Per second charging is neither good for Customer nor for the Industry.

The implications of ‘Per Second Charging’ in Mobile billing in GSM Networks.

                     Author  P. Abraham Paul. 

There are different methods of telephony charging generally known as the Toll free system and Measured rate system. ‘Carlson’s Revised Metering’ method is the universally accepted concept in the “Measured rate system”. The fundamental rule in the Telephony charging is that the Customer is never to be over charged. In measured rate system, the method adopted is to levy an initial call charge as “Answer Fee”,  for every successful call, charged at the time of call answer. Normally, the “Answer Fee” includes "call charge" for a predefined initial part of the call duration. This is followed by uniform or variable periodic charges for the remaining part of call duration. The end fraction is ignored to prevent over charging.

The importance of “Answer Fee”. It may be seen that the call success rate is only 30% to 35% of the originated call attempts, remaining end up in “Busy”, “No reply”, various “Number Unobtainable conditions” and deliberate “Miss Calls”, which use up considerable part of the system and network capacity and resources without bringing in any revenue.   Therefore, in the general interest of business it is necessary to ensure some revenue from every successful call which is charged in the form  “Answer Fee”, when the call is answered. The Telecom Industry will be getting into serious deterioration in their revenue if the “Answer Fee” is done away with. More importantly, charging method need to follow some universal standard. Otherwise it will become total mess both for the operators as well as for the customers.  The best way is to enforce the systems to adopt same universal method of charging; the distinction between Service Providers shall be in offering different tariff plan, using the same basic and universal charging methodology.  

The current debate revolves about the “Answer fee”, the "Periodic Duration" and what is done with the “End fraction” of the call. There can be many options within basic fundamental rules:-

1. The “Answer fee” can be same or different as periodic charge. The "Answer fee" includes the charge for the first periodic duration. While tabulating call charge,  “Answer fee” is added to the periodic charge. The end fraction is ignored and goes un-charged.
2. The ‘Answer fee” can be zero or equal to the periodic charge. The call charge is computed by dividing the entire talk time duration by periodic charge duration. The "Periodic Duration" is kept low so that and the remainder fraction is negligible. This appears to be concept of per second charging. 

Digital systems have much wider scope for charging. Charging and billing is done by computing the Call Data by post processing it in the billing system according to various pre-defined parameters. It is obligatory for the Operators to adopt universally accepted metering practices; the variation can be only in tariff plans. The call charge is tabulated by dividing the call duration by the periodic charge duration, taking only the integer value ignoring the remainder fraction. “Answer Fee” is added to this. The usual practice is to charge the “Answer fee” equal to one periodic charge.  

Call charging philosophy in Wired Telephony systems.  In telephony systems, the average talk time of effective calls is about 140 to 170 seconds. Based on this, the local calls are charged at 180 second duration in the Wired system. However, the long distance calls are charged in quicker intervals to generate enough revenue to compensate Service providers’ long distance network costs.  There is no reason why Mobile local calls and long distance calls also cannot be charged using the same principle.  

The business impact of ‘Per Second Charging’ for local and long distance calls in Mobile systems.

Though, the probability of a call termination instant happening during the periodic charging duration in an on-going call depends on various factors, the mean of the fractions of the end durations beyond the periodic durations can be taken as half of the periodic duration using the simple principle of averaging

Comparison of “Per Second Charging” with “International standard Charging method”

Let us take an example of charging of a GSM calls of average talk time of 165 seconds.

 (i) In the contemporary method, with a 60 paise per minute tariff, and with 30 seconds periodic charging, the call charge will be 150 paise. (Answer fee = 30 paise, and  4 periodic charge of 30 paise each. The end fraction of 15 seconds is ignored and hence goes uncharged). 

 (b) With per second charging of 1 paise per second; this total charge will be 165 paise. (One Answer fee of only one periodic charge duration of one second and 164 paise for the remaining talk time)

The customer ends up paying 15 paise more in the per second charging, unless the rate per second is reduced. Hence, the crux of the matter is 'charge rate' per 'unit time' and not the frequency at which charging is done. In fact the customer is benefited if the charging duration is more as can be seen in the case of land line local calls.

It is seen that an operator is propagating now that 'charge per usage' using per second charging is something they have recently invented. Per second and sub-second billing is already in use for ISD calls in wired and wireless systems. Per second billing for local call in Mobile network was already done by BPL Mobile in 1996 and MAX was compelled to follow suite.  Being G.M. Switching of BPL at that time, I have put forth the above explanation, and the product was withdrawn in due course.  DU in UAE had implemented it two years back. Basically these are only some technology jargon to create a media hype by some volume starved Operators to confuse the customers. Deviation from standard metering plans like universally accepted “Carlson’s revised Charging plan” will only add to the confusion.

Conclusion:

In every business, there are certain straight forward, genuinely rightful rules that safe guard the interest of the user as well as of the Industry. Ignoring these will be cause confusion for the customers and revenue loss for the Service Providers. For example when operators started giving SMS free of charge, I advised them not to do it as it will kill the voice call revenue.  As in every business, GSM Telecom business also thrives by playing with volume. In the past, also Operators tried to offset the revenue loss due to adoption of ‘One Second Billing’ by using it as marketing propaganda to generate more customer volume. But when the competitors were compelled follow suit the advantage was lost and it naturally affected the industry as a whole. The best option for the operators is to adopt standard charging plans and concentrate on good quality service to win over the competition instead of such propaganda gimmicks.  Hope better sense will prevail with TRAI not to agree to some non standard charging ideas that will be not be in the interest of the industry as well as the consumers.

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Author: P. Abraham Paul,

Owner/ CEO Future Communication Network, FCOMNET – Future Groups.

(Ex- Vice President Technical Sales, Siemens Public Communication Networks, India / G.M & SMT TBG, BPL Mobile / TES (I) DOT India)

Trivandrum,   Phone: +91 2446644    e-mail: papaul@hotmail.com