Loop-around architecture provides cost-effective prepaid wireless services

Wherever one goes internationally, prepaid telephony services of one sort or another have gained a growing acceptance for a variety of applications. The best example of this is the prepaid phenomenon that has swept the wireless industry over the last few years. Today, in most parts of the world, cell phone customers have readily accepted, even demanded, the premise of prepaid service, where payment is expected before calls can be made. The success of this service has placed important, and often unexpected, demands on the wireless carriers.

The question for those wanting to offer prepaid service for the first time, or improve the service they currently have, is how to implement a solution in the most cost-effective manner. On the one hand, service node platforms offer a feature-rich solution to carriers whose subscriber base is relatively small and geographically confined. On the other hand, intelligent network (IN) platforms can be a good solution for those service providers that have already made substantial investments in IN technology in the network.

But, often neither solution is exactly right. A service node can be expensive due to trunk tromboning costs, a result of physically routing all prepaid calls to and from the prepaid platform. An IN solution can be expensive because of necessary switch upgrades and using a technology that is still evolving. The ideal solution uses existing network capabilities without the need for tromboning, assuming the strengths of both approaches without incurring many of their costs.

A loop-around prepaid system offers carriers the happy middle ground they've been looking for. A loop-around prepaid system is a low-risk alternative that provides the most important features of an IN solution while using standard (and not expensive IN) capabilities in the network. Plus, it saves carriers money on the cost of calls by eliminating tromboning. That's music to any service provider's ears.

Flexibile solution
There are an estimated 200 companies worldwide offering systems to support prepaid calling services. Many of these systems are built on PC-based platforms using software that doesn't offer the level of reliability or scalability that true telco-grade systems must provide. Loop-around prepaid systems offer both the quality of service and the scalability needed to expand quickly to meet telecom providers' growing needs. An initial system that handles 20,000 subscribers may have to be upgraded to serve 100,000 within a year and 1 million subscribers in three to five years, if circumstances and marketing plans are in alignment. A loop-around system can handle these and much greater numbers of subscribers.

As important as scalability is flexibility. Although many parts of the world still have heavily regulated services and rates, the proliferation of calling plans and incentive programs offers carriers an opportunity to package services as creatively as their systems allow. Prepaid services platforms should support a sophisticated array of charging options, from complex distance-based schemes to much simpler one-rate calling plans. Platform flexibility means pricing options based on day and time, call origination site, holiday-centered calls, local or long distance calls, home- or non-home-based calls, friends and family discounts, and so on. A platform's ability to handle taxes and the multiple tariffs that can sometimes apply to a single call needs to be considered. Due to its similarity to a service node approach, a loop-around platform offers a wide array of charging options.

Eliminate tromboning overhead
The loop-around prepaid platform is not only a money-maker—it's also a major money-saver for carriers, because of its call processing architecture. In a traditional service node implementation, calls travel from the network switch to the prepaid system and back again. Because the journey can be thousands of miles in length, trunk capacity can be tied up, and significant tax and tariff charges can accumulate. So, although a service node generally offers a rich set of prepaid services features, there are cases where capacity and tromboning considerations require a more efficient approach.

The loop-around architecture retains real-time control over prepaid call processing and offers most of the features characteristic of a service node approach. Its biggest benefit, however, is that it eliminates the need for call tromboning. Regular SS7/ISUP messages are delivered to the loop-around platform in the usual way and are used by the prepaid services application to deliver service functionality. However, the trunks associated with these signaling messages are physically connected in pairs at the switch. There is no voice connectivity to the prepaid platform.

Is a loop-around approach the best solution for carrier environments in the face of what service node and IN technologies have to offer? If you've accurately identified your target market's needs, the answer may well be an enthusiastic "Yes!," especially if fast implementation and capital constraints weigh on your decision. IN is an evolving technology that requires a substantial financial investment in new hardware and software. For the economy-minded service provider with an aggressive business plan for introducing prepaid calling services, the loop-around approach offers an optimal balance of price versus performance. It offers the features promised by IN, but at a significantly lower cost.

New market opportunities, higher ROI
In many parts of the world where reliable land-based telecommunications infrastructure is problematic, if not non-existent, cell phones have become the most practical way to communicate. Needless to say, the rush of new customers creates collection challenges for carriers that would like to introduce or extend such services without waiting nervously for payment by month's end.

Purchasing talk time in advance has become an increasingly acceptable way for users to control their monthly costs, serving as a built-in budget for pricey wireless services. Parents who give their children cell phone services, for example, can be sure of controlling the monthly phone overhead of their chatty teens with the equivalent of rationed conversation that cuts off service when the planned prepaid amount is exhausted.

The advent of prepaid features, combined with the cost economies of a loop-around architecture approach, is changing the cost equation of delivering wireless service and the predictability of cash flow for service providers who want to extend cell phone services without worrying about customers overextending themselves. Aside from eliminating debt-collection costs from delinquent accounts and the improved cash flow from up-front payments, prepaid services can dramatically reduce provisioning costs. Estimates suggest that prepaid services provisioning costs are less than one-tenth the cost of regular post-paid services when administrative overhead, credit checks and other costs are factored in.

Prepaid telephone service offers tangible benefits for buyer and seller alike. And, the unique loop-around architecture makes prepaid an attractive option to carriers intent on growing their customer base in an affordable and cost-effective way.

About the author
Steve Menear is senior director, account development for the Intelligent Network Division, Comverse Network Systems, A division of Comverse Technology Inc. He can be reached at 1025 Briggs Rd., Suite 100, Mt. Laurel, NJ 08054; Tel: 770-971-6005; e-mail: smenear@comversens.com. (Back to top)