Multi-gadgeted users are complex users

Welcome to this Autumn 2009 edition of Evolve. It's an easy prediction to make: policy management is going to become much more important in the mobile world. Back in the old days it was very different. You took a mobile phone, sold it to an individual and there was your user.

These days users are more likely to have multiple SIMs and even multiple devices. That's because they increasingly have multiple mobile needs and in the future they'll all have multiple devices to tackle them: everything from smartphones to video-enabled tablets.

The point is that multi-gadgeted users are complicated users and they will have to be supported by devilishly complex policies on usage.

As we point out in our main feature on Policy Management, the huge growth in data services and the rise of app stores means that mobile operators have to start getting usage policies formulated and implemented on their networks, if they're to avoid being overwhelmed by data demand.

And we don't mean just rolling out brutal "cap and throttle" schemes either. Policy management has to be tackled as an integral part of service delivery. We explain why.

The really big news though, is that Cerillion is now 10 years old. In October 1999 the company emerged following a buyout from Logica, and in this issue Louis Hall, Cerillion's CEO, talks about the company’s achievements and the changing billing scene.

From the early days of 3G, to the 4G opportunity we’re promised is just round the corner, Louis gives his view of the key market developments and looks forward to a bright future for Cerillion.

Also in this issue, we remind you that Cerillion will be exhibiting at AfricaCom 2009, taking place from 11th-12th November at the CTICC in Cape Town, South Africa. This is now in its 12th year and is the largest annual Pan-African telecoms event. Cerillion will be there to promote its bundled component suite. If you're planning to be there too, then we would love to see you at our stand (C10).

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It's all a matter of Policy

Not so long ago, if you started chatting to someone about 'policy' you would be committing the cardinal sin of talking politics. Not a great way to make friends and influence people. But these days it seems that policy chat is de rigueur in telecoms circles. Or more precisely, policy management.

Policy Management is definitely the phrase on everyone's lips at the moment and quite rightly so. The exponential growth in data services and the rise of the app stores means that telecoms operators need to implement policies on their network to stop high bandwidth users compromising the quality of service experienced by the rest. Think peer-to-peer file-sharing or applications such as the BBC iPlayer.

But Policy Management is more than just applying fair usage policies or throttling, it is now being recognised as a much more powerful tool which can be used as an integral part of service delivery for a wide range of products and promotions.

3GPP Standards

In the old days, we used to talk about business rules. These were the use cases that said: if this happens, do that. And so on. But Policy Management seems to have grabbed everyone's attention much more so than plain old business rules. Almost overnight, Policy Management has become the marketing 'phrase that pays' and now it's one of the hottest topics around.

It's not often that something driven by industry standards captures the imagination of the industry as much as Policy Management. However, when the 3rd Generation Partnership Project (3GPP) defined the Policy and Charging Rules Function (PCRF) and Policy and Charging Enforcement Function (PCEF) as part of the IMS framework, little did they know that they were creating a whole new niche in the industry.

As a core part of the 3GPP specifications, policies can be defined directly in the PCRF or can be updated from a centralised product catalogue. The PCEF and PCRF then interact with the Online Charging Function (OCF) to determine when rules should be applied and then control the subscriber sessions accordingly. Critically, this is a real-time activity as part of service delivery, managing the Quality of Service (QOS) and directly affecting the subscriber experience.

Proprietary Systems

It's not that Policy Management in this form is completely new; you only have to look at the prepaid world where systems have been applying policies, to prevent service use when the customer has run out of credit, for years. However in this environment, the policy management was an embedded part of the prepaid platform, often based on proprietary technology, which made it very difficult to adapt and extend its use beyond the obvious balance-related controls.

The key difference in the IMS framework is that both PCEF and PCRF have defined interfaces based on the Diameter standard, which makes integration and interoperability much more straightforward. So use and application of policies is not just restricted to closely integrated systems, but something that can potentially be accessed by any Diameter-compliant system.

Though the PCEF and PCRF are very closely related, there is a natural separation of the enforcement and rules functions. Typically, the enforcement function sits very closely integrated with the core network switching, where subscriber sessions are throttled, upgraded, terminated or redirected. However, the rules function is placed much closer to the business support systems, where customer-related information is maintained and can be used as part of the policy decision process.

Customer Experience

Effective use of the PCRF is critical to the success of next generation services, where operator policies and controls can have a big impact on the customer experience. Take for example operator policies on a simple prepaid service. The traditional prepaid model would prevent usage once a balance is fully depleted, until the subscriber 'tops-up'. However operators can upgrade this service by adding policies to control automatic top-ups, or balance 'overdraft' facilities if the subscriber has a regular top-up pattern and the credit risk is deemed to be low.

These are simple examples, but when we look at convergent services Policy Management can play an even bigger role. For example, policies can be used to switch automatically from a postpaid payment method to prepaid, when a pre-determined level of usage has been reached. This could be an operator driven policy or perhaps even an option specified by the end-customer if so desired.

Policies can also be closely linked with changes in tariffs. For example, a policy could be implemented to provide increased bandwidth on-demand for a premium service, and this may also trigger a premium tariff to be applied for the data access for the duration of the service.

Roaming Regulations

There is no doubt that Policy Management has a key role to play in the service delivery and charging models of the future. However there is also an imminent need for Policy Management being driven by the regulators.

In the latest round of EU roaming regulations, it is dictated that by March 2010, operators must introduce an automatic cut-off mechanism when roaming charges reach €50, unless the subscriber voluntarily chooses another limit. This is to prevent the so-called bill shock that has been widely reported associated with data roaming, and means that operators will need to implement real-time policy controls for all subscribers, not just the prepaid ones.

This is no trivial task, and there really is no time like the present for operators to look at their charging systems and decide how to implement the appropriate Policy Management functions. Where policy is concerned, you somehow knew that the politicians in Brussels would have their say.

Dominic Smith
Dominic.Smith@cerillion.com

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Cerillion Celebrates 10 Years

As Cerillion turns ten years old at the beginning of October, Dominic Smith talks to Louis Hall, Cerillion CEO, about the company's achievements, the changing telecoms landscape and his vision for the future.

Louis is a co-founder of Cerillion and led the management buyout of the business from Logica PLC in October 1999. He has over 20 years experience in IT. 19 years of that has been in OSS and BSS.

Dominic Smith: It's now ten years since Cerillion emerged following the buyout from Logica. Can you remember what was happening as the company prepared to launch?

Louis Hall: One of my strongest memories is of going to HSBC to collect the bankers draft and delivering it to Logica to complete the management buyout. This was the culmination of many months hard work in preparing the business case for Cerillion, but there was no time to sit back and celebrate. This marked the beginning of an exciting new venture and we had to get the business up and running very quickly.

DS: Having been a division of a large company, and then to suddenly be a standalone small business must have posed some very interesting challenges?

LH: At the outset, there were just twelve of us using borrowed office space in a corner of one of Logica's London offices. My first priority was to raise some initial funding as at that point we had only raised enough capital to fund the MBO. We had very limited working capital which meant we had no more than six months to find the necessary investors for the business to have any chance of survival. We needed to start recruiting aggressively, find our own premises and put in place the infrastructure we needed to run our operations. We also faced the considerable challenge of convincing the handful of customers we inherited on day one that we were serious, and that by becoming a separate business it would actually be better for them in the long run. Looking back now it was something of a mountain to climb, but our timing was good as the stock market was buoyant, and we were confident that there was a real opportunity for us to grow as a specialist business support systems (BSS) vendor.

DS: The last decade has been something of a rollercoaster for the telecoms industry. Not long after the launch of Cerillion, we had the famous 3G license auction here in the UK in early 2000, followed by the burst of the dotcom bubble and the telecoms downturn in 2001-2. Since then we have had significant changes in technology with the move towards all IP networks helping to drive further investment and growth in the industry, whilst the growing influence of regulation and deregulation continues to change the telecoms landscape. For a company starting out in 1999, how has Cerillion been able to retain its focus whilst keeping up with the pace of change?

LH: You have to remember that we were not completely new to this business. As part of Logica, we had been providing billing systems going back to 1992/3, so we already had the experience of the explosion of growth and activity around GSM. However, where as a systems integrator Logica was geared towards the best-of-breed integration model, our experience had identified a clear opportunity for an end-to-end 'best-of-suite' solution.

From day one, we have focussed on two things. Firstly, our customers – this sounds obvious, but in such a dynamic industry it is absolutely crucial to build a long term relationship with your clients. As a smaller vendor, we have been able to create very close partnerships with our customers and be much more flexible in our business model than some of the larger suppliers in our space can ever be. The second point of focus is on providing end-to-end complete solutions, even when this was at times unfashionable. Though the BSS market hype seems to swing between niche best-of-breed vendors and large solution providers assembling 'best-of-suite' solution stacks, we have always stuck to our belief that providing an end-to-end system provides the fastest possible implementation, best value for money and lowest risk solution.

DS: You mention the focus on customers, can you provide some examples?

LH: You can look at our relationships with Tele2 and O2 as great illustrations of our long-term partnership approach. We had been working with Ritabell in Estonia since 1996, when Tele2 acquired it in 1998 as its initial entry into the Baltics. Since then, we have supported Tele2's expansion into Lithuania, Latvia and Croatia, with each site regularly upgrading to the latest version of our CRM & Billing application. I'm also very proud of the work we have done together with O2. This has encompassed their pioneering UMTS trial at Manx Telecom in 2001, the first live launch of HSDPA services in 2005, and helping Manx Telecom to become the first operator in the world to achieve BABT compliance for billing accuracy of both fixed and mobile services. During that time, Manx Telecom has changed ownership from being part of BT Group to becoming part of O2, and now a division of Telefonica Europe, but our relationship remains as strong as ever.

DS: What other achievements do you think really stand out?

LH: I think just still being here is in many ways our most impressive achievement. There have been many companies who have come and gone over the last 10 years, but our business remains strong. We have grown to more than 40 customer installations over an incredibly broad range of technologies and geographic locations worldwide, delivering a mix of CRM, billing, provisioning, mediation and interconnect solutions. We support everything from fixed line, mobile, broadband and convergent multi-service operators, to resellers, MVNOs, femtocell-based FMC providers, and we also have a client in the finance sector with our system supporting the clearing of transactions on the London Stock Exchange. This diversity of customer base underlines the adaptability of our core system to support pretty much any type of transactional business model.

The shape of our business has also changed considerably. From being a wholly UK-based operation, we have successfully established our offshore Global Solutions Centre in India, providing great flexibility in our resource profile whilst helping us to reduce overall costs. Over the course of ten years, we have succeeded in developing and retaining key staff which is so crucial to the on-going success of the company. Though much of the focus in this industry is on technology, it's really all about the people and we have grown and retained a fantastic team.

DS: How has the 'billing' industry changed during this period?

LH: Consolidation is a feature of any maturing market, but the whole 'billing' market has changed considerably, driven mainly by the trend towards the so-called 'best-of-suite' applications. Ten years ago, you could go to the old Billing Systems event in London and there would be nigh on 100 vendors all pitching their wares. Nowadays, there are much fewer providers than before and even less who are true billing specialists. We see this as a great opportunity for us as a credible alternative to the very large solution providers who have dominated in the past.

Convergence continues to be one of the main features of this industry, though what it means has changed and evolved almost continuously. Originally used in context of billing mobile and fixed services on the same system, the focus switched to convergence of voice, data and content services, and these days it gets banded about to describe convergence of payment methods (i.e. 'prepaid' and 'postpaid'). There is also a new wave of terminology that has become part of the standard vocabulary: Rating has been replaced by the ubiquitous 'charging'; Revenue Management has superseded plain-old Billing; it's also no longer about the Customer Relationship but rather the Customer Experience; and we now have Policy Management being used where in the past it was all about 'rules'.

I think one of the greatest leaps forward has been in the area of standardisation. In the past, billing and standards were almost poles apart. With the exception of TAP Roaming, there was pretty much no standard being widely adhered to in the billing domain. A few initiatives such as the IPDR tried to standardise CDR formats, but this never reached a global acceptance. Though IMS has not turned into the headline grabbing success everyone hoped it would be, much of its benefit comes behind the scenes in the standardisation that has taken place. Agreeing on a set of standard charging models which can be applied to any kind of service, and a standard charging interface based on Diameter, is a huge step forward in the 3GPP / ETSI specifications.

The highly influential TM Forum has also embraced the billing world following its takeover of the old Global Billing Association (GBA), and we are actively involved in helping them update the TAM and eTOM models to incorporate the latest billing-related features and processes.

Though you can argue that standardisation leads towards commoditisation, there is still a huge potential for operators to differentiate their services and tariff models when equipped with the right systems. And by having standardised charging interfaces it will be much easier to replace or upgrade the charging systems rather than being locked in to a proprietary vendor system.

DS: And how is Cerillion addressing these issues?

LH: Acquisition of niche technology may provide the fastest way to tick a functional box, but harmonising the underlying platform technology may take much longer and result in a much higher cost of ownership. So as the market consolidates through mergers and acquisitions to build 'best-of-suite' applications, we are continuing to expand our own functional footprint 'organically', i.e. through in-house development. This is in line with our core focus of providing end-to-end pre-integrated solutions which can be delivered in a modular fashion.

One of our key areas of development over the last couple of years has been what we call the Total Convergence Architecture (TCA). Though all vendors have been talking up their 'real-time' credentials for many years, most have only focused on convergent charging for prepaid and postpaid services. We recognised that real or 'total' convergence requires much more than just a charging engine, it needs to address the full lifecycle of customers, products and services. We have worked with the 3GPP specifications to ensure we comply with all the necessary standards, but we have also put the solution in context of the TM Forum's Application Framework (TAM) to provide a complete blueprint for total convergence using industry standard terminology.

DS: We are now on the verge of '4G' deployments based on the latest telecoms technology – Long Term Evolution (LTE). In some ways this feels like the industry has gone full circle since the 3G hype at the time of Cerillion's launch. What can we expect from LTE and what part does billing have to play in its success?

LH: Ten years ago, the billing community was addressing the challenge of how to deal with the predicted volume of content and data services. Of course it is only really now that we are seeing mass take-up of content and 'mobile internet' services, and this has really been driven by the growth of the Blackberry and emergence of the iPhone, which have yielded a whole new ecosystem of content producers and application developers.

LTE will actually provide the sort of speed and bandwidth that many people naively thought would come with 3G. Rather like the software developers who designed games and applications to use the latest processing power of a PC, the phone app developers will be able to exploit the increased capabilities in the mobile network and devices to create even more compelling user applications.

There are some fundamental changes in the network infrastructure for LTE, but the essence of these simplifies integration with the billing domain. The complexity will come when faced with a hybrid mix of legacy networks and LTE during the transition in network architecture. So from a billing perspective we need to make sure we can support this smooth evolution.

Many people have also talked about billing becoming more straightforward in a 4G world and there is an expectation in many quarters that this will mean flat-rate. However, though users expect simplicity, and flat-rate is certainly that, behind the scenes there will be an even greater need for detailed event-based pricing and settlement with the various members of the content value chain. 'Free' content has been the norm across much of the internet, but we are now seeing this change as many providers are looking at ways to 'monetise' their content, and this means a swing back towards value-based pricing and innovative product bundles. So we firmly believe that flexible billing and charging systems have a key role to play in making 4G a success.

DS: And what else should we be looking out for over the next few years?

LH: There's always the challenge to identify the next big trend in the industry, and one that is gaining momentum is Cloud Computing. Software as a Service (SaaS) has been floating around in the IT sector for some time now, but it seems that the emergence of Cloud Computing may just be the SaaS opportunity the telecoms operators have been looking for as they look to transform themselves into ICT solution providers. And the good thing for us is that having suitable business support systems for this on-demand environment will be absolutely critical.

DS: And finally, what does the future hold for Cerillion?

LH: Following our focus of organic product development rather than technology acquisition, we are continuing to invest in our R&D programme to increase the overall functional footprint and depth of our product suite. We are also investing further in our relationships with integration partners, providing training and the requisite tools to help them sell and deliver Cerillion solutions. Though being a full-service company is a core strategy, we recognise that to continue our growth we need to expand our channels to market. This is particularly important in regional markets where local presence is deemed crucial. Overall, the billing market still offers a huge potential for growth and we believe we are very well placed to take advantage of this. There are now fewer players in the market and even less who are able to provide the breadth of solution that we can, which means a great opportunity for us to capitalise on our position and expand our customer base.

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Meet Cerillion at AfricaCom 2009

Cerillion will be exhibiting at AfricaCom 2009, taking place from 11th-12th November at the CTICC in Cape Town, South Africa.

Now entering its 12th year, AfricaCom is the longest established and largest annual Pan-African telecoms event. Having evolved to reflect the current market dynamics, the event embraces the entire telecommunications landscape in both its multi-streamed Congress and accompanying Exhibition. Year-on-year it continues to offer African telcos the chance to meet new and existing suppliers of the highest calibre, discuss the future direction of their business and plan for their expansion.

Book an Appointment

Cerillion will be exhibiting at Stand #C10 and promoting its unique bundled component product suite including Revenue Manager, CRM Plus, Service Manager, Mediator Plus and Interconnect Manager.

Find out how we can help your business to flourish, with solutions to address key industry challenges, including:

• Improving time-to-market for new services
• Reducing the cost of billing
• Maximising interconnect margins
• Improving revenue assurance
• Increasing operational efficiency

If you'd like to pre-arrange a meeting with a Cerillion representative, please complete our appointment form.

See you in Cape Town.

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