wireless operators can interoperate with other providers, thereby increasing customer satisfaction and extending their service offerings at competitive prices.

Why Mediation is Essential for Wireless Operators
With the trend towards consolidation in telecommunications, many operators are finding themselves saddled with multiple, network-specific mediation systems that were deployed to support only one type of network application. The desire of customers for bundled services, plus the need for operational efficiencies, has led to the development of mediation solutions that are designed to extract data from any type of network element, and converge the information into useful data for billing and other back-office applications.

This is why mediation has become absolutely essential for wireless operators. Not only can it cope with the increasing volumes of data and disparate elements of IP-based service in order to correlate for accurate billing purposes, but the data can also be hived off to a data warehouse for mining and development, allowing operators to quickly and easily conduct research into packages and services that will be most desirable for consumers.

Revenue leakage alone may drain as much as 2% to 5% of total revenues, and with many wireless operators struggling to achieve 15% profitability, this lost revenue is substantial. The root cause simply stems from errors transferring data from the network to the billing system.

Today, mediation is a key consideration for augmentation with billing systems as new technologies are consolidating disparate networks to provide a single solution. For example, although GPRS is a wireless technology, it is also packet-based, so it requires the use of cellular, switching and packet-based network elements. Without mediation, wireless operators offering such services will simply not be able to collect the information they require for efficient billing purposes.

Conclusion
As new technologies are introduced, it is difficult to predict what the networks of the future will look like, or what new services operators will offer. Mediation will provide the wireless operators with the flexibility to expand their systems in the future, regardless of emerging new technologies, with the confidence that support systems remain effective. The ideal mediation solution will be flexible enough to expand beyond the network as we know it today, and be able to be dynamically configured to understand new elements as they are introduced.

Although initially mediation was viewed as performing a relatively simple procedure, in that it collects and translates data, wireless operators are starting to recognise the value of the information that is available to them. They are now beginning to recognise that they must use every piece of available information in order to reduce operating costs and increase revenues from their network and services.

But a word of warning - not all mediation systems are up to the challenge. If wireless operators do not install a flexible, rules-based mediation platform, they will not be able to bill accurately, they will lose customers and finally be crippled by 3G instead of reaping the benefits that its breadth of service offers.

None of us have a crystal ball. 3G and its predecessors were once seen simply as a faster way to access services that exist today, such as WAP. But once 3G technology is in place, new ways of using it and increased profitability opportunities from it will quickly become apparent. It's really no different than how the Internet has made possible completely new kinds of services such as on-line auctions and B2B exchanges.

This article was written by Andrew Court, Marketing Director EMEA, Openet Telecom.