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RESEARCHINSIGHTS

Real-time charging accelerates multi-partner services

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Report prepared for Nikos Tsantanis of Intracom Telecom. No unauthorised sharing.

42 www.tmforum.orgINSIGHTS RESEARCH

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Monetizing CSP Digital AssetsLeverage Charging to enable innovative & profitable business models

The challenge is well-documented and widely-manifested among Communication Service Providers (CSPs) worldwide: revenues from traditional voice and messaging-related core activities are constantly diminishing in favor of a diverse and ever-growing population of third party application providers, service suppliers, and the likes. These so-called Over-the-Top (OTT) players establish themselves in the digital arena ‘eating the lunch’ of CSPs. Nevertheless, the shift of revenue from CSPs to OTTs is just one manifestation of the structural changes currently taking place in the industry.

Looking under the hood, it is more and more acknowledged that this shift is accelerated by the decline of B2B or B2C as paradigms of choice. These long-established business models are gradually complemented by complex and demanding B2B2X, multi-entity, many-to-many value delivery ecosystems.

This strategic evolution has led many operators to embrace newly-thought business models and value propositions, powered by their core assets – data and capabilities – toward repositioning themselves from CSPs to DSPs (Digital Service Providers).

Although CSPs do realize that new revenue streams could be generated through core asset monetization, many such efforts fail due to shortcomings imposed by the currently employed charging approaches. Key questions to be answered range from selecting the core assets that can be monetized, to addressing the challenges that arise in the process, up to finally sharing the revenue among involved entities in a fair and efficient manner.

Selecting Assets to MonetizeEach CSP possesses a wealth of digital

Nikos Tsantanis, Senior Product Marketing Manager, Big Data Analytics, Intracom TelecomIraklis Pilatos, Product Manager, Revenue Mgt. Solutions, Intracom Telecom

assets that have unique characteristics:

n Are ‘owned’ and/or controlled, sometimes exclusively, by the CSP.

n Have an intrinsic value particularly pertinent to third-parties, like OTTs.

n Are hard, or impossible, to find elsewhere, outside the CSP, and are thus non-imitable.

The combination of these three characteristics accentuates the strategic positioning of the CSP in the value-creation ecosystem and inspires innovative ways to uncover new sources of competitive edge and revenue.

A tentative list of assets may include, among others, customer profile (identification details, subscription information, communication preferences, credibility & loyalty), location and presence, type of devices, payment method (pre/post-paid), performance requirements (e.g. QoS/QoE), etc. Such assets are already exposed today to collaborating third-parties, mainly via Application Programming Interfaces (APIs).

Addressing Monetization Challenges Possession and exposure of assets alone, is necessary but not sufficient for realizing value. Equally important is the ability to place a ‘price tag’ on each asset that is exposed. Yet, due to the diversity of the assets and the plethora of partners, there is no ‘one size fits all’ monetization approach. The challenge here is to adopt the method that best fits the chosen business model.

The CSP should be empowered to flexibly – even on demand – enable commonly-utilized charging methods (e.g. flat rate, volume-based, transaction-based, value-based, discretionary, etc.) depending on the business model needs.

Although the above charging methods

are both powerful and tested, CSPs are often challenged by additional functionalities that extend well beyond those typically available today within CSPs:

n Assets need to be exposed either individually or bundled together to serve the diverse needs of a broad OTT audience.

n The complexity of meshed B2B2X value ecosystems often demands a multitude of highly sophisticated charging capabilities that can only be met by flexibly ‘mixing and matching’ common charging methods.

n The boom of IoT, cloud and M2M introduce new business models and expose CSPs to specific demands of vertical markets outside their core domain.

Sharing Revenues Fairly & EfficientlyIn a typical scenario, an OTT player leverages exposed assets, adds value via proprietary means and creates a new service offering toward other third-parties or the end-user.

However, the many-to-many relationship between assets and OTTs gives rise into, practically countless, alternative value-flow and revenue-sharing scenarios. This enormous number of possibilities, compounded with the fast and voluminous propagation of value and revenue, uncovers another considerable challenge for the CSP: how to reward each entity according to their respective contribution in value creation.

A comprehensive partner management mechanism is needed to maintain revenue-sharing agreements among all stakeholders (CSPs, OTTs, third-party service providers and internal or external app developers) and monitor the necessary SLAs end-to-end.

Report prepared for Nikos Tsantanis of Intracom Telecom. No unauthorised sharing.

43www.tmforum.org INSIGHTS RESEARCH

Use Case: Smart Parking AppLet us illustrate how a CSP can leverage its advanced charging capabilities while monetizing assets in the following real-life B2B2X business scenario.

While approaching by car to a client’s premise, Alice consults a parking app on her smart phone. The app first determines the exact vehicle location, guided by the CSP’s network. It then displays on the map all nearby parking stations with vacant parking slots as well as pricing information for each of them. Alice chooses her preferred station and gets driving directions.

Upon arrival, she is granted access to the parking station by pointing her mobile handset to the NFC device at the parking gate and ‘delegates’ payment to her CSP: if she is prepaid subscriber, the charge is deducted from her mobile phone balance; if postpaid, the charge appears at her next bill.

Three business entities interact syn-ergistically to serve the subscriber, as follows.

n CSP, which exposes core assets (user’s location, subscription type and capability for in-app payment, etc.) to the OTT and orchestrates a complex business partnership by distributing the revenue during the settlement process.

n OTT, the app developer/owner, which acts as a value creation layer by bridging drivers’ demand for parking slots with parking operators’ supply.

n Parking Operators, which benefit by virtualizing their Demand Generation process through paid promotion on the app and by extending their accepted payment methods.

The above business interactions involve multiple complex charging relationships, in which the CSP is always in the middle:n CSP collects payment from the

subscriber and acts as clearance center determining what revenue portion each party deserves. CSP also charges OTT for the assets used and both OTT and Parking Operator for the brokerage/

clearance service offered.n OTT receives a percentage of the

amount of money paid by app users for parking services, net of the charges for accessing CSP’s assets.

n Parking Operator receives from the CSP a share of the revenue generated by parking services, net of the charges for promotion made possible by the app (e.g.: pay per appearance). The mobile subscriber receives a

hassle-free, seamless parking experience, while remaining loyal to the CSP.

NGINius-Charging™ is a comprehensive next-generation charging solution from Intracom Telecom enabling CSPs to realize innovative and profitable business models and monetize assets exposed to third-party OTTs end-to-end. The solution incorporates a scalable module providing efficient revenue sharing and partner management functionality across complex B2B2X settings.

Contact us: charging@intracom-telecom.com

Report prepared for Nikos Tsantanis of Intracom Telecom. No unauthorised sharing.