Billing Mediation Breaks Out of its Circuit-Based Shell

Billing Mediation Breaks Out of its Circuit-Based Shell: Vendors Hatch New Convergent, Real-Time & Value-Based Billing Features

Bethesda, MD, December 7, 2004 – In the circuit-based world, mediation’s role was limited to the mundane job of feeding relatively simple Call Detail Records (CDRs) to the upstream billing process. But as advanced services like VoIP and 3G emerge, mediation has leaped to the forefront of billing innovation — correlating IP events, acting as the service control supervisor in 3G, and optimizing traffic routes and network utilization.

This forms the analysis of Dittberner Associates, Inc. that recently completed a survey of telecom billing mediation trends entitled: Telecom Mediation: The Market for Real-Time, Convergent, and Value-Based Mediation for 3G, VoIP, and Advanced IP Services.

Dittberner says the trend towards more sophisticated mediation will drive a modest uptick in the mediation software and services market. However Dittberner predicts certain sectors will experience rapid growth. For instance, Dittberner forecasts the wireless 2.5G and 3G sectors will grow from only $60 million in 2004 to $329 million in 2009.

Once the telecom industry begins migrating to ubiquitous networks and the IP Multimedia Subsystem (IMS), Dittberner believes mediation will play an even more central role in managing multiple access to multiple services. Whether it’s a 3G, Wi-Fi, WiMAX, or a DSL connection, it will be mediation’s job to manage a host of connectivity concerns such as network availability, bandwidth, subscriber authorizations, credit limits, and group lists.

Future trends aside, the Dittberner report points to plenty of mediation innovations that carriers are capitalizing on today:

AT&T Wireless, for instance, was frustrated by the high total cost of ownership of its legacy mediation system. When changes were needed, it had to go back to its mediation vendor to get expensive and time-consuming upgrades. The solution was to buy a “convergent mediation” system from Openet Telecom that cut across its circuit- and IP-based networks, lowering maintenance costs and providing greater flexibility.

Real-time video delivery is a much sought-after technique in 3G networks. Hutchison H3G Italia, for instance, was able to leverage a Mind CTI mediation system to deliver video replays of Italian league goal scores within ten seconds of the score. The service is proving to be a big differentiator, enough to justify H3G’s plastering billboards all over Italy advertising its real-time goal-replay capability.

Value-based billing is charging the subscriber what he’s willing to pay. To cite a well-known example, the airline industry uses differentiated rates to maximize the average revenue yield for seats in their airplanes. Now, nTels is delivering value-based billing to the largest 3G operator in the world, SK Telecom. To minimize pricing disputes, SKT produces a hot bill within 5 minutes joining voice call, content, and packet service charges in a single usage record. The hot bill makes pricing completely transparent to the subscriber.

Telecom traffic routing has become extremely complex for wholesale carriers who buy, sell, and manage traffic. Large operators, who have hundreds of interconnect partners, sometimes need to modify their routing 400 times a day or more. Now mediation vendors, such as EDB Telesciences are introducing usage analytic tools that enable carriers to implement best-margin routing.

When a major South America incumbent LEC experienced a sudden 10% decline in its international voice minutes of use, it needed to quickly find the root cause. After Agilent Technologies was hired to perform mediate usage across the SS7 network, the leakage was traced to fraudsters sneaking VoIP calls over PBXs and dumping the traffic onto the incumbent’s local exchange tariff-free.

The mediation analysis report is the latest addition to Dittberner’s OSS/BSS KnowledgeBaseTM. An executive summary and table of contents for the mediation research is posted at www.technology-research.com/med.htm

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