When it comes to what consumers want, the rise of OTT content and third-party apps as well as an exponential demand for real-time access to, well, everything, is driving significant change and investment across the software landscape. Perhaps that is nowhere more true than in the billing realm, as consumer behavior becomes increasingly transactional, driving a move to real-time convergent charging that integrates policy management and is flexible enough to be changed on a whim. It’s the era of mobile broadband, of fiber to the home, of smart connected devices, of Facebook, mobile browsers, arrays of widgets, mobile wallets, VOD and OTA content purchases or rentals…it is, in short, the age of now. And 2011 will see this reality change the conversation on billing rather significantly.
Underpinned by the evolution to 4G wireless and LTE — commercial deployments are expected to begin in earnest this year — carriers are looking at brave new business models and data packages that might actually allow them to avoid the 3G gap between revenue and traffic that the iPhone and its ilk have visited upon unsuspecting carriers like AT&T Inc. for three years now.
“The biggest talking point is around 4G and LTE rollouts," said Tony Jackson, director of telco market strategy at Convergys Corp. “It’s something they are almost all investing in. Most people are either starting spending money or are committed to spending money at some stage."
Because 4G from a billing perspective is about packets of data, it’s tempting to see 4G as just a bigger 3G, but “the industry is sort of missing the point there," said Jackson. “Carriers need to put in place the correct business models to make sure they make good revenue from 4G. And the issue here is that they need to accept that they don’t know what those are going to be yet. So they’ve got to have the ability to introduce new models and then later remove them from their portfolio — they need to be flexible in how they approach this."
Transactional Models
Moving off of unlimited data plans is a necessity in order to monetize new networks that can support and therefore will carry exponentially growing amounts of data.
“There are different attitudes and ways of thinking about it," said Guy Hilton, Amdocs’ product marketing director for the revenue management division. “AT&T and Verizon are contemplating tiered plans, offering a certain number of gigabytes or speeds or both: get 5 gigabytes at a half-meg per second, say."
Potential better business models instead involve value-based pricing. “The end subscriber doesn’t really understand the meaning of a gigabyte. No one knows how many megabytes they’re spending on Facebook updating — it’s not intuitive at all."
Instead, offering, say, an HD movie package that automatically comes with the right bandwidth and data package to deliver the content will become more mainstream. Again, real-time charging and policy management are critical to making those packages fly.
