5G is here. The impact is far reaching and is set to bring about a revolution in many industries including healthcare, transportation, and agriculture. Communication Service Providers (CSPs) around the world continue to build out their 5G networks so consumers and enterprises can benefit from the seamless connectivity, faster download speeds, and the ability to connect thousands of devices at the same time. But CSPs are still looking for ways to grow revenue from 5G. Enter, the future ready charging system; the gamechanger for efficient and effective 5G monetization.

The paradigm shift of 5G Stand Alone (SA)

The 5G network, and more specifically 5G SA, is where the charging function really takes center stage. With 5G SA, the charging function can directly integrate with new 5G network functions, and this enables charging beyond traditional parameters. With a 4G network the integrations only allow CSPs to charge by the byte, so by time or volume. This is still possible with 5G, but integrations with 5G network functions mean that we can charge according to new and innovative charging dimensions, and these really focus on the value to the end customer – things such as number of accesses made to the network and location requests.

The future ready charging system

Now to do this, charging systems need to evolve. Firstly, legacy charging systems can only count bytes, so they can only charge for bytes. But legacy systems are also highly customized and complex, and only support traditional B2B or B2C business models. This modernization of legacy charging systems is driving growth in the telco charging market, which is expected to grow at a CAGR of five percent, from $1.21bn in 2021 to $1.56bn in 2026 according to Omdia.

These systems are evolving towards future-ready charging systems that are cloud-native, modular with microservices architecture, and built to be open and aligned with 3GPP standards. They also support agility and faster time to market with no-code configuration that gives the power to the business and reduces the reliance on internal and external IT teams.

The growth of the edge

As mentioned, 5G creates many new business opportunities for CSPs. Many of these new opportunities require low latency, and so edge computing is becoming increasingly important. This decentralized computing model allows for the processing of data closer to the source, reducing latency and enhancing real-time response and analytics. This is being driven by demand for massive IoT, with the number of IoT connected devices worldwide expected to almost triple by 2030 to close to 30B devices according to Statista, and growth in applications that require extremely low latency that can only be achieved by being located at the edge.

Distributed charging

With this, the charging function is also evolving for edge functionality, and distributed charging will be a key driver enabling more flexible and efficient charging for 5G. According to a recent report from Appledore Research, "a distributed charging framework can be a gamechanger in improving efficiency and enabling new business and revenue models through more granular control."

Today, and whilst 5G network functions are mainly located at the core, CSPs will start to co-locate their charging function, with a central and edge charging function, where edge charging will be used for simple charging and intelligent aggregation. Imagine a smart city, where lots of events are happening simultaneously. To rate and charge for these events individually is highly inefficient and can sometimes cost more to process an individual event than the revenue that can be made from it. To solve this, these events would be intelligently aggregated at the edge, and the aggregated record would be sent for more complex rating and charging activities at the central charging function at a time of low network capacity, allowing for efficient revenue growth.

Growing CSP enterprise revenue

Distributed charging enables both CSPs and enterprises to efficiently grow their 5G revenues. Imagine a farmer, that buys connectivity services from a CSP to operate his fleet of drones for managing and maintaining his crops. He would be charged a basic monthly charge for connectivity services and would also be charged for individual activities. Each one-time request for drone activity would be charged individually, for example a request for high QoS for drone video feed to measure plant health, and this would be charged at an agreed price. For the CSP, charging for these individual activities can be costly, and so efficiently charging for these is of paramount importance so they can grow revenue from these services. To do this, these charges would be intelligently aggregated by the edge charging function, reducing throughput to the central charging function, and reducing processing costs, ensuring CSPs make money for these transactions.

Monetizing an enterprise private network

As more enterprises look towards private 5G networks, they will also look for ways to monetize these, and edge charging provides this opportunity. For example, a port operator that has rolled out a private 5G network. This would enable the port to manage all activities that take place there, but also provide an opportunity for monetization. Using edge charging, the port operator can re-sell this connectivity to shipping companies who enter the port and wish to benefit from their 5G connectivity. The port can create packages that the shipping companies can purchase, and then measure, charge, and invoice for connections made to their network.

Born in the cloud, moving to the edge

Distributed charging systems are set to be the next evolution of monetization systems. As low latency use cases come to the fore and CSPs and enterprises need to meet the ever-growing needs of their customers, the edge is becoming the next frontier for efficient 5G monetization.

Check out the full report with Appledore Research for more information.