Mobile prepaid phone services

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Abstract

During llic past fcw ycars, lhc mubile picpaid scrvicc lias hccn growing cnponcnlially all ovcr thc wrirld. Four appmachcs liwc bccn proposcd to provirlc mobilc prcpaid scrvicc. Wc dcscribc tlicsc ;~pprrr;~hcs and comparc thcir strcngths and wcakncsscs. Our amlysis iiidicalcs that

thc handsct hascd approach is ti l ~ ~ - c o s l , high-risk sdutiiin. Thc wirclcsr intelligent nctwork appro:~ch is a high-cost, low-risk solution.

The scwicc nodc nppniech is a quick solution, which ~ 1 1 ~ ~ s Cast dcployment with limitcd cilpacily. Thc hot billing approach is an wcragc solulion that cannot pruvidc cc:+limc raling.

Mo

b

ile Prepaid Phon e Services

Y I - B I N G

L I N A N D

M I N G - F E N G

C H A N G , N A T I O N A L C H I A O TUNG U N I V E R S I T Y

H E R M A N C H U N G - H W A

R A O ,

AT&T

L A B O R A T O R I E S - R E S E A R C H

repuicl plrone . . is n lelecommuni-

cation servicc that rcquires a customcr pays hefore thc calls arc made. In the early days, coins played an important role in prcpaid phone service. T h e tclcphonc companics thcn r e a - izcd that coins present ;I rangc of problems. For cxamplc, cxtra overhead is rcquircd to periodically collect thc coins. Furthcrmore, coin payphoncs arc likely to be damagcd duc to vandalism for coin stealing. To avoid equipmcnt damagc and revenue loss, prepaid cards were inventcd, which have bccoinc t h e fastest growing paymcnt method. l‘hc avcragc availability o l smart-card-bascd payphones is morc than 95 percent, while thc comparable figure lor coin phoncs is less than 70 pcrcciit [I]. Prepaid telecominiinic~ltioil scrvices were offered in Europc and Asia in 1982 and bccame popular in tlic United States in 1992 121. In t h e United States, morc than 30 prepaid solution vendors are competing for carrier business [3].

During t h c past fcw years, mobile prcpaid service has grown cxponcntially all ovcr t h e world. In 1997 tlierc wcrc about 60 million Global System for Mobile Communications (GSM) suhscribcrs across the world, and 8 pcrccnt of thcm subscribed to prcpaid service. 11 is predictcd that in 2001, thc number of GSM subscribers will increase to 140 million, and 25 pcrccnt of the customers will subscribc to the prepaid ser- vice [4]. Asian countries such as tlic Philippines, Australia, Hong Kong, Singapnrc, and Taiwan have already shown successful examples of prcpaid services. I t is estimated that thc worldwide prcpaid rcvcnue will be US$lOZ.R billion annually hy thc ycar 2007 (http://www.haskcrviIlc.co.uk).

Iupostpuid service, thc customcr pays for telecommunication service after a pcriod of time, typically a month. Postpaid may exhibit a high dcposit harrier and the risk of bad dcbt. These disadvantages can bc rcmovcd or rcduced by prepaid scrvicc, which allows a smaller prepaymcut to go immediately toward custonier usage. In the beginning, thc prepaid cards uscd in pay phone applications wcrc simply token cards whosc main benefit was to addrcss t h c theft and vandalism issucs associated with thc usc of cash. Later, more advantages wcrc cxploitcd. From the service provider’s viewpoint, busincss opcration costs have been signisicantly rcduccd for prcpaid service. The additional costs of crcdit checking aud collection can bc climinatcd, bccausc no scrvicc is provided if the clid user does not dcposit cnough moucy in the accounts. In other words, service can b c offered to pcoplc with h a d credit (as high as 40 pcrcent of thc prcpaid customer population), and rcvciiiic is rcccivcd typically o n e and a half months carlicr

than for postpaid service. Since it is not ncccssary to bill prepaid subscribers, printing of invoiccs a n d management of accounts arc avoidcd.

From the customer’s vicwpoint, prepaid service provides immcdiale service without tlic iiccd to sign a long-term contract of commitment, which allows hetter control nf spcnding. Although new elcclronic payment procedures are likely to make possihble short-term contracts for post-paid services, such solutions arc not widcly uscd, and most prepaid customcrs do not want any contract at all. Particularly, many end uscrs (especially the young) just want to enjoy the scwice and simply do not want to fill in subscription Sornis. Their nccd can bc satisficd by prepaid service. lmaginc buying a prepaid GSM subscription in tlic supermarket! Furthermorc, prcpaid scivicc eliminates the monthly subscription charge and reduces the perceived risk nf stolcn or lost cards. The above discussion of prepaid tclcphonc scrvices implies that any customcr-imposcd harricr to cntry is rclativcly low. This conclusion is particularly true For mobile phone servicc. In Taiwan, FarEastone reported that i n May 1999, morc than 40 percent of its 1.2 million customers subscribcd ti) prcpaid service williin one ycar of thc company launching prcpaid service in mid-199X.

Although fixcd and mobile prepaid services sharc many characteristics, they have two major diffcrcnccs. First, a fixed telcplionc scrvicc provider knows nothing about tlic prepaid customers [Z]. Sccnnd, fixcd prepaid service ouly allows outgoing calls. On the othcr hand, mobilc prcpaid service allows both incoming and outgoing calls. Thus, no account managc- nicnt is rcquircd in fixcd prepeid service. A subscribcr simply buys a c;illiiig card and starts making calls. As soon as the prepaid balance is uscd, the card is inactive. On thc other hand, to provide mobilc prcpaid scrvicc, a prepaid service centcr is rcquircd to pcrform account managcmciit and othcr functions, as wc claboratc on later. We should also point out that although prepaid service has several advantagcs over postpaid scrvice, it has its limitations. For cxamplc, some mohilc operators do not allow roaming to prepaying customers, sincc roaming costs would quickly consumc the prcpaid credit. 011 the contrary, tlicy allow roaming in the post-paid casc, provided the customcr pays by crcdit card.

This articlc dcscribes and compares four mobilc prepaid service solutions. We will illustrate thcsc solutions based on GSM. Our dcscriptions can he generalincd for othcr mobile phone networks such 21s IS-I36 Digital Advanccd Mobilc Phone Service (AMPS) and IS-95 cdmaOnc. Wc first identify the requircmcnts for mohile prepaid servicc. Then we describe mobilc prepaid

I W O - ~ Y I ~ / U U ~ R ~ ~ . ~ ~

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IEEE Personal Communicatiuns * Junc 2000 6

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scrvicc approaches bascd on hot billing, handsct, scrvicc nodc, and wireless intclligcnt network. Thcsc approachcs are comparcd to provide guidelincs for scrvice providers to sclcct their prepaid servicc platforms.

Mobile Prepaid Services

We use CSM as an cxample lo illustratc how prepaid servicc works. In GSM prepaid scrvice, a customcr subscribes to the GSM scrvicc with a prepaid crcdit. This credit is cither coded into tlic subscriber identity module (SIM) card o r kcpt in the nctwork 121. 111 many servicc arcas, initialization of a prcpaid cus- tomer must bc completed within a ccrtain number of days aftcr subscription. In Taiwan, DrcDaid servicc is

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I Figure 1 . WINprepaid cull origination.

Pour solutions havc bccn proposed to implcment prepaid scrviccs. Thc wirclcss intclligent network approach follows a standard intclligcnt nctwork protocol to implement the prcpaid mechanism. In this approach, the crcdit-counting mcchanism is implcmciitcd on the service control point. The scrvice node approach attaches an external nodc to the MSC. This scrvicc nodc is based on computer telephony intcgration (CTI) or privatc branch exchange (PBX) tcchnologics, which implements all prepaid functions without requiring any hard- wareisoftwarc modification t o the mobile service ccntcr (MSC). Tlic hot hilling approach utilizes call detail rccords in cxisting billing systems to implement prcpaid fimctions. A prepaid service ccnter is required, which modifies a prcpaid userk credit on a per-call basis. Thc handsct-based approach performs credit dcdoction at the MS. This mechanism is typi- cally implcmcnted at thc SIM card in GSM. Tn the remaindcr of this articlc, we claboratc on these service solutions and their implcmcntations.

The Wireless lntelligent

Network Approach

The wirele.ss intelligent network (WIN) approach is considcrcd a completc solution to prcpaid service. In this approach apre- paid service curitrul point (P-SCP) communicates with thc MSC through an SS7 signaling network. Sevcral WIN triggers arc defined. At prepaid call sctup and during the call holding time, the MSC eiicountcrs WIN triggers at different stagcs, which rcmotcly instruct the P-SCP to carry out dccisions about how that call should be proccsscd hascd on prepaid applications. All hilling infnrmation for a prepaid customer is stored in thc P-SCP. Thc mobile network may nccd cxtra

SSI

links to accommodatc signaling traffic generatcd by the WIN prcpaid mcchanism.

WIN Call

Origination

Figurc 1 illustrates WIN call origination with the following steps:

* Step 1 - Thc prepaid customer initiates a call by dialing

0 Step 2

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Tlic MSC cncounters the WIN call sctup trigger.

the called party's telcphonc number.

l'hc call sctup process is suspended, and a prcpaid call rcqucst mcssagc is sent to the P-SCP. The message includes the MSISDN, location information of the MS, and called party tclcphoiie number. Thc P-SCP determines whcther thc customer can make tlic call by querying its database. Based on threshold proccssing parameters defined in thc prcpaid billing system, the P-SCP may dcny or accept thc call. Assumc that the call is accepted.

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d

Solid lines: Voice trunk

Dashed lines: Signaling GMSC: Gateway MSC

M S C Mobile switching center P-SCP: Prepaid service control point 5SP: Sewice switching point (end office) * Stcp 3 -The P-SCP instructs tlic MSC

to cstiiblish an integratcd scrviccs digital iichvork (ISDN) (voicc) link to the intelli-

gentperipheral (IP). The IF is a nodc that

contains functions and resources, such as voicc announcements or dual-tone multi- frequency (DTMF) digit collect capabili- ties, needed to cxchaiige information with an cnd uscr.

Stcp 4 -The P-SCP instructs thc 11' to provide the prepaid customer with an

account status notifktion, such as account balancc and the charging rate of thc call to he made.

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Figure 2, call in I N ,

* Step 5 the P-SCP asks thc MSC to rcsume the call setup proccdurc, and the

call is eventually connectcd. The P-SCP starts a countduwii timer, The amount of crcdit decremented (from thc currcnt balance) is dcrivcd from carrier-defined threshold paramc- tcrs, thc rate plan, destination, and timcldetc dcpcndency. dcplctes or the call complctcs. If the countdown timer ends hefore the customer tcrminatcs the call, the P-SCP instructs the MSC to terminate thc call. In normel call completion this step does not exist.

Step 7 - Oncc thc call is terminated, the MSC cncnuntcrs a WIN call release triggcr, which sends a disconnect message to thc P-SCP indicating the time at which thc call is complctcd.

* Stcp 8 -The P-SCP rates the complcted call and updatcs thc customer's prepaid balance accordingly. Thcn it scnds the current halancc and cost of the call to the MSC. The MSC rcleascs thc call.

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Stcp 6 -The call terminates when cithcr the balance

In thc above procedure, steps 3 and 4 are optional.

WIN Call

Terminalion

For calling-party-pay billing, which is exercised in Taiwan, call termination to a prcpaid customer is exactly the same as that for postpaid call termination. F o r called-party-pay billing (which is exercised in the US), the message flow of a WIN prepaid call termination is illustrated in Pig. 2.

* Step 1 -The calling party dials thc prepaid customer's

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Step 2 -The call is forwarded to tlic gateway MSC MSISDN.

(CMSC) of tlic prcpaid MSISDN.

* Step 3 ~ The GMSC encounters a WIN call setup triggcr.

The call setup process is suspcndcd, and a prepaid call request message is sent to the P-SCP. The inessagc iiicludcs the MSISDN and rclatcd information.

* Step 4 - Thc P-SCP dctcrmincs whether thc prcpaid customer is cligiblc to rcccivc tlic call. Assume that the cdll is accepted. Thc P-SCP asks thc MSC to resume thc call setup procedure. * Step 5 - Following thc GSM standard mo6ile .srar;on roam-

ing number (MSKN) rctricvel 2nd c d l sctop proccdurcs [ S ,

61, the ctill is eventually connected. The P-SCP monitors thc prcpeid customer's balance as describcd in step 5 of tlic prcpaid call origination procedure.

For called-party-pay hilling, the call rclease proccdurc for prepaid call lermination is cxactly thc samc as that for prcpaid call origination.

WIN

Prepaid

Recharging

The message flow of WIN prepaid rccliarging is illustrated in Fig.

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3.

Stcp 1 - A prcpaid customer initiates tlic rccharging pro-

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Stcp 2 -The MSC encounters the WIN trigger, and a ccdorc by dialing a spccial number.

quc'y message is sent to the P-SCP. The message includcs the MSISDN of the prepaid phonc and related information. Step 3 -The P-SCP instructs thc MSC to cstablisli a voice channcl tu tlic IP.

aiinouncemcnt and ask thc prcpnid customcr to enter a PIN nuinbcr and rclatcd information for recharging. Then the P-

SCP checks the validity oi the voucher.

* Slep 5 -After crcdit updatc, thc P-SCP asks the IP to play a ncw balancc announcc~ncnt. Thcn it instructs the MSC lo disconnect the 1P. Thc MSC rclcascs thc call, and lhc recharging proccdurc is complctcd.

* Step 4 -The P-SCP interacts with the IF to play an

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The Service Node Approach

This approach is the most widely deployed prepaid scrvicc solution. Many major switching infrastructure providers have predefined call models within thcir distinct swilching architccturc. To deploy prepaid service without intcrrupt- ing existing call models, most mohilc scrvicc providers implement service nodes in tlicir nctwork to externally control prepaid billing.

As shown in Fig. 4, a service node is typically collocat- ed with an MSC, and is conncctcd to thc MSC using stan- d a r d T l l E l t r u n k s assigned t o a p a r t i c u l a r block o f prcpaid numbcrs. T o make the call setup pmccdurc more efficient, high-speed trunks can hc considercd for connec- tion. Since the service node is collocatcd with the MSC, high-speed link deployment cost is acceptable.

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Thc service nodc can be implementcd by using CTI tcchiiiques [7-111 o r PC-controlled PBX techniques 1121.

The idea bchind CTI is to utilize computcr intelligence to managc tclcphone calls. With npplicntion programming

inlerfices (APIs) such as Telephony API (TAPl) [13] and Tclcphonc Services API (TSAPI) 19, 141, prepaid applications for the servicc nodc can he developcd for small installations (e.g., sevcral hundred lines). In 21 PC-con-

trolled PAX, thc software (typically written in high-level languages such as C + + ) in the call control layer can he modified to implcmcnt various telecommunications applications. We have utilized this technique to implemcnt a mobility manngcr for the wircless local loop 1121. Thc samc platform can be used to implcmcnt the prepaid scrvicc nodc cffcctivcly. A PC-controlled PBX provides largcr and morc cost cffcctive solutions (in terms of telephonc line capxcity) than CTI switching. On the oilier hand, 21 CTI platform supports gcneral APIs, which allows fastcr deployment than in thc PGcontrollcd

PAX

platform. approach is illustratcd in Fig. 4:

The prcpaid call originaiioii hascd o n the servicc notlc Step 1 - The prcpaid customer initiatcs a call hy dialing thc called party's telephonc numbcr.

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Stcp 2 -The MSC idcntifics that the caller is ii prcpiid

customer. The MSC scts np thc trunk to ihc scrvicc node. * Step 3 -The servicc nodc authorizes ihc call rcqucst by

consulting ihe prepaid billing platform.

* Step 4 ~ If the call rcqucst is granted, ihc scrvicc nodc sets

u p a trunk back to the MSC, and tlie trunk is cventually coiiiiectcd to thc called pariy. The scivicc node starts credit dccrenicnting.

One may e g u c that at step 4, thc scivicc node should sct up tlie call direcily to thcpublic switched telephone tierwork (PSTN) without passing through the MSC again. By doing so, iwo ports in the MSC arc saved. 'Typically ihis altcrnativc is not considcrcd duc to thc extra overhead incurrcd for interworking to thc PSTN. In general, small switches such as scrvice nodcs arc not allowcd to connect to the PSTN point of interface (POI).

The

Hot

Billing

Approach

MSC: Mobile switching center

SSP: Service switchin point (end office) PEP: Prepaid billing $atform

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Figure 4. Service node prepaid call originntiun.

Hot hilling depends on real-time data collcctorslrouters to transport the CDRs from tlic MSC to the prcpaid scrvice center. The HI,RIAuC needs to bc updated to allowlprevent prcpaid acccss to tlic customers.

Hot

Billing Prepaid Service

lnitializafion and Call Origination

This subsection discusses service iniiialization and call origina- lion for tlic hot hilling approach. Nolc thai otlicr prcpaid service approaches share similar scrvicc initialization procedure dcscrihed in ilic following steps:

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Step 1 ~ The customcr siibscribcs to the prepaid scrvicc

ccntcr at tlic POS or hy calling the cusiomcr carc ccnter. * Step 2 -The prepaid scrvicc ccntcr crcatcs ii subscriber

data record including IMSI, MSISDN, account of credii, period of validity, tariff modcl, and other authenticatinn rclatcd inlormation.

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Step 3 -The prcpaid service ccnter activates the prcpaid service by sending the customer data io lhe HLR, which tlicn crciitcs a rccord for ihe cusiomcr.

T o remove a customer from the prepaid service, thc pre-

paid service ccntcr simply scnds a request to the I-ILR l o clclctc thc cusiomer's record.

Thc hot hilling prcpaid call origination proccdurc is illustrated iii Pig. 6 with tlic following steps:

Stcp 1 - Wlien a customer originatcs a prcpaid call, the IMSI is sent tu tlic MSC.

AuC: Authenticat,ion center HLR: Home location register IVR: Interactive voice response

MSC: Mobile switching center PSC: Prepaid service center

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Solid lines: Voice trunk Dashed lines: Signaling AuC: Authentication center HLR: Home location register MSC: Mobile switching center P S C Prepaid service center

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L ~~ ~- ~~

H Figure 6 . Hot billingprepaid call origination.

* Step 2 - Uascd on the

IMSI,

the MSC instructs tlie HLR * Stcp 3 -If tlie verification is successful, thc llLK down-

to chcck if it is a valid service.

loeds the customer data and a nrcvaid t u to the MSC. Thc . I I

call is connectcd.

* Sten 4 - Whcn the call tcrminatcs. a CDR is creatcd and sent to thc prcpaid scrvicc center.

* Step S - Tlic prcpaid service center dccrements the prcpaid credit hased on the received billing rccord. If tlic hill- aiicc is ncgativc, the prepaid service center instructs the HLK tn suspcnd prcpaid service or delete tlie customer’s rccord.

Hot Billing Customer Query and Recharging

A customer can query hidher currciit balancc through tlic fol lowing steps (Fig. 7):

* Stcp 1 - The customcr makcs a scivicc query call that is * Step 2 - The MSC sends tlie request together with tlic

typically frce of charge.

MSISDN of tlie customer to the lVll and sets iip a voicc path to tlie IVR.

* Stcps 3 and 4 - Thc IVR qucrics thc prcpaid sclvicc ccii- ter lor the balance infnrmatinn.

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Steps 5 and 6 - Thc IVR plays an aiinouiiccmcnt to answer tlie customer.

Whcii the prepaid crcdit has hccn dccrcmcntcd bclow ii

tlircshold, the prepaid servicc ccntcr automatically calls thc customcr and plays a warning mcssagc to remind the customer of credit recharging. Tbc customer may rcchargc the prcpaid crcdit using thc top-up c;ird mcntioned earlier. This rccharriiir nroccdurc is similar to the credit ~

I.

query

.

_ .

nroccdurc illustrated in Fig. 7.

If the prcvaid crcdit is dcvlctcd diuing

_{. .}

a phone call, the credit becomcs ncgativc at h c end of thc p’honc call. T h e ncgativc crcdit is potciitial bad debt. If t h e custoincr does not rechargc thc crcdit, this negative credit hecomes a real bad debt of thc scrvicc provider. Thus, tlic “oiic-

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ing destinations. Somc prcpaid solution vendors s u g g e s t t h a t c a l l l o r w a r d i n g s h o u l d n o t b e offered by prepaid service providers.

T o avoid bad debt, the other three approaches described in this article decrcinciit tlie prepaid credit by seconds during a phone call. In tlie hot hilling approach, scnding these “real-time” CDRs by scconds to tlic prcpaid scrvicc center and pro- ccssing these CDRs at the center may incur hcavy overhead f i n thc network. Practically, thc CDRs arc dclivcrcd and proccsscd 011 a pcr-call basis

and, in snmc cases, on a multiplc-call basis. Tbus, in thc hot hilling apprnach, it is impnrtant to sclcct the CDR sciiding frequency such that the sum of the CD11 sendioglpro- cessing cost and the bad debt is minimized [IS]. Also, service providers may guard against one call exposure by using appro- priate call barring classes. Based on thc thresholds undcr con- sideratinn, tlic nctwork dctcrmincs whcn to warn and dcny scrvicc to a customcr.

The Handset-Based Approach

In tlic liandsct-bascd approach, thc mobilc station (MS) performs crcdit deduction during tlie call and checks whctlier the crcdit limit has been reached. In this approach the prepaid crcdit is s t o r c d in t h c M S . I n t h e U n i t c d S t a t e s , special phones arc required; for GSM, tlie crcdit is stored in the SIM card. Wc usc GSM as an cxamplc to dcscribc how the hand- set-based approach works.

SIM

Curd

Issues

In a typical implcmcntation, tlic mcmory sizc of ii SIM card

is 8 kbytcs; in the later SIM version, it is 16 kbytes [191. This memory is partitioned into two areas. O n e storcs information such as abbreviated and customized dialing numhers, short mcssages reccivcd, menu o l subscribed services, names of prcfcrrcd nctworks to providc scrvicc, a n d so on. T h e other stoics programs that can bc executed to carry out sim- ple commands.

T h e handset-based approach utilizes the GSM Phasc 2

advice ofcha4.e ( A d ) supplcmcntary messagc to transfer the prepaid balance inlormation and tariff schemes. A d prnvidcs inlormalion for thc MS to producc a cnst cstimatc of tlic scrviccs used. AoC consists of two service types: advice of charge

churging (AoCC) and udvice of charge inforination (AoCl). AoCC allows the MS to modify related charging data lields, while AoCI does not. To cxcrcisc liandsct-based prcpaid scrvice, the MS must support AoCC. Oldcr MSs that only sup- call exposure” 121 becomes a major concern in

tlic b o t hilling a p p r o a c h . A p r c p a i d cuslonicr may place the last call and stay conncctcd whilc t b c a c c o u n t b a l a n c c b e c o m c s n c g a t i v c . T h i s o c c u r s hecause most wireless switches do not rclcasc t h e C D R until t h c call has complctcd. Somc scrvicc providcrs arguc that oiic call cxpo- sure may not he a problem. If tlic purchased prepaid c r e d i t s a r e large e n o u g h , tlie user has t o exhaust t h e c r e d i t b e l o r e he c a n o v e r r u n t h c a c c o u n t , w b i c b may n o t b c c o s t cffcctivc f o r I‘raud usage. However, one call exposure may still

bc a scrious p r o b l e m , cspecially whcn callcd- party-pay billing is cxcrciscd and p;ir;dlcl call for- warding service is available. In this scenario, the

MS is used a s t h e call lorwarding mechanism,

Solid lines. Voice trunk Dashed lines Signaling MSC Mobile switching center PSC Prepaid SBIVICB center

and the defrauder consecutively initiates several ~ . .. .

calls to the MS in parallel with differcnt forward- H Figure 7. Tlxeliot bilIingprepaid credit query procedure.

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Stcp 4 -During tlie call, the MS uses the AoC c-parameters as tariff information. It decrements tlic credit on tlie SIM card by incrementing thc used units i n the ACM. If tlie MS identifies thc value of ACM as rcachinr! that of ACM*, thc MS

...

0

mcmory (now under deployment) allows tlic SIM cards to hold tariff table data for varioiis rate plans.

Handset-Based Prepaid Call Origination

Thc prepaid c;ill origination f o r handsct bascd a ~ ~ r o i i c h is dcscribcd in the Eollowine stem (Fie. 8).

~ ~

discomiccts thc call and informs the MSC of c;ill rclcasc. This AoC disconncction nicchaiiism is working autonomously i n tlie MS without any involvcmcnt of the network.

~

Besides call setup, tlie AoC e-parametcrs arc transfcrrcd to tlic MS at tariCf switching (e.g., billing ratc changcs bccausc thc MS roams to another arca).

l o rcducc tlic fraud risk, thc hmdsct-bascd approach may bc combiiicd with tlic lint billing approach. In this case, thc prepaid scrvicc cciitcr in thc hot billing approach is included

III thc prcpaid architccturc. Figorc 9 shows thc message flow

of thc prcpaid c d l origination for tlie combined approach. * Stcps 1-3 -These steps are the same as the call origina-

tion for tlic handsct-bascd approach. Some of the details (i.c., stcps 2 and 3 in Fig. 6 ) i n the hot hilling call setup arc not shown here.

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Step 4 -The call is relcascd whcn tlic call complctcs nor- mally or the MS noticcs that thc prepaid crcdit is used up. In eithcr casc, the MS scnds a mcssagc to thc MSC for call rclease.

Stcp 5

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Tlic MSC generates a prepaid CDR, which is then transfcrrcd to tlic prepaid service ccnter. Unlikc thc rcgiilar CUR, the prepaid CDR includes the AoC c-paramcters. The prepaid service center updatcs thc prcpaid crcdit as in the hot hilling approach. Whcn ACM is above a threshold, the prepaid scrvicc ccntcr may automatically send a warning mcssagc to thc MS for recharging the prepaid crcdit.

From the viewpoint of thc handset-bascd :ipproacli (Fig. lo), this comhination priividcs bctter fraud protection. Whcn thc crcdit in thc prcpiid scrvice center is different from thc MS, the servicc providcr may tcrminate the service for furthcr fraud investigation. From thc vicwpoint of the hot billing approach, this comhination eliminatcs thc possibility of one call exposure. As soon as the credit is uscd tip, the MS lerminates the call, and thc situation is rcportcd to the prepaid service ccntcr.

Bcsides thc extra implemcntation complcxity, a potentiiil issue for the comhined approach is that thc charging information (e.g., ACM and ACM*) may not be consistent for rca- sons iithcr than fraud usage. Thus, synchronization between the prepaid servicc ccntcr and the MS is important.

..

I I \ y ,

Step 1 - Thc prcpiid customcr initiates a call hy dialing the called party's tclcphoiic numhcr. Step 2 - Bascd on thc r;itc plan and othcr piramctcrs (c.g., destination aiid timcldatc dcpcn- dence), tlie MSC sends the A d c-parameter (including charging inlormation, c.g., ACM and

ACM*) to thc MS.

* Stcp 3 - If thc MS supports AoCC, it acknowl- cdgcs the rcccptiim of thc c-parameters. 11 this acknowledgment is not received by tlic MSC, thc

Handset-Based Prepaid Recharging

Like tlie liot hilling approach, a customcr recharges thc prcpaid credit hy purchasing a scratch card.

MSC: Mobile switching center

S S P Service switching point (end office) PSC: Prepaid service center

- ~~~ ~ ~ ~ ~~~

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ignorc AoC by intercepting t h e dcbit commands. Also, it is possible to modify the credit illcgally in thc MS. Thus, it turns out that thc handsct-based approach has poor fraud protection. Scvcral manu- facturers have worked on SIM encryption with thc SIM toolkit.

F r a u d risk can he high for t b c hot billing approach duc to thc onc call exposure concern. As pointed vu1 bcforc, this occurs because most wircless switchcs do not rclease the C D R s until thc calls havc complcted. Fraud risk can he reduccd if mid-call CDR sending is exercised.

Both the service node and W I N approachcs exhibit low fraud risk.

Initial System

Setup

The initial systcm setup cost and time for the handset-based approach is average. This approach does not rcquirc clrangcs to the mobile network infrastructure exccpt that the MSC must support AoC.

On thc othcr hand, the prepaid MSs must bc GSM Phase 2 to

receive the AoC messagcs. Furthermore, special SIM softwarc is required to cxccutc rate plans in the MS. The CSM scrvice providcrs may be locked to a single-source SIM supplier. This situation is undcsirablc, cspccially when the SIM card market is unprcdictablc.

The initial system setup cost and time for thc bot billing approach is average. This approach needs intcgration of prcpaid servicc center, I V R rccharging mechanism and Thc systcm sctup for the service node approach can bc d o n e quickly. T h e mobile network infrastructurc is not modificd. The only system setup cost is tlic cstablishmcnt of the service node. For this rcason, up tn thc cnd of 1998, service node was the only working prcpaid scrvice solution in Taiwan.

The initial system setup time for t h c WIN approach is long, and the cost very expcnsivc. Furthcrmore, this approach

is not a fully dcvclopcd route for many mobile networks to follow. Thc dcsign of services and swilcli softwarc dcvclop- ment for intelligent network is complex. For small and medi- um-sized service providers, a full implementation of an I N

.

Figure 12. prepaid ~ ~service. s ~ ~ ~ e

Real-Time Ratin.9

In thc handsct-based approach, real-timc rating is performcd at thc MS. In thc scrvicc nodc approach, rcal-timc rating is performed at thc scrvicc nodc. In thc WIN approach, rcal- timc rating is pcrformcd at tlic P-SCP. T h c hot billing approach cannot support real-time rating. Crcdit information update dcpends on the MSC capability to send CDRs.

MSCIHLR.

Conclusions

This articlc dcscribcs four inobilc prcpaid scrvicc approaches, and comparcs their weakncsscs and strcngths. Among the approaches, the handsel-based approach is a low-cost, high- risk solution. The wireless iiilelligeiil network approach is a high-cost, low-risk solution. The service nodc approach is a quick solution. It allows fast deployment with limited capacity. The hot billing approach is an avcragc solution that cannot providc real-timc rating. An interesting issuc not covered in this articlc is thc aging problcm. Whcii a mobilc user unsub- scribes to mobile service, lhe mobile identification numbcr assigticd to the uscs is rcclaimed. This reclaimcd number must architecture may n i t bc a realistic uptiin.

Service Features - The handset based apprvach supports limitcd scivicc fcatures because the number of ratc plans that can be stored in the SIM card is limitcd and may not he con- veniently updated. The SlM card also relies o n tlic MSC to provide the tariff charging model.

T h e service f e a t u r e provisioning for t h e h o t billing approach is bcttcr than avcregc, which is typically limited by the pcr post-call charging mechanism.

Both the service node and WIN approachcs support flcxi- ble service features. For WIN, many service features can bc integrated with prepaid service under llie intelligent network platform.

Nonc of the four approachcs can support prepaid short message servicc. Thc reason is that the short message is deliv- ered by the SS7 TCAP, which Camlot not be identified by the MSC for the charging purpose. Instead, charging of the short message is done at the SM-SC. One solution is to modify SM- SC such that bcforc dclivcriiig a prcpaid short message, the SM-SC scnds a charging mcssagc to MS, PSC, or P-SCP (depending on the approach exercised) For decrementing thc prepaid credit of the customer (1, Fig. 12). If tlic SM-SC rcccives a positive response (2, Fig. U ) , thc short message is actually scnt (3, Fig. 12).

he kept unused for a period. This proccss is callcd num6er. aginn. Numbcr aging is a morc scriuus issnc fur prcpaid service than for postpaid service because prepaid customcrs changc sctvicc providcrs morc often than postpaid customers. Furthermore, the aging period is cxpcctcd to be longcr in the United States than in Taiwan because in the United Statcs called-parly-pay billiiig is exercised, while Taiwan uscs calling- party-pay hilling. The length of the nnmbcr aging pcriod is for further study.

Bcsidcs thc tcchnical discussion of prcpaid servicc approaches, we would like lo point oul that packaging prcpaid scrvicc for busincss is vcry important. Recently, prepaid scrvicc was ovcrpromotcd i n Mcxico. Postpaid revenues wcre seriously lost because prcpaid scrvicc was iotroduccd with more favorablc ratcs [3]. Thus, it is important thal servicc providers balancc their prcpaid aiid postpaid marketing and distributinn stratcgics through scgmeiitalioii (e.g., largeting prcpaid scrvicc for high risk customers or packaging lhc scrvicc as ii gift). As we mentioned earlier, service providcrs mtiy

know why customers purchasc prcpaid scsviccs. However, our experience indicatcs that scrvicc providcrs may not know why thc customcrs quit using prepaid service, nor when customers switch to another service provider.

In Taiwan, prepaid service is considered a niclic market, and the stratcgy is to promotc a loyalty program that transfcrs

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prcpaid CusLomers into postpaid c ~ ~ t n m c r ~ . As a final remark, crcdit transfer for mohile prepaid scrvicc is clearly an applica- tion for clcctronic comnicrce, which transfers electronic cash over digital networks in rcal time. The prepaid billing systems arc influencing existing billing systems, whcrc the payment proccssiiig componcnts will need to bc tailorcd for the online nature of the ncw mcdium.

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~~ ~~

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Bioaraahies

t o 1995, he was with the Applied Retearch Area at Bellcore, Morrirtown, New Jersey. In 1995 he was appointed proferror of Department of Com- puter Science and Information Engineering (CSIE), National Chiao Tung Unib versity (NCTU). i n 1 9 9 6 h e war a p p o i n t e d d e p u t y d i r e c t o r of Microelectronics and Information Systems Research Center, NCTU. Since 1997 he has been chair of CSIE, NCTU. His current research interests include design and analysis of personal communications services network, mobile computing, distributed simulation, and performance modeling. He is an associate editor of IEEE Network, an editor of IEEE I-SAC: Wireless Series, an editor of IEEE Personal Communications, an editor of Computer Networks. an area editor of ACM Mobile computing and Communication Review, a columnist for ACM Simulation Digest, and an editor of other journals and publications.

HERMAN CHUNG-HWA RAO (herman@rerearch.attcoml has been a principal member o f technical staff in AT&T Laboratories-Rerearch since 1996. His rerearch interests are in the Internet, distributed file systems, mobile cam- puting. operating systems, computer networks. and software tools. In par- ticular, he has been involved in the design and implementation of a n internet file system (IFS), a programmable proxy server (IPROXY), a GSM SMS gateway (isMS), and a global research and development environment (GRADIENT). He received his 8.5. in mechanical engineering from National Taiwan University in 1980. and his M.S. and Ph.D. i n computer science from the University of Arizona in 1987 and 1991, respectively. From 1991- 1996 he was with AT&T Bell Laboratories, Murray Hill, New Jersey. MING-FENG CHANG (mfchang@crie.nctu.edu.tw) received 6.5. and M.S. degrees in electrical engineering from National Taiwan University in 1982 and 1984. respectively, and a Ph.D. degree i n computer science from the University of Illinois a t Urbana-Champaign in 1991. He ii currently an associate professor io the Department of Computer Science and Information Engineering, Chiao-Tung University, Taiwan, Republic of China. His research interests include personal communications, mobile computing, and VLSl system design.