technologies, HDR is the most advantageous alterna- Roaming Charges. Figure 3 shows the case of a call tive for supporting data traffic, as it has a two-to three- placed from a fixed telephone to a user of a mobile car- times cost advantage over cdma2000 IX and rier, who has moved to the operating area of mobile car- WCDMA. This advantage of HDR is due to its opti- rier located in a differ rent countr This situation is mization for data traffic known as roaming and imposes relatively high charges to the receiving party. As shown in the figure,an Charging Issues RPP/CPP combination is in effect in roaming situa- Mobility Charges. In most cases the price for placing a tions. This is because it would be unfair to charge the call through a mobile carrier is significantly higher than caller for usage of the foreign mobile network since he that through a fixed telephone carrier. This is because or she has no way of knowing the called party is roam- mobile carriers have paid a significant amount of ing to a foreign network. Thus, the cost of the call for money to acquire spectrum licenses and frequently the calling party is just the sum of the cost of using the fixed network and the cost money installing new infra of using the home mobile structures. The actual price for a mobile telephone call charge for the calling party is not constant but rather nds on factors includ. ing the policy of the carrier, The extra cost of using the the time at which the call is 44-+l 一图 foreign mobile network is placed, or the users harged to the called party. tract. However, despite the Figure 3. Charges for This charge is usually much higher than the amount of fact that mobile calls cost placed to a roaming user. money is charged to customers of the foreign network, more than fixed ones. these a fact that may make roaming an expensive service prices generally follow a declining rate due to the com- Billing: Contracts vs. Pre-paid Time. Once the petition between carriers and the concerted effort to charges for utilizing network resources are summed up, make mobile telephony a direct competitor of the tradi- mobile carriers must bill their customers. There exist Another interesting issue regarding the charges for billing. A contract is essentially leasing of a connection the case of a user who places a call that ends at the net- to the network of the carrier. Users that sign such con- work of a mobile carrier. In this situation, there are two tracts usually get the mobile handset for free. The approaches mobile operators of course eventually get back the cost of the handset, since the contract forces users to pay a Calling party Pays(CPP). This approach, shown in monthly rental charge for their connection irrespective 1, is mostly used in European countries. The of the fact that they might not use the connection at all ys for usage of both the fixed and the Of course the user is also charged for both calls networks. Thus, calling a mobile phone Contracts have the disadvantage of limiting the user from a fixed one is more expensive than a call placed to a specific carrier for a certain amount of time. Thus, between two fixed telephones. In order to provide another approach appeared; that of pre-paid time. This fairness to the callers, mobile numbers are preceded approach, first applied by Telecom portugal (TMn)in by special codes, which let the caller know that the 1995, requires users pay in advance for both their hand- charge for such a call will be higher than that for a sets and the calls they make. Handsets can be bought call to a fixed telephone. from electronics stores and usually indude a certain Receiving(called) Party Pays(RPP). This approach, amount of credits, which translate into speaking time shown in Figure 2, is mostly used in the U.S. and (and obviously credits for using other network services, Canada. The called party pays for usage of the such as SMS). Once the user of the phone has exhausted mobile network. Thus, calling a mobile phone from all the credits, the phone can be recharged via a simple a fixed phone costs the calling party the same procedure. The pre-paid approach has found wide accep amount of money as when the call is placed between tance in Europe and developing countries 1 two fixed telephones. This approach is driven by the Charging Methods. Here, we describe some meth- fact that in the U.S. consumers are accustomed to ods for charging in mobile networks [2, 3, 7]. Most of the situation in which local calls are free, thus pay- these methods have already been proposed for the ing for a call to a mobile phone in the same area Internet, but are equally applicable to mobile networks would seem incongruou Metered Charging. The model charges the subscriber COMMUNICATIONS OF THE ACM April 2004/Vol 47. No 4 85COMMUNICATIONS OF THE ACM April 2004/Vol. 47, No. 4 85 technologies, HDR is the most advantageous alterna￾tive for supporting data traffic, as it has a two- to three￾times cost advantage over cdma2000 1X and WCDMA. This advantage of HDR is due to its opti￾mization for data traffic. Charging Issues Mobility Charges. In most cases the price for placing a call through a mobile carrier is significantly higher than that through a fixed telephone carrier. This is because mobile carriers have paid a significant amount of money to acquire spectrum licenses and frequently spend large amounts of money installing new infra￾structures. The actual price for a mobile telephone call is not constant but rather depends on factors includ￾ing the policy of the carrier, the time at which the call is placed, or the user’s con￾tract. However, despite the fact that mobile calls cost more than fixed ones, these prices generally follow a declining rate due to the com￾petition between carriers and the concerted effort to make mobile telephony a direct competitor of the tradi￾tional fixed telephone carrier. Another interesting issue regarding the charges for the case of a user who places a call that ends at the net￾work of a mobile carrier. In this situation, there are two approaches: • Calling Party Pays (CPP). This approach, shown in Figure 1, is mostly used in European countries. The caller pays for usage of both the fixed and the mobile networks. Thus, calling a mobile phone from a fixed one is more expensive than a call placed between two fixed telephones. In order to provide fairness to the callers, mobile numbers are preceded by special codes, which let the caller know that the charge for such a call will be higher than that for a call to a fixed telephone. • Receiving (called) Party Pays (RPP). This approach, shown in Figure 2, is mostly used in the U.S. and Canada. The called party pays for usage of the mobile network. Thus, calling a mobile phone from a fixed phone costs the calling party the same amount of money as when the call is placed between two fixed telephones. This approach is driven by the fact that in the U.S. consumers are accustomed to the situation in which local calls are free, thus pay￾ing for a call to a mobile phone in the same area would seem incongruous. Roaming Charges. Figure 3 shows the case of a call placed from a fixed telephone to a user of a mobile car￾rier, who has moved to the operating area of mobile car￾rier located in a different country. This situation is known as roaming and imposes relatively high charges to the receiving party. As shown in the figure, an RPP/CPP combination is in effect in roaming situa￾tions. This is because it would be unfair to charge the caller for usage of the foreign mobile network since he or she has no way of knowing the called party is roam￾ing to a foreign network. Thus, the cost of the call for the calling party is just the sum of the cost of using the fixed network and the cost of using the home mobile network, meaning the charge for the calling party is what it would be if the called party wasn’t roaming. The extra cost of using the foreign mobile network is charged to the called party. This charge is usually much higher than the amount of money is charged to customers of the foreign network, a fact that may make roaming an expensive service. Billing: Contracts vs. Pre-paid Time. Once the charges for utilizing network resources are summed up, mobile carriers must bill their customers. There exist two main approaches here: contracts and pre-paid billing. A contract is essentially leasing of a connection to the network of the carrier. Users that sign such con￾tracts usually get the mobile handset for free. The mobile operators of course eventually get back the cost of the handset, since the contract forces users to pay a monthly rental charge for their connection irrespective of the fact that they might not use the connection at all. Of course the user is also charged for both calls. Contracts have the disadvantage of limiting the user to a specific carrier for a certain amount of time. Thus, another approach appeared; that of “pre-paid” time. This approach, first applied by Telecom Portugal (TMN) in 1995, requires users pay in advance for both their hand￾sets and the calls they make. Handsets can be bought from electronics stores and usually include a certain amount of credits, which translate into speaking time (and obviously credits for using other network services, such as SMS). Once the user of the phone has exhausted all the credits, the phone can be recharged via a simple procedure. The pre-paid approach has found wide accep￾tance in Europe and developing countries [1]. Charging Methods. Here, we describe some meth￾ods for charging in mobile networks [2, 3, 7]. Most of these methods have already been proposed for the Internet, but are equally applicable to mobile networks. Metered Charging. The model charges the subscriber -4 +1 +3 +3 -3 User Home Mobile User Fixed network Home Mobile network Foreign Mobile network Figure 3. Charges for a call placed to a roaming user