Should You Bill at The Edge Or in The Core?

This is  a particular bugbear of mine – the recent tendency of vendors to try and push solutions for charging “at the edge”.  The question is: do they improve an operator’s overall charging capability? I don’t believe so.

Edge charging solutions manage charging (i.e. that price usage, and bill a user) within or close to the network elements that deliver particular services at the edge. They are unlike traditional charging solutions that manage charging as part of the overall customer management at the core of a service provider’s systems. A simple example would be an application that takes mobile data usage events and creates charges from them which runs on the same server as the GGSN (a mobile data gateway).

This tendency to push such solutions has been led, I suspect, by network vendors wanting to get a part of the lucrative BSS and OSS market. Recently it has been taken up by traditional billing vendors trying to combat the move by the network vendors, and also to try and sell additional solutions into a saturated (and somewhat dissatisfied – though that’s another story) market.

The argument for edge based billing seems to be twofold: that edge based billing performs better – it has lower response times to charging requests because the charging application is physically closer to the network kit that controls the service delivery; and that edge based billing systems can be tailored to or optimised for the specific features of the service or network device that they are associated with.

My concern is that edge based billing undermines an operator’s ability to: (1) deliver convergent user experiences of products and charging; and, (2) benefit from the convergent management of those products and charging. What we aim at with convergent billing is a customer experience of products, charging and billing that is the same regardless of the type of service consumed. The customer receives one invoice, they may have one product that covers all services (i.e. bundling of services), and their experience of the charging for different services is the same (e.g. all of their services are charged in real-time, the same constructs are used). We also aim to deliver converged management of the charging and billing for those services. The implications of this are that the operator doesn’t need to configure one offer in many different places, they don’t need to provision a customer’s instance of a product in many different places, when products change they don’t need to update multiple systems and so on. In order for this to be the case we need to have one central place where we perform charging and billing for customers in the same way – irrespective of service. As soon as we have charging carried out differently, in different places, for different services then we lose these abilities (or exercising them becomes significantly more difficult). It moves us back to the bad old days of having different rating and billing engines for each service – one for data, one for voice, one for SMS etc.

Telecommunications billing has always been a delicate balance between performance and optimisation on the one hand and coherence and agility on the other. Charging at the edge maximises performance and optimisation but at the cost of sacrificing service coherence and business agility (in terms of changes to and introductions of products). The downside of charging at the edge, however, is rarely mentioned – and never by the vendors of these solutions.

I have been preaching the holy grail of convergence for a couple of years now. While it has been hard for operators to realise this vision, we were making progress, so the rise of edge based charging solutions has been painful for me to watch. I will admit that there are scenarios where edge charging makes sense – when convergence isn’t your aim, or you aren’t looking to be a multi-service provider, for instance; or where performance and optimisation are more highly valued than the benefits of convergence. I just don’t believe that these scenarios will apply to most providers. So operators should tread very carefully when before being sucked into the hype of edge based charging solutions.

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2 Comments to “Should You Bill at The Edge Or in The Core?”

  1. Hi Paul,
    Those are good points. I probably have overlooked the difficulty that oerators who have no real time capacity face. Taking that into account though, I think that operators who see edge based billing as a quick fix to issue of real-time billing are likely to underestimate the longer-term issues that they will facebecause of this decision, and the barriers that they will place in their journey towards convergence.

  2. Hi Doug,
    I agree 100% that you should bill at the core and not the edge. I too lament the use of “policy control” close to network elements to remove the need to bill in real time at the core. But I do see the trend.
    Many operators are starting from a point where they have no real time rating/billing capability for a service. Rather than replace their legacy [postpaid] billing system with a more advanced one, they instead opt for a “simple”/fast solution with the insertion of a policy control point that more than just controls the service, it essentially rates it as well. The fully converged solution is better, but far harder for the operator to achieve. They can live with the constraints this introduces (notably lack of service convergence and simplistic pricing models) because at least it keeps them in the market. The alternative is to embark on a transformation that is high risk and a long time before it pays dividends. Of course the vendors always say you can achieve convergence just by routing more services through the new control point… so there is an excuse.
    So I agree with everything you say above, but I think your post above downplays the difficulty the operator faces in achieveing the converged solution up front. Adding in some form of charging at the network edge specific to a service is the easy option.
    My fear (and I suspect yours) is that this easier way of “fudging it” will dominate the industry so much that it becomes the defacto standard and the benefits of convergence are lost on the industry until the services themselves converge in the network element.
    Cheers,
    Paul.

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