What is real-time billing mediation?

What is real-time billing mediation?

August 04, 2021

Real-time billing mediation is the process of using up-to-the-second data usage information to proactively identify errors, prevent inaccurate invoicing, notify customers about usage thresholds, and more. 

Telecom operators and communications services providers use real-time billing mediation to retrieve usage data from different network equipment and convert it to a uniform format that a billing system can read and process. A mediation system quite literally mediates data between the operational (OT) and informational (IT) systems as it collects data from network operations (such as switching) and delivers it to downstream systems (such as rating). 

Usage data is generated whenever traffic flows through the communications network. This information is captured as an event or call record (in different formats dictated by the data source). This usage data has to be processed and converted to pricing so that the telecom subscriber can be billed/charged for the use of the network. That’s the mediation system’s job: collating disparate data, normalizing it, and delivering it to the rating engine for conversion into a charge. Mediation can also involve “correlation”, which is joining two or more related streams of data that don’t have a 1:1 relationship with each other. 

You could say that a billing mediation system exists for the specific purpose of transferring data between different processes and making it usable for the entire system, from network operations to OSS/BSS and even fraud detection and business intelligence. 

How real-time billing mediation works

Every time a customer uses a telecom service—be it a voice call, text message, or data traffic—usage data is generated by the network switches. For voice services, this data is referred to as a call detail record (CDR), for data connections, it’s referred to as an internet protocol detail record (IPDR), and for other value-added services (such as renting a video or downloading a song) it’s referred to as an event detail record (EDR). 

Mediation systems can read and process all the different types of detail records generated by different network elements. Detail records contain a variety of information, such as where the call originated and terminated, the duration of the call, megabytes of data transferred, number of text messages sent, etc. 

When a detail record is received, the mediation system cleans and pre-processes the data. This includes removing headers/trailers, adding required fields, aggregating partial records, removing unwanted data, and validating it with the switch. 

After this, the data is transformed into the format needed by the systems that will consume this data. Finally, the mediation system delivers the data to the downstream system for further processing. 

To sum up, a real-time billing mediation system:

  • collects and validates detail records
  • filters out irrelevant data
  • aggregates partial detail records
  • normalizes the data
  • formats the data for downstream consumption
  • distributes data to downstream systems

For telcos, real-time billing mediation systems are vital because they allow communication services providers to create innovative consumption-based pricing models. For subscribers, they represent the freedom to only pay for what you use. For both, it’s an opportunity to break away from simplistic “one-size-fits-all” subscriptions that no longer serve a real purpose and fail to keep either party happy. 

The history of billing mediation systems

While real-time billing mediation systems are relatively new, billing mediation systems themselves have been around since the advent of commercial telephony. 

Initially, telephone operators charged a flat rental or uniform fee for their services. However, as technology advanced and long-distance calling, tele-faxing, and other tele-services gained traction, there arose a need to develop multiservice subscription bundles. For the first time, telephone companies were faced with the need to collect usage data from multiple different network elements and transform these into a coherent charge. Enter, billing mediation systems. 

With a mediation engine in place, operators were able to collect subscriber-level call data from different parts of the network, convert it into a uniform format, and apply differential rates for different services. In this way, disparate network data was first converted into a paper bill. 

As successive generations of telecom technology developed, mediation systems also advanced and became capable of handling more complex transactions. As newer products and services were introduced, mediation systems helped to monetize events such as clicks, downloads, API calls, bandwidth usage, and more. 

By building mediation into their billing systems, telcos have empowered numerous verticals to offer consumption-based packages to their customers, birthing the Anything-as-a-Service revolution. 

Mediation has become relevant to a whole series of areas, such as video game analytics, industrial IoT, “over-the-top” media, and innumerable scenarios enabled by 5G technology. Even as you read this, 5G’s event-driven architecture—in tandem with new IoT devices, evolving protocols, emerging use cases, and novel revenue models —is pushing the boundaries of real-time billing mediation systems’ capabilities.

Advantages of real-time billing mediation

5G connectivity and IoT device proliferation have increased demand for real-time mediation systems’ ability to turn a chaotic stream of events into a manageable stream of valid records: the mandate to enable real-time billing and charging. 

Real-time events are opportunities to monetize 5G through in-the-moment offers such as behavior-based pricing, tempting upsells presented at the perfect moment, or attractive special deals (among other things). However, real-time insights lose their value if decisions and actions are not taken within the 10-millisecond window that 5G latency demands. Without real-time CDR processing and real-time billing mediation capabilities, operators risk losing revenue in the short-term and being unprepared to capture emerging opportunities in the long-term.

Real-time billing mediation has the capability to prevent fraud as it happens. Since real-time mediation works on in-flight data, smart billing systems can spot anomalies in real-time and prevent fraudulent calls from going through. Given that telco fraud costs the world $32.7 billion annually, this is quite a game-changing advantage. 

Best data platform for real-time billing mediation

In the 5G network, billing and mediation are a complex web of multi-dimensional arrays that gather, analyze, and reconcile data from millions of individual events per second. This introduces complexity and vulnerabilities which makes errors, omissions, misuse, and fraud far more likely.

 To counter this, telcos need a real-time billing mediation data platform that can:

  • Seamlessly handle billions of records an hour, faster than they are created
  • Accurately processes asynchronous and late records
  • Handle duplicate records, missing data, and inaccurately timestamped CDRs
  • Offer predictable low-latency, high availability, and high-throughput support
  • Deliver real-time (ie, under 10-millisecond) business intelligence
  • Automate mediation and auto-learns from each event
  • Scales quickly and easily

In short, modern telcos need a simpler, faster, and more agile data platform that integrates the network and business functions and allows a fluid relationship between network functions, business logic, and real-time learning from data.

Volt Active Data—real-time intelligence for real-time billing mediation

Volt Active Data is a cloud-native data platform purpose-built for real-time, event-driven billing and charging for millions of users interacting with thousands of different music, video, and other streaming services. 

We facilitate monitoring and learning from subscriber usage patterns, mapping those patterns to billing plans, and offering in-the-moment, personalized products. 

The Volt Active Data Platform’s sub-10ms decisioning capabilities drive network monetization, prevent telco fraud, and power digital BSS and other charging and policy-driven transformation initiatives. With Volt Active Data’s elastic scalability, operators can gradually increase capacity in line with demand and roll out increasingly sophisticated services over time.

Want to learn more about what makes Volt Active Data the best data platform for billing mediation? Click over to our new resource library where we’ve organized a range of assets to showcase the advantages and capabilities of Volt Active Data.

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