Service Charging Concepts

What is Service Charging?

Every service offered to a telecom subscriber generally has a charging modality. Subscribers are required to be charged for the services enjoyed.

On a very high level, the scope of charging for services is constrained by the commonalities among the Service Node Capabilities and Charging System Components Capabilities. Subscriber is charged for the telecom service(s) used (e.g. Voice/Video Call, SMS, Data etc.) and on top of that service specific or content specific charges can be applied as well.

How User is Charged for a Service (User Point of View)

Services are offered for all users. User Group can ‘Registered’ to any Subscription-based Service or ‘Unregistered’. Based on this type, Service Charging can be different. User is charged for a service based on its Price Plan – how much to charge from which node for which type of subscribers based on service consumed/offered.

Charging Models

The most common service charging models are

  1. Subscription Based: User pays a fixed subscription fee for a certain period for the service.
  2. Pay Per Use: No fixed commitment or fixed payment. User is charged per use e.g. per SMS, per minutes of usage, per KB of data transferred etc.
  3. Combination: A fixed fee for a certain period and Pay Per Use – both modalities are applied. Sometimes, different price plans are offered for subscribed/registered users and different price plans are used for unregistered users.

Example: Walk Through different Charging Models

Let us look at different service charging models through some examples.

Subscription Based Music JukeBox over IVR

Service Offering

User will dial a short no e.g. 12345 and listen to music.

Charging Model

Service is available for both registered and unregistered subscribers. Following subscription packs are available:

  1. Daily BDT 1. Free 10 Minutes of Usage per day. After the free minutes, BDT 0.10/minute
  2. Weekly BDT 5. Free 50 Minutes of Usage per week. After the free minutes, BDT 0.10/minute
  3. Monthly BDT 15. Free 100 Minutes of Usage per month. After the free minutes, BDT 0.10/minutes

For Unregistered subscribers the charges are BDT 1/minute

Subscription Based Daily News Update over SMS

Service Offering

User will SMS a short code e.g. 2345 and subscribe to Daily News Update. For example, User will send START NEWS to 2345 and will subscribe to the service. In return, every day he will get news updates over SMS.

Charging Model

News will send to subscribed user daily and every MT SMS is charged BDT 2.

Subscription Based WAP Portal

Service Offering

Users subscribe to the WAP portal and get their choice of content.

Charging Model

  1. Users will receive 10 ringtones for free after subscription
  2. Subscription charges for this service are BDT 5/day for 5 Content downloads OR 10 Video Streams
  3. NO charges apply for browsing, downloading or streaming the content.


Pay-As-You-Go IVR News Service

Service Offering

Users dial a short code e.g. 2245 and listen to News Service

Charging Model

  1. BDT 1.25/minute for browsing and listening to News Service

Pay-As-You-Go SMS Push-Pull Cricket Update

Service Offering

Users SMS to a short code e.g. 1234 and get Cricket Update

Charging Model

  1. BDT 2 for every request (MO SMS)



Pay as you go WAP Portal

Service Offering

Users download the content from the portal and pay for every download.

Charging Model

  1. BDT 0.5/ringtone, BDT 0.75/video etc.


Subscription Management

Now let us look at – how Registered User’s subscription is managed and charging is done. Subscription Charging is applied for regular Subscription Based Services. Users can subscribe for a Service for a specific modality. Here Subscription Based Modality means users can subscribe for a Service monthly/fortnightly/weekly/daily and be charged accordingly. Different modalities have different rates.

Subscriber’s service renewal, termination of that service, change to another service is possible based on service charge and service modalities/price plans.


Free Period

Subscriptions can be free for a certain configurable period. Registered User can use the Service for an offered free period and after that period, the User is charged as per the subscribed service charging modality.

Example: Users subscribe to Career Portal and get IVR call/SMS regarding Career Advice up to 3 days.

  1. First 3 days, service is free to the user
  2. After 3 days, user is charged a monthly fee

Different Subscription Status

There are different Subscription Statuses, e.g. User is at Registered, De-registered, In Grace Period, Renew Failed, Downgraded (Switch to lower fee cycle due to failure to charge the amount in the current subscription) status.



A Registered User is renewed to the service after a specific time (depending on which Service Modality the User has subscribed to).

Example: Subscribed User to Voice Chat Service for BDT 15 Monthly and BDT 5 Weekly

  1. For renewal, system attempts to charge Subscribed Users. Monthly Subscribed Users are attempted after 1 month after subscription and Weekly Subscribed Users are attempted 1 week after subscription. User is renewed to the service upon successful charging.


When a Subscriber is registered to any service modality (e.g. monthly) but subscriber account has inadequate balance for monthly subscription, it will automatically shift to weekly subscription (next available modality).

Voice Portal Service has Monthly and Weekly Subscription Plan

  1. Monthly BDT 15, weekly BDT 5. If renewal fails for monthly, the subscription is allowed to fall back to Weekly

When User does not have sufficient balance i.e. less than BDT 15 during renewal, the User is attempted for Weekly modality and upon successful charging of BDT 5, user is renewed for weekly subscription.


Grace Period

To keep subscriber in service, there is an option for Grace Period. If any service modality has Grace Period option for any specific modality (e.g. monthly) and User does not have enough balance while renewing the subscription, User can use the service for the specified Grace Period. During the Grace Period, if user has balance again, s/he will be charged for the amount starting from the renewal due date.

News Service has Weekly Subscription for BDT 3. Weekly Subscription has 5 days Grace Period. During renewal for weekly fees, if User does not have sufficient balance, user can listen to News up to 5 days.

During these 5 days, User’s account is checked whether it has sufficient balance or not and upon having sufficient balance, user is charged and renewed.


Win Back Renewal Failed Subscribers

Subscription Service has a Retry Period Option where De-Registered Subscribers (de-registered due to insufficient balance) can be registered back to the service. This is not available for the Users who de-register by themselves. These RenewalFailed Users are attempted for charging if the Retry Period Option is ON. If charging is successful within this RetryPeriod, this User is updated as Registered. If charging fails , this user is De-registered from RenewalFailed status.

News Service has Retry Period for 2 days. After Grace Period, if this User still does not have sufficient balance, User is moved to Renewal Failed Status. In this status, User cannot enjoy the service anymore. However, the user is retried for 2 days for charging. Within this time, User is again registered to the service if s/he has balance; otherwise, s/he is de-registered from the service.


When charging is not possible for a Registered User after applying downgraded/grace period, the User is de-registered from the service. A User can also de-register by themselves. Then, this user is treated as Unregistered User for the service and can use the service as Unregistered User (if the option is available in the service) or again register to the Service.

How IVR Service is Charged

IVR Services can be charged from MSC (for every minutes of usage) and/or Charging Gateway (Session Based e.g.  Pay-Per-Use and Event Based i.e. registration, subscription renewal etc). Let us have a look how Service Price Plans translate to MSC and Charging Gateway charging configuration.

Example: Voice Portal

A Voice Portal Service to be offered at the following price plan:

  1. Subscription Model
    1. Weekly BDT 5 and BDT 1/minute, Grace Period 5 days for Renewal Fail
    2. Monthly BDT 15 and BDT 1/minute. If renewal fails, fall back to Weekly
  2. Unregistered Users: BDT 2/minute

To browse the Service, Charging Process for any IVR Service can be like this.

Charging Implementation

For a Registered User, MSC will charge the user BDT 1/minute. For Unregistered users, Charging Gateway will charge another BDT 1/minute along with MSC charging.

Renew Application will charge BDT 5 per week for weekly subscribed Users and BDT 15 per month for monthly subscribed Users.

If Renew Application cannot charge monthly fees, a User will be allowed to fall back to weekly modality.

If a User does not have sufficient balance, s/he can enjoy the service up to 5 days (Grace Period). A User will be charged by Renew Application during this period whenever s/he has sufficient balance.

Example: Religious Portal

A Religious portal where a User can listen to different religious contents. The pricing plans are:

  1. Subscription Model
    1. Daily BDT 2 subscription fee and 10 minutes of content listening is free. Afterwards, BDT 0.10/minute.
    2. Grace Period 10 days.
  2. Unregistered subscribers are not allowed to browse the contents

Charging Implementation

Browsing Charge cannot be implemented at MSC because of the free minutes. MSC Charging is applied to all subscribers as a flat charging. But, in this service we have free minutes and after that free minutes, a consumption User is charged per minutes of use. And, these free minutes can be consumed over multiple calls as well.  Charging is configured in Charging Gateway (CGW) only and MSC Charging is set as Zero (0). Charging Gateway will manage the free minutes and charging after the free minutes.

Renew Application picks up this registered User and attempts to charge BDT 2 subscription fee on a daily basis. If a User does not have sufficient balance, s/he can use this service up to 10 days (Grace Period) and during this time, the User will be charged for pending subscription fees whenever balance is available in the account. After 10 days, User is de-registered if user still does not have sufficient balance.


How Video Call Service is Charged

Video Call Service Charging is done in same way as Voice Call.


How SMS Service is Charged

SMS Service can be of two types:

  • Push Pull Service
  • Subscription Services

Push Pull Service

Users SMS to a short code e.g. 1234 and get Cricket Update. BDT 2 is charged for every request i.e. MO SMS.

Subscription Services

Users subscribe to SMS Service e.g. getting breaking news; daily BDT 2 is charged for this service.

There can be two options

  • MT Charging

SMS is sent to User’s number and User is charged based on MT number. In this case, if multiple breaking news is sent in a day, user will be charged multiple times.

  • CGW Subscription Charging and MT SMSs free

SMS is sent to User’s number and CGW Subscription charging is applied for user. MT SMSs are free here.

How Data Service is Charged

Unlike voice call or video call, most multimedia services are charged by data volume usage usually with Kilobyte (KB) as a charging unit. Users get contents from WAP Portal or Web Portal.

Data charging can be made free or it can be regular volume based in which case per KB BDT XXX standard rate will be applied in addition to content price.

User can download any content and be charged as per Pay-Per-Use model. Also s/he can subscribe the service.

This subscription charging is done through CGW. Also, per content download charging is done through CGW.

When a User click on any content, CGW first charges the User and then sends the content to that User.


Further Readings

  1. Charging Gateway
  2. Content, Subscription and Differential Charging
  3. Prepaid Charging Integration
  4. Postpaid Charging Integration
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