This document analyzes the costs of offline and online mobile charging and billing (C&B) systems. It finds that online C&B can reduce costs per transaction compared to offline systems. Different operator scenarios are examined, finding that greenfield operators and prepaid market operators tend to have some cost advantages over incumbent postpaid operators. While online systems have higher initial costs, they enable increased transactions and services, helping to reduce long-term C&B costs per transaction.

1. ” Cost analysis of Mobile Charging and Billing” Arturo Basaure November 2005

3. Cost analysis framework Top-down approach: FDC, ABC Bottom-up approach: ECPR, LRIC+ Our framework: ABC/TCO combination

4. C&B Architecture source: 3GPP

5. Offline and online C&B processes CTF : charging trigger function CDF : charging data fucntion CGF : charging gateway function OCF : online charging function ABMF : account balance management function RF : rating function BD : billing domain online offline

6. Online Charging System (OCS)

11. Assumption for cost estimates Results from interviews *For CAPEX costs, we assume a payback period of 5 years (equal devaluation) Personnel and maintenance costs increase 20% Integration costs :6x Billing system: 3x OCS: 3x Billing system: 5x, CGF (Mediation): x Online Offline

17. General comparison : OPEX, CAPEX, Charging and billing *OBS: We consider integration costs as CAPEX (55%) and OPEX (45%) CAPEX costs OPEX costs

20. Postpaid vs. prepaid country Postpaid market (e.g. Finland) Using online prepaid for introducing new services (e.g. content and games). Prepaid market (e.g. UK) Switch to online could be faster because it involves more services.

21. Outsourcing the OCS Example of outsourcing: Paying according to the number of transactions. Source: Am-beo’s ”nCharge” OBS: the pricing curve is not linear. It represents a volume advantage.

22. Operator cases 2G operator with 3G license 2G operator without 3G license Greenfield operator with 3G license Greenfield operator without 3G license (2G MVNO) (2G and 3G MVNO)

23. Service usage forecast (millions of transactions/month) Prepaid market: 70% prepaid penetration Postpaid market: 95% postpaid penetration

25. Results in graphs : a) 2G operator with 3G license

26. b) 2G operator without 3G license (outsourcing the OCS)

27. c) Greenfield operator with 3G license

28. d) Greenfield operator without 3G license (outsourcing the OCS)

33. Thanks!