The Internet darlings purported to be on the verge of stealing the life bread of telcos through their disruptive and innovative business models have proven so far to be mere pretenders to the throne. And surprisingly, the most significant differentiator — besides control of the access network — just may be the telcos’ billing systems.
“We keep thinking about all these technology differences between telcos and these Internet companies, but we never think of billing as a technological differentiator. But it is the key differentiator,” said Dan Baker, research director of Dittberner’s OSS/BSS KnowledgeBase.
In the failure so far of advanced services to arrive at the next-gen party, service providers continue to grow profitable business through the marketing, bundling, pricing prowess of their billing systems — no matter their historic inflexibility and bulk.
Just look at Carlos Slim of Telefonos de Mexico and América Móvil fame — and now proud owner of 6.4 percent of the New York Times. Baker said Slim put himself on the path to becoming the second richest man in the world not through selling advanced services but with prepaid billing.
“Billing these days is more akin to marketing and advertising than accounting,” Baker said, and gave billing its new definition: Systems that enable financial transactions and personalized conversations (via paper, computers and handsets) with customers about their services and charges.
The personal conversations are key. “The last several years people have been talking about IMS with the theme that what will save everyone in wireless is all the fancy new services. But they haven’t delivered,” Baker said. “Nothing fancy has evolved and the realization has settled in that having a broad array of network services is not the only ticket to growth anymore. Today, it doesn’t matter how many services you have; it’s how you package and promote them that matters. And that’s where billing comes in.”
In his latest billing report, The Telecom Billing & Charging Market, Baker said predictions about Microsoft, Yahoo!, Disney, Viacom and Google capturing the lion’s share of telecom industry revenue because the telcos were just dumb pipe providers hasn’t proven true. Particularly in emerging markets, telecom service providers are the fastest-growing companies.
Why? Baker said companies who use their billing systems as more than accounting and invoicing tools are proving to be the winners. “The job of invoicing customers is not going to go away, but service providers no longer want to pay a premium for good accounting; that’s a given,” he said. “Everyone knows you need a car for transportation, but you can’t sell a car on pure transportation.”
So what are billing providers doing to keep their edge in this edgy market? Baker said they have to embrace their strategic, business-generating role. It’s all about merchandising, marketing and convergence. If so, they can be looking at a worldwide telecom billing and charging market that will grow from the $6 billion it reached in 2007 to $7.6 billion by 2012.
