When pondering the exciting possibilities of 5G, you may not want to think about charging systems. But you should: you can’t have one without the other. Ari Banerjee, SVP Strategy, Netcracker Technology, makes the case for next-gen 5G-ready charging platforms.
Few topics generate as much lively speculation as 5G. What level of innovation is possible when there is low latency always-on connectivity and it’s available to virtually everyone? Well, according to Verizon at least, the answer is nothing less than a Fourth Industrial Revolution.
It’s for this reason that communication service providers (CSPs) like Verizon are prepared to spend big to deliver this transformation. According to GSMA the world’s telcos will assign $1.1 trillion to CAPEX in the years to 2025. And more than three quarters of the spend will be 5G-related.
Clearly, CSPs are investing in the confident belief they will get their money back many times over. They know that 5G can make them central players in some of the biggest growth markets of the 21st century: drones, remote healthcare, smart cities, autonomous vehicles and more.
CSPs need a new charging mindset
This is a fabulous opportunity. But it comes with a serious challenge. For the last 40 years CSPs have been mostly monetising connectivity. In the 5G era, they must find ways to monetise quality of service and experiences.
In order to grasp this 5G economy opportunity, CSPs need a new mindset. Business as usual will not suffice. Instead, they need to think differently about the markets they enter and the remuneration models they devise. They can’t merely repeat the ‘flat rate subscriptions’ model that characterised the 3G/4G era. They need new charging engines.
The rewards are certainly there for CSPs that rise to the challenge.. McKinsey projects that QoS-based charging can deliver short term ARPU increases of up to 20%.
Unlocking the much greater long-term value of 5G will start when networks switch over to a 5G standalone core (5G SA). With 5G SA in place, CSPs can begin to offer network slices and edge services that will power new transformational industries.
How is this migration to non-standalone progressing so far? According to the Global Suppliers Association 20 operators in 16 countries had launched 5G SA networks at the start of 2022. It says 99 operators in 50 countries are currently engaged in trials and deployments.
With full 5G networks going live all over the world, CSPs now need 5G convergent charging solutions (CCSs) that can handle the emergent new use cases. To deliver on their promise these solutions must be able to:
- Monetise anything and everything
CCSs must be able to charge for all the new attributes made possible by 5G. For example, they should have the flexibility to apply slice-specific charging by device type or by session quality (based on QoS information or service level agreement). CSPs should be able to set 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.
- Extend to any service
As we’ve discussed, 5G SA paves the way for CSPs to participate in exciting new markets – from home security, telehealth and connected industry to autonomous transport, smart cities and more. To grasp these opportunities, CSPs must look beyond the dedicated development and heavy customisations of traditional online charging systems. Instead, they should build CCSs that support new services with intuitive GUI-based no-code configuration.
- Explore different metrics of value than just data
Charging by data might have worked in the 3G and 4G eras. Not so in the 5G future. Consider the example of online gaming. Instead of charging a user by the megabyte, operators should be able to charge by the game or by the length of session. They should extend this billing to partners such as cloud gaming companies. As telcos embrace B2B2X models, these partner ecosystems will become increasingly important.
- Charge for processing at the edge
Many of the most disruptive new technological markets demand extremely low latency. Autonomous motoring is one obvious example. To support these use cases, the telco industry developed the Ultra-Reliable Low Latency Communications (URLLC) standard. CSPs must distribute their URLLC charging capabilities to the edge to ensure they can identify discrepancies and take action to meet guaranteed service levels.
- Offer charging-as-a-service
In a 5G world, CSPs will not always own the customer. In many cases competitors will become telcos’ partners. This is an opportunity to turn charging itself into a profit centre. By developing charging-as-a-service, CSPs can generate new revenue from previously adversarial relationships.
- Ability to support dynamic pricing scenarios
Cloud-native online charging, enhanced with embedded analytical capabilities, gives the service provider the ability to monitor and measure supply and demand, anticipate changes in customer behavior and price dynamically based on different parameters and inputs. Though a legacy OCS might provide some smart capabilities, analytical intelligence is unlikely to be native to the system. Plus, the legacy OCS won’t dynamically scale across geographies to provide distributed functionality at scale wherever it is needed while optimizing available hardware resources. Thus, next-generation cloud-native online charging becomes a transformational catalyst across a wide area, bringing digital-age pricing and demand modeling capabilities where and when business requires.
With the above conditions in place, CSPs will be free to explore the most appropriate charging models for new and emerging use cases. Many of these use cases will include multiple partners with new B2B2X charging models for specific verticals. In a connected hospital scenario, for example, the CSP could enable online patient monitoring, smart infrastructure monitoring (tracking the temperature, humidity and quality of air in hospital rooms), AR-based remote consultation, and AI-enhanced queue and waiting time predictions. The CSP could even create flexible bundles in partnership with hospitals, medical device manufacturers and insurance companies to deliver consistent experiences to patients.
There’s no doubt that 5G will make CSPs important stakeholders in next-generation industries. Simply put, there will be no smart agriculture or drone delivery or self-driving freight trucks without cellular connectivity.
And yet the vast promise of 5G will mean nothing to CSPs without the ability to charge for new use cases. The good news is that industry research suggests the message is getting through. Omdia’s 2021 ICT Enterprise Insights survey found that 47% of CSPs are planning to increase their spend on converged charging systems.
The days of static charging for telecom services appear to be nearing an end. In their place will be new systems that can incorporate all of the variables from next-generation services while maintaining transparency, precision and simplicity.
The author is Ari Banerjee, SVP Strategy, Netcracker Technology.
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