Billing Q&A with Jim O'Neill

Q—We are constantly hearing about billing for content. Are there many practical applications available for wireless Internet users yet?



A—Yes, but many of these applications can be found mostly in Europe, where wireless technology in general has grown faster than in North America. Throughout Europe, the use of location-tracking technology has been especially notable. Here are some examples:

• In the United Kingdom, cell phones can be used to find the nearest restaurant or pub. A French company called Webraska has developed a service called Pub Finder that provides a list of the nearest watering holes.

• In Scandinavian and some Eastern European countries, teenagers use wireless messaging to find out where their friends are moment to moment. One location-based tag game is available in parts of Scandinavia and is soon to be released in Ireland.

• In Estonia, the government required that wireless companies develop advanced location tracking. To turn it into a profitable venture, the companies invented a game of tag so users could guess where their friends are to win the game.

• A French company is testing a dating service that will signal when available singles are nearby.

• A similar directory technology is available in Germany that helps people map their evenings out by giving directions to the nearest clubs, cinemas, gas stations and cash machines.



Location-based technology in the United States was developed as a result of the U.S. government’s E911 ruling, which requires carriers to make sure emergency services can pinpoint the location of distressed callers on cell phones to within 300 yards. The system is slowly being put into place—after delays, most U.S. wireless carriers promise it for this summer.

While text messaging has been available in the United States for some time, our billing systems have not been fully prepared to deal with these new services, and many carriers either give them away or charge a flat monthly fee. As profits continue to fall, that model is expected to change in favor of usage measurement or value-based transactional charges. And that is the real challenge for many carriers.

Another challenge is the recent announcements by most carriers that they will begin to allow text messaging across systems—that is, allowing messages to be sent to and from their competitors’ systems. Europe started that approach late last year, and many operators are grumbling that there is no revenue for them in handling messages coming from another carrier. This is enough of a problem that many European operators are considering charging their customers for delivery of messages from another network—an interesting concept in an area of the world where wireless customers do not pay for incoming voice messages.

Q—I’ve been seeing the term mobile virtual network operator, or MVNO. Can you explain what it means and how it affects billing?



A—The simple explanation is that an MVNO is a reseller of services, but in the evolving 3G world it seems to be more than that. In Europe resellers are also referred to as service providers. One of the first MVNOs to launch in this environment is Virgin—yes, the airline and record company.

Like traditional resellers, MVNOs offer telecom services without owning a network or even having a network license. They rely fully on other mobile operators for all network services and most other back-office support systems. The key exception is rating and billing of their subscribers. Controlling these latter functions is essential to their success, as that is how they can set themselves apart from the actual network operator.

Another unique feature of MVNOs emerging in Europe and Asia is that they position themselves to offer services from more than one network operator, which gives them an opportunity to have more than one distribution channel as well. Those launching in North America are following a similar model.

To be successful, they not only need their own brand, but they also have to differentiate themselves by offering value-added services. That is where interfacing with several network operators may come in. That, of course, leads to a requirement for convergent billing and very robust customer care.

It is also interesting to note that the cost of deploying a full 3G network is extraordinarily expensive, and some network license holders in Europe are petitioning for permission to share physical networks with their competitors. Should this come to pass, it may result in every operator becoming some form of an MVNO.



Correction: The question in the March 2002 “Billing Q&A” column does not correspond to the answer. The correct question is as follows: Q – We hear so much about new wireless services as new technologies are introduced. How is that going to affect the consumer’s perception of telecommunications bills? Also, are there any standards for billing that can be applied to improve them?