Flexible Billing the Way of the Future

Normally I begin my post with a personal story but today I’d like to take an opportunity to highlight a company I’ve had the pleasure of working with at Amdocs. We’re proud to recognize that T-Mobile USA ranked first out of the four main US carriers for its Billing Operations (accuracy and clarity) in the first Zagat Wireless Carriers Survey, whose results were published earlier this year.

Neither T-Mobile , nor indeed any other service provider can afford to hesitate to move forward when it comes to billing. There is a compelling need for service providers to shift from fixed payment models to flexible ones, adding value to the customer experience by providing flexibility and control into price plans and payment options, as T-Mobile are indeed doing with its FlexPay plans.

Today’s flat-rate usage plans or ‘all-you-can-eat’ are creating network congestion and commoditizing the network. These plans can hinder service providers from assuring profitability within the package in terms of which services are profitable and which are not. And we’ve seen flat-rate plans resulting in price wars, which have the potential to drive prices down.

Moreover, and this hasn’t generated the discussion it deserves, service providers may also be leaving money on the table by ignoring the potential of generating more revenues from high-bandwidth subscribers who are willing to pay a premium for better service.

As infrastructure investment is required to cope with the exponential growth in demand for bandwidth, flat-rate price plans aren’t sustainable in the long term to ensure a positive ROI for next generation networks. According to last year’s Informa Telecoms & Media’s Future Mobile Operator Pricing Industry Survey, 53 percent of service providers indicated that they thought unlimited-volume plans were already unsustainable.

The solution to this problem is to monetize services by deploying segmented and differentiated price plans. Subscribers exhibit different needs and willingness-to-pay. Service providers can take advantage of this diversification and provide higher value to specific segments by differentiating price plans, for example:

    • Time of day - to mitigate congestion problems. Service providers will be able to shift subscribers to off-peak hours with an associated benefit. This will free resources and generate more money.

    • Bandwidth - subscribers will pay different prices for different bandwidth, or they will be offered bandwidth on demand according to their specific usage for a premium charge.

    • Application - mobile TV services can be provided with higher quality of service than P2P.

    • Quality of service – service providers can guarantee end-to-end quality of service for premium services to specific subscribers and charge for it differently.

    • Geography – making calls from the network-congested city center more expensive.

It’s clear that service providers are actively considering diversifying their billing and charging packages to respond to changing market dynamics. It’s worked for other industries such as energy and utilities; the challenge we now face is to translate their experience into our connected world so that service providers can maximize their network investment while end users receive the value-added customer experience that will keep them loyal.

Mike Couture is vice president of Amdocs, where he leads the company’s global team of marketing professionals in the areas of market research and insight, product marketing, marketing communications, corporate marketing, regional marketing and account-based marketing.