As 5G network deployments continue to ramp up, communications service providers (CSPs) continue to look for new ways to extract value from their core networks and radio access networks (RANs). A vital element of this exercise will be how to achieve further service differentiation from previous mobile generations such as 4G.
While this process will be gradual, the 5G core (5GC), which adopts a services-based architecture (SBA) that supports application programming interface (API) exposure, will drive the next wave of mobile service innovation. Two key components critical to the process of monetizing 5G innovative services are policy control and charging. While both have always been important in mobile networks, they will play an even greater role in 5G due to the additional policy and charging requirements of these complex 5G services.
This white paper documents the foundational role that policy control and charging play in the delivery and monetization of complex high value 5G use cases.
THE EVOLUTION OF POLICY CONTROL AND CHARGING
Since 5G standards define a new 5GC network based on cloud native architecture, functions such as policy control and charging that reside in the core differ significantly from 4G networks. In 4G core networks, policy and charging capabilities are supported by the policy and charging rules function (PCRF), application function (AF), online charging system (OCS), and offline charging system (OFCS), which utilize Diameter interfaces.
In contrast, in the 5GC realm, policy and charging are supported by the policy control function (PCF), AF, and charging function (CHF). These functions utilize HTTP/2 protocolbased control plane interfaces referred to as service-based interfaces (SBIs). Figure 1 illustrates how these functions are mapped between 4G and 5G networks.
4G PCRF vs. 5G PCF
To meet these rigid service demands, the 5G PCF utilizes an HTTP/2-based interface between the PCF and network exposure function (NEF), network data and analytics function (NWDAF), and CHF. Like the CHF, the AF and the HTTP/s interfaces also support Diameterbased interfaces to simplify 4G service delivery.
This shift to HTTP/2 is significant since it aligns with the cloud domain and enables 5G services to be run not only in a private CSP cloud but also in a public cloud. In addition, the new protocol is designed to enable the exposure of APIs via the NEF-a new capability not supported in the 4G world.
There are two considerations here. The first is the ability to support and enforce strict
policy-based quality of service (QoS) tolerances for these API-based services. Another
important difference between PCF and PCRF is the fact that PCF administers policies for 5GC
and radio network (e.g., gNB) functions, which is vital to support policies for network slices.
In contrast, the PCRF supports policy enforcement for core network nodes only.
An additional consideration relates to the software origins of the API themselves. In the 5G
realm, there is also a much greater focus on the integration of third-party APIs vital to
fostering the adoption of an ecosystem-based service delivery model that is foundational to
the successful monetization of 5G services. Since these APIs may also run in a slice-based
environment to meet strict latency budgets, a shift from Diameter is also warranted.
4G OCS vs. 5G CHF
The evolution to a cloud native architecture is equally profound from a charging perspective.
As shown below in Figure 2, the new 5G cloud native enabled converged charging system
(CCS) is defined in standards that include the CHF to support charging of complex 5G
services. They also include a rating function (RF) to manage the rating of stateless
microservices, an account and balance management function (ABMF) to maintain subscriber
account balances, and a charging gateway function (CGF) to manage the format for billing
record generation in a virtualized environment.
The 5G CCS introduces new control plane interfaces swapping out Diameter protocol-based
interfaces for HTTP/2-based SBI.
Like the policy function, these converged charging functions will accelerate the 5G services
monetization curve. They can support existing 4G services with the performance and
flexibility capabilities to support advanced cloud-based 5G uses cases when working in
tandem with the PCF.
5G POLICY AND CHARGING SYSTEM DESIGN ATTRIBUTES
To achieve the promise of the technology innovation documented in the previous section,
CSPs’ 5G policy and execution strategies and the policy and charging systems they deploy
must support the following foundational design attributes:
The ability of an architecture to scale has always represented a vital network metric.
However, in many respects, 5G takes the concept of scalability to an entirely new level.
Over the next 8–10 years, 5G technology and Internet of Things (IoT) devices will be
embedded in autonomous vehicles and industrial sites to support both public and private
A related consideration here is not simply the number of devices and nodes that must be
supported, but also the exponential increase in the amount of performance-related data
these devices will generate. As a result, policy and converged charging systems will need to
support massive scale requirements to enable a broad range of high-value use cases, as
documented in the next section of this white paper.
One approach to achieve massive scale is to support 5G service invocation anywhere in the
network: at the edge and in both private and public clouds.
To support this model, programmability, the ability to utilize software to tailor service
performance based on where service execution takes place is critical. This requirement, in
turn, requires that policy and charging systems become more programmable as well to
respond in real time to this changing services landscape.
Although standards have always been important for ensuring servicer provider interworking,
since policy and charging must not be supported in a multicloud environment, the overall
rigor of standardization becomes even more important to ensure seamless interworking. In
this respect, the development and support of comprehensive standards are vital elements in
monetizing programmability in specific use cases.
The final interrelated attribute is automation. While 5G network design and standards do not
specifically mandate the support of automated policy control and charging, as 5G services
scale, Heavy Reading believes transitioning to automated systems is inevitable.
The key driver in this transition is related to the evolution of network design principles. 2G,
3G, and to some extent 4G mobile networks are designed to conform to human
performance tolerances. The principle here is that network performance latency budgets are
based on human tolerances.
In the 2G world, this resulted defining the optimal delay for applying ringing after dialing.
This was an important step since applying ringing too early or too late would cause voice
subscribers to abandon calls, resulting in additional call attempts and ultimately degraded
customer quality metrics.
However, in the 5G world, many services such as autonomous vehicles are machine-driven
and not subject to human performance tolerance limitations. In this new world order,
automation is critical to meet higher machine-to-machine (M2M) performance expectations.
Stated differently, to be successful, the 5G era policy and charging systems must be capable
of evolving beyond the human threshold to support M2M performance thresholds.
5G MONETIZATION USE CASES
As documented, 5G service invocation will have major policy and charging implications. This
section documents the implications on a more granular level by examining the enhanced
role that policy control and charging play in the following 5G use cases:
- Everything as a service (XaaS) – mobile virtual network operator (MVNO)
- 5G slice-based enterprise use case
- 5G private network – IoT manufacturing integration
Everything as a service (XaaS) – MVNO
One of the distinct advantages of migrating services to the cloud is that it enables CSPs to
gain access to new business opportunities. One example is the ability to sell XaaS to
This is important because XaaS leverages scale and zero-touch automation, enabling CSPs
to deliver advanced, scalable services to consumers, enterprise customers, or even MNVOs
that are hosted on the CSP network. XaaS is gaining market momentum since previous
mobile network generations did not have the capability and network performance speeds,
programmability, and openness to support the foundational requirements of XaaS.
The use case illustrated in Figure 3 below describes a CSP that supports the service
delivery and billing for a 5G MNVO customer. In this case, the MVNO customers are
provided access to a cloud-based self-service portal where they can provision and activate
new service capabilities in real time.
This has all the policy and charging requirements of normal 5G customers (e.g., data quota
management). It also includes the additional functions associated with monitoring and
recording transactions so the CSP can bill the MNVO for managing subscriber additions and
This model empowers the MVNO to streamline service provisioning while providing the end
user with an enhanced user experience by granting these subscribers a greater measure of
control and “feel” for their user experience. The above use case also illustrates how CSPs
are evolving to the commercialization of the cloud through the adoption of new business
One example of a new model is the emergence of the business-to-business-to-X (B2B2x).
Effectively, this approach extends the traditional business-to-business (B2B) model by
allowing the second “B” in the value chain the opportunity to take the service it has
purchased and add value to the end user.
In this use case, the CSP sells network access to the MVNO (the second “B”), which in turn
utilizes the self-service portal to deliver the end-user customer (the “X”) a more flexible and
richer user experience.
For XaaS to be monetizable in any model (B2B, B2B2x, or business-to-consumer [B2C]),
there are unique policy and charging platform requirements.
As noted, scalability is a fundamental attribute of XaaS that enables CSPs to drive new
revenue streams while at the same time lowering the total cost of ownership (TCO) to
enhance profitability. To be successful here, CSPs’ 5G policy and charging systems must be
able to manage the increased workloads associated with XaaS.
One of the main benefits of XaaS is that it represents a blank template from a service
delivery perspective. As 5G services evolve, CSPs will be able to offer new XaaS-based
services aligned with industry adoption trends. CSPs have this flexibility since XaaS is fully
programmable and can therefore be tailored to meet man or machine service needs without
extensive programming requirements.
This means that policy and charging systems must also be fully programmable. They must
have the flexibility to support any charging model, including event-based charging and
quota-based charging, based on XaaS market requirements.
Effectively, this means programmable policy and charging systems will evolve to support
charging as a service (ChaaS) for any service, including nontraditional CSP services. CSPs
will have the opportunity to enter new market segments as a trusted ecosystem partner.
One of the key standardization considerations for XaaS services is API-related. As
documented, 5G’s API exposure model is highly complementary to XaaS service delivery.
In this model, APIs must be standardized to enable CSPs to seamlessly offer any service,
whether the XaaS service runs in the telco cloud or public cloud. Consequently, policy and
charging systems must be fully multi-standard compliant to ensure they seamlessly apply
policy and charge for API-related events.
The addition of the self-service portal in this use case delivers considerable value, but it also
drives additional policy and charging requirements. This is because the portal can be viewed
as representing a flexible and extensible library of services. With this library, each service
will have a unique set of policy rules and charging requirements. To manage this policy,
systems must support automated rule sets that can turn up or tear down specific services
based on network performance or even security demands.
Moreover, since this portal will be constantly evolving to support new services, automation
will be a valuable tool in allowing policy and charging systems to adjust to new service
requirements in real time.
5G slice-based enterprise use case
Enterprises are expected to be heavy users of slice-based services. This is because slicing
can be tailored to support the unique performance and scale demands of individual
This use case is based on a medium-sized financial consulting enterprise that relies on
network slicing to enable the processing and billing of financial analyst engagements with
As with the other use cases presented in this white paper, monetization success will hinge
on policy and charging platform design strategies that embody the following design
In this use case, scalability is critical due to end-user customer expectations of unfettered
access to financial analysts and rapid transaction execution.
Policy control and charging enforcement are critical for administering enterprise services. In
this scenario, programmable systems are crucial for ensuring specific enterprise users in
specific locations for specific services are provided the slice-based QoS they have paid for.
Meanwhile, other enterprise customers who are not allowed access based on their
subscriber profile will be blocked or will have their sessions terminated.
There is another wrinkle in the enterprise model that necessitates CSPs deploy
programmable policies and charging systems. For example, in this use case, the financial
organization in a remote location needs to offer the same level of support for their financial analysts as their major enterprise offices. Since the CSP may not have sufficient radio
resources in this location, it may partner with a “neutral host” third-party company that has
radio or transport resources in this resource region that the CSP can integrate into its
enterprise slicing service. While the enterprise experiences a single look and feel from a
single CSP, this same CSP must be able to pull in RAN and analytics data into policy and
charging systems to make the slice service truly seamless.
The value of network slicing in this use case is that it enables enterprise customers to have
the feel of a bespoke virtual network with guaranteed performance tolerances on a single
This is a game-changer for enterprises since this level of performance could not be
guaranteed on previous-generation mobile networks. For this capability to be delivered, only
open standardized interfaces and protocols can be supported to meet these end-to-end
performance and online charging demands.
Enterprises such as financial entities that manage critical big data will also fuel the adoption
of artificial intelligence (AI)-based applications to lower costs and process real time
transactions. This AI adoption curve represents another factor driving policy and charging
systems to integrate automation and algorithm policy capabilities.
5G private network – IoT manufacturing integration
This final use case falls into the beyond human threshold realm and illustrates a 5G private
network deployment for a smart manufacturer that relies on IoT and robotic devices in the
manufacturing, surveillance, and quality control processes. This deployment exemplifies the
Industry 5.0 model in which manufacturing shifts to an intelligent data-driven operational
model that leverages the power of IoT and robotics.
This use case also possesses unique policy and charging platform attributes that will be
compulsory for effective service monetization.
Since this factory is heavily automated with devices that are supported by onsite policy and
charging, scale is even a consideration in this use case. This ability to support local onsite
processing is valuable because it foregoes the requirement to backhaul transactions to the
CSP’s centralized charging function.
Private networks are not new. However, there has been a real increase in the momentum of
private networks, in large part due to the rollout of 5G networks. Essentially, 5G now
provides the performance metrics critical to overcoming the previous performance
limitations of earlier private network deployments.
A second and arguably more important factor in private network momentum is the
programmable aspect of private networks. Since 5G implements microservices that can be
implemented onsite, it is possible to reuse and reprogram services in machine time as
necessary. To support this, policy and charging systems must also be highly programmable
to avoid the creation of service-impacting billing and policy enforcement bottlenecks.
The ability of policy and charging systems to support open standardized interfaces and
message format in this use case is also vital. Since this private network supports network
failover, any policy and charging capabilities deployed in the factory must be fully nonproprietary and fully configurable with the CSP’s network capabilities to ensure seamless
Like the slicing use case, this private network will lean heavily on automated policy and
charging tools. In this use case, automation is critical because of the number and speed of
the machine devices that will have to be managed.
CSPs are now undertaking a major 5G-fueled network transformation that will drive them to
reevaluate how they deliver services and charge for them.
One of the hallmarks of this journey is a focus on new service delivery models and use
cases that will exceed human performance thresholds. And as captured in this white paper,
policy and charging systems will need to respond to this new complex world order with a
greater focus on scalable, programmable, standards-based, and automated solutions that
can manage the stringent requirements of both 4G and 5G networks.