Billing, Charging & Settlement

Originally, telecoms billing was post-paid. In other words, a bill (originally this was generally a paper bill) was generated in arrears periodically stating what was owed to the CSP by the customer. The customer was then expected to settle the bill (payment). The bill would typically show a number of different charges, including "line rental" (a fixed charge to cover the cost of maintaining the line and the network) and "call charges" (a variable charge for calls made).

Telecoms bills were calculated according to a number of parameters. For example, the charge for a call would vary depending on factors such as the time of day, the distance and the duration of the call. Initially, consumer bills were typically summary documents, but later so-called "itemised billing" was introduced, which involves listing the charges for individual calls.

With the advent of mobile/wireless telecoms, a new type of telecoms service - prepaid - was introduced. This involved the customer paying a sum in advance, which was depreciated as telecoms services were consumed. The introduction of prepaid services necessitated a change in technology: the solution that supported "prepaid billing" needed to operate in realtime or near-realtime to ensure that customers could not use more services (and therefore incur more charges) than their balance permitted. Prepaid billing became known as "realtime charging" or "online charging" (to contrast with so-called "offline" billing systems that run in batch).

Realtime charging was typcially implemented using a completely separate infrastructure to the billing systems used to support postpaid or contractual customers.

Although post-paid and prepaid billing and charging were typically implemented separately, lately it has become necessary or desirable to offer more flexible and hybrid billing models. This has resulted in so-called convergent charging, which refers to solutions that can support different subscriber types, different networks and different billing models using a single convergent billing system. Increasingly, convergent charging suppliers emphasise the desirability of basing such as solution on a single data model.

Settlement is the term used to refer to the processes and systems that enable CSPs to pay, and receive payment from, partners and suppliers. This includes Interconnect settlement, as well as settlement with content providers, roaming partners and so on. Settlement solutions also often include billing capabilities, as well as Partner relationship management (PRM) functions, Business intelligence (BI) and so on.