Subscription Knowledge Series #7 – Getting Started on the 5G Monetization Journey
In this blog post, we want to have a look at 5G, and what capabilities are required to get started on the 5G monetization journey. We will go over the following questions:
⦁ What is 5G and why is it different?
⦁ what will 5G business models look like?
⦁ what are the key capabilities required to get started on the 5G monetization journey
⦁ how can SAP Billing and Revenue Innovation Management help you on the journey?
So let’s start by taking a look at what is 5G and why is it different?
Following high growth from the first through to the third generation of services, growth has slowed in 4G due to disruption by platform and over the top, or OTT providers who bypass telcos to provide their services directly to consumers. As a result, many telcos have not achieved the return on investment that they had envisaged.
5G offers the opportunity to get back to creating and capturing value by collaborating with partners to provide industry solution via three types of use cases:
1. extreme Mobile Broadband (eMBB)
2. massive Machine Type Communications (mMTC)
3. Ultra-Reliable Low Latency Communications (URLLC)
This brings endless possibilities of products and services across industries, for example:
⦁ travel and transportation
⦁ Smart cities
⦁ Supply chain and manufacturing
⦁ work and play
To offer these industry solutions, new business models are required. These business models are taking shape already with the current 4G technology.
You may already be familiar with the B2X business model where telcos provide services directly to consumers and businesses, with some partners involved in providing devices, content and apps.
We also have the agent business model where telcos act as a payment providers, for example via mobile wallets or direct carrier billing.
We also have wholesale business models where telcos provide wholesale connectivity to other telcos and to mobile virtual network operators.
All of these business are converging to the B2B2X business model. With 5G, the B2B2X business model is likely to become more prominent with industry solutions where telcos will provide network connectivity in the form of network slices, to industry solution providers, who will in turn provide services to consumers.
Telcos will have the additional opportunity to provide Billing on Behalf of the industry solution providers, to the end consumers, and in doing turn the billing cost centre into a profit centre.
So the next question is what are the capabilities required to enable the B2B2X business model? Lets take a look.
There are four key capabilities required for B2B2X:
⦁ the first is enterprise billing as this is the means to manage revenue from services delivered to industry solution providers. This includes billing for solutions and outcomes, managing master agreements and customer hierarchies. Tiered pricing and discounts and consolidated invoicing across customer hierarchies are essential features.
⦁ the second capability is revenue sharing. Schemes for partner revenue sharing and settlement are essential to support ecosystems of companies joining forces to deliver services.
⦁ the third capability is billing and financial convergence. Coexistence with legacy services and systems is key to ensuring both feasibility and viability. Delivering new capabilities with a short lead time and avoiding large scale overhaul of billing systems can mean the difference between success and failure. You may decide to converge on a single subledger to manage both receivables and payables, along with payments and collections. Or you may go a step further to provide invoicing convergence, and allow the end customer the option to receive a single bill with all charges consolidated.
⦁ the final capability is mediation which is the foundation for the other 3 capabilities. Mediation means processing massive volumes of data from various sources to derive business meaning from the data. Data can come from the core, from the edge or from partner applications and APIs. Also this must all come together in real-time.
The SAP Billing and Revenue Innovation Management solution enables all the capabilities required to get started on the 5G monetization journey.
It covers the end to end order to cash process, and includes the following modules:
⦁ Subscription Order Management to manage subscriptions and contracts
⦁ SAP Convergent Mediation by DigitalRoute to collect usage
⦁ SAP Convergent Charging to price and charge for usage
⦁ SAP Convergent Invoicing to bill and settle with customers and partners
⦁ SAP Customer Financial Management to handle payments, manage credit and collections, and provide financial customer care.
Benchmarking data from case studies have shown that SAP customers have realized a lot of value by implementing the solution. Here you can see some examples of tangible benefits reported by customers.
SAP Billing and Revenue Innovation Management boasts a high level of agility and flexibility to enable the complex business models required in future with 5G, and it is already used by some of the worlds largest telcos and OTT providers.
With SAP Billing and Revenue Innovation Management, you can prepare to address the principal 5G use cases associated with industry solutions. The solution helps you manage enterprise billing, revenue sharing, financial convergence, and data mediation with ease. Even if you have not yet started on your journey, SAP Billing and Revenue Innovation Management can help you work with your current 4G technology to position yourself for entry into the promising new era of 5G.
For further details, please also see the SAP Thought Leadership Paper The 5G Monetization Journey: Developing New Billing and Revenue Capabilities.
If you want to learn more about SAP Billing and Revenue Innovation Management, visit us at https://www.sap.com/brim.
This blog is part of a blogs series:
#1 Optimize Your Business and Easily Manage One Million Bills a Month
#2 Start Small, Plan Big: How to Embrace Successfully the World of Subscriptions
#3 Transform your business for Revenue Growth amid Covid19 crisis
#4 Our First Virtual SAP BRIM Conference – Some Highlights
#5 – Are You Streaming Music or still Buying Records?