Usage based billing is a billing method where the subscriber pays the fee determined by the amount of traffic or usage of services, as opposed to a flat fee. In this type of billing, the charges are generated at a periodic interval based on the service usage of the subscriber.
In usage based billing model, the real time billing system relates the billable usage events to the subscriber account balance according to the pricing structure. Whenever the billing system receives these real-time billing events, the rating engine rates the events and immediately posts charges to the subscriber account.
The usage based billing method involves the following processes to rate the billable usage events:
Generating the billable usage events in the network element. Based on such events, the usage duration is calculated.
Collecting the generated usage events from network element and providing such usage data to the billing system for further processing.
Mapping the CDRs with the subscriber package in the system to calculate charges. This process is called as Usage Guiding.
Calculating the number of ratable units based on the predefined rate plans. This process is called as Usage Rating. Such ratable units are considered while calculating charges.
Preparing billable units for presentment in order to post charges to the subscriber account.
Generating charges in the system for the billable usage events before invoicing.
Example: Bandwidth used for a particular period.