Jun 092010
 

Prepaid Billing systems, (which can also be called charging systems in day-to-day talks), run the billing process for the prepaid customer accounts.

They heavily use the online charging mechanism rather than offline charging that we typically see in the postpaid billing systems. Online charging systems rate the usage on-the-fly and charge the user account immediately.

Prepaid billing environment is composed of several different systems. And the most important one is the charging system. Prepaid Charging systems are integrated with the switches (MSC, PSTN), SMSC, MMSC, GGSN, Interconnect and other VAS applications. Those service infrastructure equipments are configured to ask an authorization from the charging manager before proceeding to give a service.

Charging systems communicate with (or employs) several other systems to charge the customer usage. One of them is the rating system which calculates the cost of the usage. Rating systems maintain the tariffs, discounts and campaign related information.

Charging systems ask rating systems the cost (in terms of dollars, credits etc) of the usage (volume, time or event based) and then try to apply it to the customer account balance. They do this by communicating with a balance manager. Balance manager systems manage the customer account balance.

There are 2 mechanisms that charging managers use in order to debit from the account balance:

First mechanism is the “direct debit” mechanism. In this approach, balance manager directly debits a pre-defined amount. For example, a debit is applied each 30 seconds (For those 30 seconds.) If you terminate the session at 25th second, the remaining 5 seconds are rated and refunded back to the account.

The second mechanism is the “unit reservation” mechanism. Here, rather directly debiting from the account, you reserve some of the balance. When the call is complete (or SMS, MMS has reached it destination) the reserved amount is committed.

Voucher management is also an important function that needs to be mentioned about. Voucher managers manage the lifecycle of the voucher that are used to credit the customer account balances. Therefore, voucher managers have a direct interface with the balance managers. (and possibly with other systems such as CRM, Fraud managers etc.)

Charging platforms also employ IVR functionalities. These are usefull to inform the user about the current balance, crediting the balance and notifying the user before any call drop due to insufficient balance.

(If the charging system cannot do the charging, due to some reasons, it outputs a CDR file including the session details. This CDR is post processed and applied to the account balance.)

Charging manager, balance manager, rating manager, voucher management and IVR can be sold separately or combined in a single “prepaid billing” platform.

Operators around the world started consolidating their prepaid and postpaid billing platforms. This is called convergent billing. This approach reduces the complexities, license/hardware costs and operational expenses. I’ll try to comment on convergent billing in another post.

May 162010
 

Billing systems collect usage records from devices and generate bills per customer based on predefined rules.

Different systems in a service provider’s infrastructure produce logs about the usage. We call them usage data records or UDRs. If the usage is for voice calls, we call them CDRs, if the usage is about bandwidth; we call it IPDR or UDR. These logs are collected, aggregated, validated and converted to a common format that is understood by the billing system. These collection related tasks belong to Mediation systems. (You may want to read about my previous post about Mediation from here). The Mediation system passes usage records to the billing system over a predefined protocol (ftp, sftp, propriety etc).

The first task of the billing system is to rate the usage data. This is done by the rating engine module. The Rating Engine looks for the specified fields in the usage data records which identify the subscriber account. (Guiding) For voice, this could be the originating number field. (MSISDN and/or IMSI in mobile communications). For data/content, again it could be MSISDN, IMSI, username or a device specific field.

After the rating engine identifies the customer account, it tries to find a price plan (rate plan) for that specific subscriber. Rate plans are the plans that are negotiated at the order capturing phase. Rate plans say for example “between 9 PM and 7 am the calls are for free, other times x cents per minute and international calls are y cents per minute. 100 local minutes are free with a minimum monthly cost of z dollars”.

After the rate plan is identified, usage records can be charged using the other fields of the record. These could be call type, terminating number, session start time, session end time, location (cell id) etc.

A CDR file does generally include usage records from many customer accounts. So, the rating engine processes the usage records line by line add the corresponding dollar-amount information to the record. (In some scenarios, event based taxation is also applied. This is also done by the rating engine). Rounding is also applied at this stage. Rated records are stored on a separate table on the billing system which is also called the billing pool.

The next step is billing/invoicing which is handled by the billing engine. The billing engine takes the rated CDRs from the billing pool and aggregates the usage. The volume discounts, free minutes (allowances), cross-product discounts are applied at this point. Other charge types such as recurring charges; one time charges (such as installation or activation) and taxes based on the taxation rules (based on customer, service or location) are also added to the bill.

A note about the free minutes: Free minutes can be applied to the bill in two ways. In the first approach, the rating engine also accumulates the total usage per customer and rates the usage records accordingly. That is to say, if I have 60 free minutes and my last 5 minutes of usage bring my on-going monthly usage to 40 minutes, the rating engine rates this last call as zero dollars. In the second approach, the rating engine does not care about the accumulated usage information. Rather, it charges the usage records one-by-one based on the price plan. When the billing time comes, the free minutes are deducted from the overall usage.

The invoicing engine takes the bills and formats the invoices. It includes account information, due dates and some marketing messages and finally sends the invoice to the printing house to be delivered to the customers. (Or if electronic delivery is set, it is emailed.)

Billing/Invoicing is a time and CPU intensive process so the billing cycle concept was introduced. Billing cycles are the instruments that allow the operator to distribute the batch processing load of the rated records. Instead of invoicing all the customers on the last day of the month, customers to be invoices are spread over different days of the month. Billing cycles could also be used to manage the cash flow of the operator.

I need to add some information about the charging. Charging is “assigning a value to a service usage or product”. Charging should be considered as the same as rating. According to TMForum, Charging is the combination of rating and rate level discounts. We do not have a “Billing” process in the eTOM hierarchy. However, we have charging, bill inquiry handling, bill payments management and other billing related processes. So, we should consider “Billing” as a practice rather than a process.

Up to now, I talked about the offline charging. We charged the usage records in offline. In telecommunications systems this generally refers to the postpaid services where you charge the service after the usage. The online charging, on the other hand, is the instrument used; to be able to provide pre-paid services. I will detail prepaid billing in another post. It is enough to mention that the rating function is done on-the-fly in those online systems. In our everyday talks, we sometimes use the term charging for online charging/prepaid billing, and billing for offline charging/postpaid billing. It is ok as long as it does not lead to any confusion. We just need to remember that the charging is a sub function of billing practice (prepaid or postpaid billing)

After the bill is delivered to the customer, it is stored in the billing system’s archives. The bill record would be useful in other processes such as inquiries, audits, revenue assurance etc.