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Tag Archives: Partner Settlement

How Industry Trends are Impacting Telecom Partnerships

Trends that are creating a shift

With democratizing access to technology, more and more people are embracing it and telecom is one of the industries which is most affected by this shift. More and more people will have mobile by 2020 and the amazing thing is the revenue of this user acquisition will be driven by data consumption as compared to voice/SMS or other traditional services which were the base of telecom offering till recent time.

Operators are sensing the shift happening in the user choices and trying to figure out ways to stay in the competition. Mobile broadband connection to increase from 55% of the total in 2016 to 73% by 2020. The number of smartphone users will reach 5.7 billion by 2020 which means more and more people will be using data as a telco service and be a part of the digital ecosystem. Mobile data is expected to grow at a CAGR of 47% till 2020.

If we see the driving factors behind this shift, OTT, content and other digital service providers have played a major role. See the below graph on how the composition of services has changed over time.

It’s not only the addition of new partners to the digital ecosystem, but the traditional wholesale is also evolving. Here are the new trends which we can see happening in wholesale.

Implications on Telcos due to digitalization

Telcos no more work in silos as they are disrupted by the new age service providers hence looking for new partners to offer competitive and exciting services to its consumers. The below chart shows the changes happening in the telecom industry. This is forcing telcos to search for innovative and unique economic models.

 

New Possibilities for Telcos

These trends have opened a lot of possibilities to explore additional business avenues and try new economic models. The telco revenue mix is also changing with the partner mix as we can see in the graph and it is impacting the way telcos operate and manage partnerships in a traditional format. Hence the partner lifecycle management is also becoming imperative for telcos to embrace the digital revolution. For example, there will be 25 billion connected things by 2025 with enterprise verticals as the main drivers. Blockchain in telco has so far been limited to roaming but experimentation could take this further, especially if eSIM came to smartphones.

Smartphone connection will increase to 79% of the total mobile connection bringing in new customers. Over a fifth of the world’s markets will have launched 5G by 2020, spending a combined $244 billion on networks in the process which will bring new capabilities for telcos.

How Telcos can Embrace Digitalization Successfully

The need of the hour is a unified solution which can cater to all the requirement of the ecosystem. The system should be able to provide visibility for everyone in the ecosystem to establish trust among the partners. Right from efficiently managing the partner onboarding, to partner settlements and dispute management, the system should be able to make the whole journey seamless for both traditional and digital service partners. The below image shows some of the capabilities of the system.

This unified solution will allow telcos to transition through the changing paradigm and add agility and scalability to the business to embrace any new technology and consumer behavioral shift.

To learn how telcos can leverage partnerships to gain competitive advantage

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Choosing the Right Converged Partner Management Solution

What is a Converged Partner Management Solution?

Converged partner management is a unified solution which caters to the entire gamut of partner needs of a telecom operator. The platform addresses the needs of both traditional and digital partners by spreading across different domains and helps to handle the complex relationships between the suppliers and vendors of the telecom operator.

Why you need a Converged Partner Management Solution

Over the last decade, digitalization has transformed the communication service provider (CSP) landscape. It has created a need to achieve market differentiation in response to the evolving customer profiles and prevail over emerging challenges from disruptive services. Telco revenues from legacy voice and SMS are on the decline and there is high CAPEX associated with network innovation. Telcos can turn this around by evolving as Digital Service Providers (DSPs). But the biggest challenge in this transformation is to bring both traditional and new digital partners together to create an integrated industry specific solution. But the success rate of these partnerships and integrations is very low as it comes with multiple challenges. Inefficient partner onboarding process, tariff management for multiple plans, billing and invoice reconciliation while taking OPEX into consideration. Based on a research 70% of partnerships fail due to trust and clarity of business relationships. There is a need of sustainable partnerships which can create value for everyone in the ecosystem.

In this scenario, a converged partner management approach proves beneficial from both business and service perspectives. From the business perspective, a converged platform will help to visualize the partners’ business. It will consolidate partners into a single contractual binding and bundle the offerings, settlements, and payments across the entire domains. A converged partner management solution packs features that give CSPs freedom to experiment with NGN service offerings such as content management without having to worry about the scalability of its billing function. The solution enables telecom operators to have all their business partnerships in one single place and makes it easier to access information and make efficient business decisions. This is especially important as different partners insist different models in measuring the business impact and ROI.

How to Choose the Right Converged Partner Management Solution

Selecting a partner management solution to manage your partnerships efficiently is not an easy decision. The solution should complement the operations of the service provider and offers features and functionalities that remove operational errors and smoothen the partner management process.

Below are the key features you should look for in a Converged Partner Management Solution

Partner Self Onboarding: The partner onboarding platform can support self-boarding, manual onboarding and in some cases, a mix of both. The self-boarding platform will play a significant role in the digital era, giving the DSP the ability to perform most of the onboarding activities by automating the process like partner scoring on configurable KPIs and other partner details.

Partner Scoring- Pre-Onboarding & Post Onboarding: Partner scoring can assist an operator to take pre and post onboarding decisions based on business KPIs, and this can be combined with standard agreed contracts to make the complete process automated.

Defining the Partner Business: Defining the businesses of both traditional and digital partners is a complex process especially in the context of service offerings, revenue sharing and service agility. The business for traditional partners such as interconnect revolved around exchange of voice, SMS and usage of other services so the contract includes bilateral deals for settling the traffic and event rates. On the other hand, contract with digital partners like OTT players, content providers, VAS companies, MSOs, integrators, app developers, IoT and M2M service providers involves complex revenue sharing model as the settlement may be based on usage of resources, impressions/ clicks on the website, readings from metered equipment, among others. A converged partner management solution will help telcos to implement revenue sharing models that can be fixed, shared or a hybrid depending on the nature of the partner business.

End-to-End Billing and Settlement: Helps the business to define rules and apply them to the events acquired to generate the final revenue figure to both the DSP and the partner. The system achieves this through accurate rating and charging, real-time updates, and on-time bill and statement generation.

ETL (extract, transform, load) to Track and Process Events: The ETL tool is required to process different types of events from various sources and transform them to respective entities by extracting the relevant information. Considering the dynamic and open nature of the DSP ecosystem, the ETL tool should be flexible enough to handle the frequent onboarding of new partners and build mediation capability supporting ingestion and normalization of data from multiple partners in different formats.

Partner Communication and Self-Care: A converged platform should enable a consolidated communication portal to manage all the operational aspects of the business including contractual updates, bills, settlements, credit debit notes, trouble ticketing, and dispute management. The portal should also be integrated to the backend systems to orchestrate each operational aspect towards the respective system for action and resolution. Finally, it should feature open APIs that enable quick integration with third-party systems.

Visibility of Partner Business: Real-time visibility ensures transparency across the businesses. Through real-time analytics of reports, alerts and notifications, the converged platform can enhance the visibility and reporting across different channels.

all-in-one-PS

Are You Ready?

New age partnerships require transparency and trust between the partners to create a robust ecosystem. A Converged Telecom Partner Management solution will help telcos to manage these new age partnerships efficiently and enable them to drive new business models. This will also reduce the time to market for new offers and packages and allow telcos and partners to acquire new customers and add new revenue streams.

Are you ready for a converged partner management solution to succeed in the new age digital ecosystem?

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Managing Complex Partner Agreements in the Digital Era

Digitalization has opened a plethora of opportunities for Communication Service Providers (CSP) across the globe to transform their traditional service offerings, moving from telephony into content-driven businesses and reaching the status of Digital Service Providers (DSP). There is a paradigm shift in the telecommunications ecosystem with the entry of technological disruptors (like OTT players) resulting in a portfolio of services with competitive pricing models. The depletion of voice revenues and the rise of data services has changed the dynamics of business partnerships.

The traditional telecom service provider is no longer isolated in the market and has multiple collaborations for audio, video, content, analytics, cloud, etc. Furthermore, due to shrinking margins, operators are looking forward to having contracts/agreements with their vendors and partners, which will create a win-win situation for the parties involved. According to a recent survey by TM Forum, DSPs have a revenue opportunity of around $142 billion from digital services. Whether it is AT&T acquiring Time Warner for $85.4 billion or Reliance Jio integrating with Saavn to create JioSaavn app, telcos are looking to roll out exclusive content to their end customers. Considering that there is much to gain, a DSP without a strong content offering in today’s scenario is almost unimaginable.

A DSP often has hundreds of content provider contracts (mostly with aggregators) to manage, and there is a huge diversity of partners ranging from a garage developer to the likes of Google.

Building success factors:

The phenomenal surge in data consumption by subscribers and free content is driving the majority of telcos’ core businesses today. In addition to this, few telcos are partnering with OTT players to provide exclusive content and niche services in the form of premium bundles. Operator-led OTT subscriptions have become the new business model driving revenues and customer segments.
Building Success Factors
Source: IHS Markit

Driving new business models – The increasing level of complexity

Initially, rate cards were exchanged between partners for billing the usage of services. Later they entered into bilateral agreements to settle the revenues between them. Now, telcos are moving to digital contracts by partnering with content providers and other OTT players. These digital contracts involve tier/slab ratings, along with exclusions/discounts. Commitments and rating based on specific parameters have increased the level of complexity with respect to rating and charging their partners.

Let us go through 3 types of agreements that are executed between partners these days:

There are several agreement scenarios (deals) between the operator and content partner based on different business models. Furthermore, revenue sharing models have been evolving from fixed % based to a tier/slab-based approach across product scenarios.

1. An agreement based on new subscriptions

No of New Subscriptions    Revenue Share

0 – 500                                           P %

501 – 2000                                     Q %

2001 and above                              Q % and additional T % for no of subs >2000

As per the partner agreement, if new subscriptions are negative for a particular month, no pay-out will be made to the partner for that month.

2. An agreement based on promotions

Revenue sharing between the parties will be on a monthly basis. The promotion period can be for a few months or it can be ongoing. If the user subscribes to the content for

Months                  Revenue Share

1 month                         P %

2 months                       Q %

3 months and above      R %

3. An agreement based on market penetration

In this scenario, the operator is liable to share the revenue based on the penetration of subscribers in an area. The complexity involved here is that the penetration level of each market is different from the other. In addition to this, there are certain areas where the radius is defined with respect to a landmark. Subscribers within the radius will be charged a premium and accordingly the revenue share.

In today’s competitive market scenario, partnerships have become the need of the hour for telecom operators and they are moving ahead by signing innovative and complex contracts. The above mentioned examples of digital contracts/agreements are a few models that we have recently dealt with. In the future, we will see many such models with increased complexity and innovative digital contract definitions.

If you are interested in knowing more about managing complex wholesale contracts

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Have you negotiated or signed any complex contract recently? Let us know in the comments section below. Looking for partner who can help you handle complex contact? Talk to us.

Are You Ready to Unravel the Digital Billing Maze?

Ever guessed who will be your next partner in wholesale, digital or OTT? Seeing the pace at which partnerships are burgeoning across the length and breadth of the industry, it seems you won’t get an easy answer to this question. In this rat race, growing partners is the need of the hour, and that too across categories of entertainment, security, gaming and more; there won’t be much time to analyze the partner’s background or work on the business logic. But you are confident that your digital journey is on track, with newer business and revenue opportunities.… Hurray!

Now, things turn upside down when you realize after a few days that there’s a difficulty with managing the partner account, faulty content delivered to subscribers, disputes arising from agreements, or you find out that there’s a serious problem in the way business terms are being executed. Why do these happen?

Well, the issue could be arising from a lack of preparation and foresight; no one is to be blamed either, the rapidly evolving business landscape throws a curve ball. With several thousands of digital companies forming a complex maze of partnerships, challenges are certain. These challenges could arise from all quarters, not from your partners alone, but your customers or external sources as well.

Let’s look at some of the typical challenges you may confront in your engagements with new types of partners:

  • There is a content provider and a partner who deals with a variety of content types including OTT video and mobile apps, but you find it difficult to integrate all types of services on one platform.
  • The content offered by your partner is incomplete or corrupt, and the charges need to be reversed to a customer. How will you settle the deal in this context?
  • A customer engages in fraudulent activities; for example, after downloading the content, he/she defaults the payment arguing that the content is of poor quality.
  • Partner settlement becomes difficult as your partner engages in unethical practices like using a fraudulent platform for tracking the number of downloads or the impressions.
  • A phishing fraud affects your customers, forcing you to compensate massively.
  • An inadvertent regulatory violation from your end leads to a serious legal complications, leading to financial loss and damage to reputation.

And the list goes on…

Where does the problem lie? Who is to be held responsible? How to overcome these challenges?

The underlying problem with most Telcos pursuing digital opportunities is sometimes the lack of preparation both in terms of technology, infrastructure and awareness. With constant changes to the digital landscape, regulatory pressure and escalating CAPEX, anticipating everything that could go wrong is a downward spiral. An upgrade to your Business and Operations Support System (BSS/OSS) could be a solution, but how far and to what extent the upgrade should go? Most Telcos have already initiated the BSS/OSS transformation, but has not yet achieved the level of digital maturity which they are supposed to. Why so?

Well, the scenarios discussed above indicate that the technology infrastructure you are building to protect your digital business should be capable of addressing not only the current challenges but also the future events that are likely arise. In other words, it should be capable of predicting the future scenarios to an extent and address the problematic ones before they impact the system. And be future compatible so that it can adapt quickly.

Broadly speaking, an encompassing OSS/BSS strategy that addresses different aspects like revenue management, billing & partner management and customer experience in a proactive manner is the need of the hour.

Stay tuned to understand how Subex can help you build a digital billing strategy that helps you rise to the status of a successful Level 4 digital service provider (DSP).  If you want to know how Subex’s solutions can help you build a digital ecosystem that boosts your revenue streams and enhances customer value, contact us.

Converged Partner Management: Will It Address Telco’s Concerns?

Over the past decade, we have seen how the growth of IP-enabled networks has impacted Telco’s business models. The competition from Over-the-Top (OTT) players brought drastic decline in their traditional voice and message revenues. The discussions on improving Average Revenue per User (ARPU) for Telcos thus chiefly revolved around enabling new service models around Digital, but without compromising the overall budget. The transition of Telcos from traditional Communications Service Providers (CSPs) to Digital Service Providers (DSPs) thus became indispensable but at the same time challenging. One of the top challenges faced by DSPs during this transformation is to manage the diverse ecosystem of partners linked to their business.

Why Converged Partner Management is Important?

Considering the complex business environment a DSP operates in, partner management becomes crucial not only to simplify operations but also to optimize revenue streams. Legacy partner management systems have limitations especially due to their lack of flexibility and automation capabilities. By implementing a converged partner management strategy, Telcos can maximize profitability and minimize partner disputes. By integrating the service with ERP and other connected processes, they can also reduce the operational costs considerably.

Before going deep into the converged partner management solution, let’s explore the scenario in a DSP partner management landscape. The complexity in partner management starts right from “defining the partner business.” Here we have the traditional partners like wholesale and roaming providers whose contracts may revolve around setting bilateral deals for defining traffic and event details for voice, data, and SMS services. On the other hand, there are digital partners like OTT players, VAS/content providers, and IoT players whose contracts may revolve around other metrics such as clicks/impressions, downloads, meter readings, etc.

The wide variety in partner businesses also brings associated challenges in partner settlement, another major worry for DSPs. Each business entity requires different sets of rules, which need to be applied to the events to generate the final revenue reports. This is not easy considering the exhaustive DSP ecosystem comprising the traditional  interconnect, wholesale, and roaming providers  as well as the new digital partners for services like OTT, content, VAS, IoT, and M2M. Then, there is another set of entities like MSOs, integrators, dealers and resellers who require different types of contracts and settlement rules.

The dynamic and evolving DSP ecosystem also makes partner onboarding a tricky affair. There needs to be a system that can track frequent partners and in multiple formats, and build mediation capability across them in a seamless manner. Attaining real-time visibility across each platform is important for accurate rating and charging, without which the DSP ecosystem will not work smoothly.

The concerns over partner management prompted us to think about a converged partner management solution that could deliver an all-in-one package for DSPs. The innovation aimed at delivering real-time visibility into DSP’s end-to-end wholesale business and revenue sources. Our interaction with stakeholders in the telecom landscape helped us sort out the pain points quickly. With the insights gained from the industry, we have now come up with a new ROC Partner Management solution that addresses all aspects of partner management including partner onboarding, partner self-care, end-to-end revenue visibility, and communication under one umbrella.

As mentioned in the beginning, converged partner management strategy helps Telcos gain end-to-end visibility and drive cost optimization across its service channels. The scalable partner management architecture makes partner onboarding hassle-free. It also enhances the DSP’s service capabilities as it allows them to identify, test, and analyze different contracts before they are implemented.

To understand more about Subex ROC Partner Management offering, please download the whitepaper.

Telecom World Asia 2018: Here we come!

Digitalisation. This is the wave which has hit everyone across geographies and in our quest to help the telecom world embracing it and making it real, we are reaching the ‘Land of smiles’- Thailand.  The 2018 edition of Telecom World Asia is taking place in Bangkok on the 19th and 20th of March and I am excited to be a part of Subex delegation. This year, the conference is revolving around four key themes of digitalisation- wholesale, networks, the digital customer, and Telco 4.0. Let me tell you how and why these themes are close to our heart.

Our product ROC Partner Management is a unified platform which caters to the entire gamut of partner needs of a telecom operator for providing both traditional and digital services and it aligns with the first theme of the conference- “wholesale”. We have two products under the ‘Network’ theme- ROC Network Asset Management and ROC Capacity Management. ROC Network Asset Management is an Asset Lifecycle Management solution which provides standardized processes for managing and optimizing network assets. ROC Capacity Management solution help CSPs to strategize and plan their network expansion & capacity augment investments to improve Customer Experience, increase RoI, optimize Capex, reduce Churn and increase Net Promoter Scores. Hence both these products are aimed at providing capex optimization and customer experience. Our advanced analytics solution ROC insights provide actionable insights about products, risk, revenue and customers and hence aligns well with the themes of digital customer and Telco 4.0.

The conference is going to cover interesting strategic topics such as the future of wholesale operators, the road to 5G, SDN/NFV etc. which are the favorite coffee table discussions at Subex. Overall, Telecom World Asia 2018 looks a very good opportunity for us to share knowledge, network with industry peers and learn how Telco are addressing the digital transformation. Don’t forget to visit us at booth #20 at the conference. Wai Bangkok!

Does a Digital Lifestyle offer Operators opportunities, or is the path more ominous?

It stands to reason that the Digital lifestyle of consumers will dramatically impact how operators generate revenues over the next 10-15 years. Transformations are taking place that will move activities, entertainment, commerce, healthcare, transportation, and most other aspects of our lives into Digital modalities. This has invited thousands of micro-providers of applications and networks into the mix, quickly marginalizing the value of the operator to merely an “enabling pipe.” This puts the operator into a competitive situation, ultimately impacting margins. But that’s only on the revenue side of the equation… the story could become far more complex.

For an operator, the days of 25%-40% EBIDTA are waning, if not almost gone (in many regions). Pressures on pricing remain downward, with new product offers being the primary method to sustain acceptable revenues and margins. This has opened the door for some impressive creativity by many operators, especially in developing markets. In many cases no market appears off limits, as seen by the offerings by progressive organizations like MTN in Africa: Who would have anticipated an operator would offer personal transportation services rivaling Uber?

These seemingly odd moves are, in fact, brilliant moves by operators to seek new sources of revenues as their businesses are being redefined by the digital services we are quickly becoming reliant on. The impacts on revenue models due to this change in the business are stunning: Traditional billed services like voice, and even data, are fading in importance. Revenue models are instead focusing more on casual services, pay-per-use services, marketplace services, etc. Put more simply, the “pipe” is no longer where the earning potential lies for the operator.

So now a previously non-agile, large operator business is finding itself competing with, and in many cases partnering with, literally thousands of aggressive, hungry micro-entities that provide products and services accessed by the networks. There is less reliance on monthly guaranteed revenue; the battle for revenue very often resides in millions of micro-transactions.

All of the discussion cannot focus entirely on revenues, however. Margins are also sustained by costs. Agility, therefore, must exist on the cost side of the operator business. In the old world of monthly recurring and predictable revenues, costs could be managed and allocated more confidently. Opex and Capex planning and forecasting practices were based on budgeting with a high degree of certainty. But as revenues models are changing, so must cost models. Where possible, operators will need to employ similar creativity to curbing costs, as they are with earning revenues.

How can operators, therefore, modify cost models in the business to be as aggressive and variable as the revenue models they rely upon? This is where the opportunities for SDN/NFV networks can shave significant costs, while changing operator cost models in ways that were not previously achievable.

Software-Defined Networks (SDN) and Network Function Virtualization (NFV) will allow operators to provide Network-on-Demand and Service-on-Demand models to consumers, while effectively minimizing, if not eliminating the need for human intervention. The costs associated with truck rolls, call centers, and expensive specialized network equipment will be dramatically reduced, resulting in decreased Opex and Capex burdens on the business. The savings need to expand further, however.

In current cost models, operators must deploy and maintain network services around the clock, which consumes significant and ongoing expenses. However, if a network is based on SDN/NFV architectures, the deployed services are no longer in a fixed position in the network, simply because they are now software-defined and/or virtualized. This means an intelligent network can move assets where needed, and when needed. These assets are capitalized as licensed instances; so now an operator can have a pool of 1,000 licenses for a virtual service, and deploy them only as necessary.

This type of dynamic deployment model should allow operators to negotiate dynamic cost models as well; imagine only paying for a license when you have it deployed (and it is generating revenue). While this idea may seem far-fetched, consider that now the network functions we are discussing are no longer controlled by a few network equipment and function providers; micro-entities (application developers) can now produce those functions, often at far less expensive price points.

The business transformations taking place in operators globally are forcing entirely new ways of addressing margin pressures, as the revenue and cost variables operators have historically used are no longer the same. Looking beyond margins in consumer-facing products and services, new network cost models must be explored, especially since those models were based on what is now an outdated means to earn revenues.

IoT Settlements – Leverage the world of opportunity

The Scenario

Of late IoT has gained a lot of attention and every operator is at least thinking of leveraging this latest platform to offer innovative products, but the big question is how?

Many operators are relying on their vendors to come up with IoT use cases, the challenge here is that even the Vendors are still in process of deep diving as IoT is still a niche market.

One of the major factor that makes IoT an unknown area is the lack of visible use cases to be seen in our day to day life, though the developed counties have made significant progress, developing world is yet to embrace the “Smart” systems. With lot of emphasis on Smart cities, IoT business is here to stay.

When it comes to IoT Settlements, both Telcos and Vendors should start thinking out of the traditional wholesale approach. Telcos are looking for vendors who can support them with their traditional as well as new business areas with the centralized solution.

The Concept

Understanding “Internet of Things” concept is very simple, it is a network of “Things”. Things are physical objects that can be added to a network, have sensors and can be controlled using software. These things can be as common as day to day devices like a Fridge, a Car, a thermostat and so on. The purpose of connecting ‘things’ is to have a centralized access to their features and to control enormous data they are capable of producing.

One very obvious fact that can be identified from IoT is to have a medium for keeping things connected. This creates an immense opportunity for telecom operators to provide medium for supporting the connected items. According to Gartner by 2020, the Internet of Things will grow to 26 billion units installed which excludes connected PCs and smartphones. This will add $1.9 trillion to the global economy. Intel estimates 31 billion devices to be connected by 2020. According to Cisco by 2020, 50 billion devices will be connected, whereas Morgan Stanley feels that the number is much higher and it can go up to 75 billion.  The good news is, there is a substantial growth opportunity for everyone, right from smart device manufacturers to the smart service providers everyone can get their share of business from IoT.

The Process

Let us consider an example of a smart home. There are multiple interconnected devices which are installed for security, entertainment, utility etc. These are all connected to a centralized hub, which in turn is connected to the IoT platform. IoT platform consumes the data generated by these smart devices for insights and to make sense of this huge data.

To establish this network of devices connected to hub and IoT Platform, internet is needed. This gap is filled by the Telcos. So bringing in smartness requires lot of partners to work together. Let us enrich above example to get more clear understanding of the multi partner involvement.

A  leading furniture retailer has introduced a new Smart Home Solution, where consumer can install smart devices such as TV, Fridge, Air conditioner, Washing Machine, Radio, lighting solution, thermostat and security solution. Finally these devices are connected to hub to have a centralized control of the devices.

A smart Hub ensures all smart devices speak the same language, this enables user to remotely control the devices even if the user is far away from the home. To bring in more intelligence the data gets transmitted from smart devices to the IoT Platform. The IoT platform analyzes the data, apply rules and makes devices more smart based on the usage patterns.

Finally the most important piece of this setup is facilitated by a Telecom operator to ensure internet connectivity for all the devices to communicate. Telecom operators can also bundle voice and SMS services along with data to take actions based on the defined rules. E.g. in case there is a security breach, device can initiate a call & SMS to the owner and insurance company to inform this breach.

So in this particular eco system, we have seen multiple partners working together to establish a Smart Home solution.  Similarly there are multi partner IoT use cases for Smart Car Fleet, Smart Healthcare, Smart Grids, etc. In all the IoT use cases irrespective of the catered domain, Telecom Operators and IoT platform vendors will always play a significant role, directly or indirectly they will contribute to billions of dollars in the IoT economy.

For a Telco, providing backbone is not the only important thing in IoT space. With the complex partnership models, Partner Management, Billing and Settlements are other crucial activities that will result in the Cost and Revenue identification.

The Solution – Partner Management, Billing & Settlement

With the cut throat competition and reducing margins in the traditional Wholesale business, operators are adding new dimensions to their business with immense revenue generation capabilities of Internet of Things.

A new age partner Settlement solution cannot limit its functionalities to just traditional business models. There is a requirement for settlement solutions to be more agile in accepting and delivering new business requirements with short time to market. If we talk about IoT for a Telco, now partners are not limited to Voice or Content providers, rather the list is getting much diversified with partners coming in from various domains like health care, agriculture, utility, etc.

For a smart home solution, a telecom operator can provide IoT backbone to a furniture retailer , where the Telco will ensure internet connectivity and will enable IoT platform in collaboration with a cloud computing platform. Here the furniture retailer becomes the Telecom operator’s customer and the cloud platform provider is Telco’s vendor.

Partner Management & Settlement solution deployed at Telco should take care of partner (Customer & Vendor) lifecycle management, easy on-boarding, business transparency along with IoT billing & settlements. Partner Settlement solution should also be capable of managing plethora of Meta data that will be provided by the IoT Platform for billing and Partner analysis. The volume of IoT data can be much more compared to traditional usage data.

The system should also be capable of providing innovative products and should do billing accordingly. Key point here is to have personalized plans created based on the business need. Some of the products that can be offered as a part of IoT platform are:

  1. Flat Rating – Flat rates for data, call and SMS for each units.
  2. Fixed Charges – Fixed product price for unlimited data, voice & SMS
  3. One time & Recurring Charges – Product to support one time and recurring charge capabilities
  4. Device Based – Charge based on number of devices connected
  5. Slab & Tired based – Data, Voice and SMS to be defined, rates varies based on the slabs & Tiers
  6. Pay-as-you-go – Charge only based on the usage, deduction from Prepaid Balance
  7. Cross Domain Products – IoT clubbed with content or other interactive services

IoT billing & settlement is not just limited to the Telco and their direct partners, it has to be extended to the associated MVNOs in from of Billing as a service. There can be a multi-level partner involvement as well, say based on the movie genre analysis information available in meta data generated by a Smart TV, a latest movie can be suggested for subscription through an entertainment company , and hence the entertainment company can become 2nd level Advert/Content partner.

IoT is still evolving, there can be many aspect that are yet to be explored. This is the right time for Telcos, platform and equipment vendors to start investing in IoT to stay ahead of the competition.

Infographic :

partner-settlement-solution

The Evolution of Internet Protocol

In traditional interconnect, every telecom operator has domestic and international partners to terminate traffic, or use hub operators to route the traffic to specific destinations using Time-division multiplexing (TDM) circuits. But with full service IP networks coming into the arena, telecommunication operators can provide video, data and voice using the same backbone network structure. Over the next few years the traditional TDM/PSTN and IP would probably continue to coexist. Interconnection in effect also undergoes a transformation here. Interconnection creates end to end service connectivity and interoperability across providers.

As the industry is transiting into a hybrid model where IP coexists with TDM, the physical infrastructure for call transfer and exchange is undergoing a technological transformation. All new networks are using the IP backbone and this has lesser points of interconnection as compared with the TDM/PSTN network. The need for more bandwidth and to keep up with network trends now, focusing on accurately transport newer types of data, IP is definitely the most cost effective and sustainable solution.

The current subscriber needs and demands are seamless, ubiquitous connectivity of mobile services everywhere, giving them access to information and social data. And while today the focus is on voice and video, voice is rapidly becoming a part of other bundled packages and offerings.

The focus of past bilateral agreements between telecom providers were typically based on commercials and volumes with penalty, shortfall or send/pay clauses associated. Settlements happened at a defined frequency where invoices are exchanged, compared and reconciled in cases of disputes. Quality metrics in the traditional interconnect model were parameters like ASR, NER, etc., which sampled/monitored data to derive the call quality and checked periodically for SLA violations and route failures. At this stage, the IP layer was merely handling transport, while the actual services (be it voice, content, OTT, or web based) would be delivered in any combination. With IP related services becoming a predominant offering, it means the understanding of quality, routing and agreements would change dynamically over the next few years and lead to the need of a ‘new’ interconnection model that would be able to handle these level of agreements, charging and settlement. Quality of service for IP now needs to prioritize data security, encryption and protection of information.

The target being constant connectivity, another challenge in terms of both technology and business is roaming agreements. Initially GPRS roaming required complex agreements between every individual operators and each operator had to maintain dedicated links. GSMA had launched GRX (GPRS Roaming eXchange) technology a few years ago to handle mobile packet delivery and exchange. This started off supporting 2.5G technology and eventually 3G as well. The idea behind this was to ease roaming agreements between GPRS vendors. GRX is typically based on a public IP backbone and used GTP (GPRS Tunneling Protocol) and enabled the GRX operator to act as a hub for the interconnect partners without having direct or dedicated links between them. GRX is making way for IPX (Internet Protocol eXchange) which addresses some of the drawbacks of GRX. Primarily MNOs could leverage the benefits of GRX and this was a model based on best effort, hence QoS, security, acknowledgement were not guaranteed in this method.

IPX on the other hand, has clear quality parameters like Service Availability, Jitter, Packet Loss and Delay. It also has defined traffic classes: Conversational, Streaming, Interactive and Background Class, so any kind of application has to be clearly mapped to a potential QoS class name, for example: Instant Messaging is Interactive, Video is Streaming while File Transfer is Background. Telecommunication operators with backbone network would look at offering an IPX solution to mobile operators, content providers and aggregators by supporting multiple data, video and voice services. Mobile operators earlier had to rely on multiple platforms for voice and data and can now look at a unified synergy. The target market would look at not only MNOs (Mobile Network Operators), but also MVNOs (Mobile Virtual Network Operators), Content Providers, App Providers, Fixed Line Providers.

With IPX built on a secure IPVPN network, a lot of the parameters around security and protection would be eliminated, while all kinds of data can traverse through a standard backbone network. Operators need to focus on sustainable revenue models. A strong settlement and assurance system would be critical in this play to understand the packetized data structure and price based on the CoS (Class of Service).

GSC Conference - Meeting Leading International Wholesale Players in Historic Windsor

I’m sitting in the Spring sunshine (it’s the UK so it’s cold) preparing my talk for the GSC conference in Windsor which starts tomorrow. This is a great venue as it gets representation from major carriers globally mostly concerned  with Trading international traffic and the subsequent business processes that support that seemingly simple activity. Few thoughts are paramount, one of them is that I’m presenting on Thursday so there will be a lot of information sharing by then so I hope I would manage to glue the audience to their seats.

The theme of my presentation is Evolution of Partner Settlement.   I think that the apparatus, systems, structures and know how which allows carriers to trade voice minutes will soon be in demand to negotiate, set prices and monitor a whole range of services and not just voice.

One particular area I’m interested in is content settlement. How does the carrier (or a cable company) set a fair price with a content creator?  How does the content owner verify the final payment?   If it’s all about supply and demand, how do providers gauge demand and look at product performance? Who could have predicted that a Danish sub-titled crime thriller, The Killer series, would take the world by storm? ( I guess the writer!)

What strikes me is that what Telcos sell changes, but not how successful business runs.  I once worked in a toy shop in a particularly posh part of London. Our buyer made the company a fortune from buying Japanese pencils ( a bit like Hello Kitty) – everyone thought she was nuts. She also ceremoniously dumped the then unfashionable Kermit the frog.  This released floor space, which she crammed with pencils  and she watched point of sales like a hawk. Nowadays we have sophisticated systems such as  ours to do this. But the core things that buyer spoke about, attractive stock, great presentation, customer experience are all key elements of product management and content distribution.  Managing the content catalogue and getting value for the content creative and the CSP are critical.

So I’m hoping to have a great discussion about Partner Settlement with people this week about all the hot topics  IPX, Content, M2M, Mobile Money – don’t ever let anyone tell you billing is boring.

Blog more later. Have a good week.

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