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Billing
and OSS |
Billing
for people
April/May 2002
By Hans Eriksson, Product Marketing Director Vertical Markets, Protek
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Re-thinking
content and how people will pay for it
Yesterday, your newsagent charged you the usual amount for your newspaper.
Today, the delivery truck was delayed en route from the printing plant, so
the newsagent charged you 10 per cent extra.
You didn't bat an eyelid, and handed over the extra money. Tomorrow, if the
delivery truck breaks down and the newspaper has to be distributed by bicycle,
you won't mind paying double the normal price.
Will you?
Perhaps that's an extreme example, but it's intended to demonstrate the major
flaw in billing for networks: people should not have to pay for content depending
on the transport method used to deliver it.
To end-users, the transport method is utterly unimportant. It is the content
itself that they are interested in, and that they are prepared to pay for.
Charging structures and billing systems should reflect this.
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"Instead
of real-time measurement of network usage, you simply specify flat-rate
prices for all content options."
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It's understandable that mobile operators want to charge according to usage
of the network. They have network-centric thinking - they measure the usage
of the network and charge accordingly. But that model may not always be the
most efficient.
True, end-users have grown accustomed to paying access charges. They understand
that the more use they make of network resources, the more they will have to
pay.
But the future of mobile networks depends on value-added services. Less and
less money is coming in from the network itself, so new revenue streams are
essential for long-term profitability and return on investment. These revenue
streams depend on content, and the content depends on the opening-up of new
technologies.
The first stage is happening right now, with the introduction of GPRS, but that
still does not allow service providers to directly charge people for content
- the technology is not yet there. People are still only charged for volume.
Consider what sort of content users will pay for, and the perceived value they
will get from it. Things like breaking news, sports results, music downloads,
and location-based services (on visiting a new town, you can find out where
a good restaurant is, and so on).
In Japan, content is being made profitable thanks to the success of i-mode.
Why does i-mode work? It is fast and cheap - sending a single email to someone
via i-mode costs considerably less than it costs to do so via a mobile network
in the USA.
How much is sending an email worth to most consumers? Probably fractions of
a cent. But rather than simply dwelling on how much to charge, one of our other
main challenges is deciding what to charge for, and how to charge for it.
Simply measuring network usage adds complexity to the network itself. With voice-only
applications, you need only one probe to understand network use, but with data-rich
content services you will need many hundreds of them.
It's perfectly possible to 'listen' to all the devices on a network, and so
be absolutely certain of how the network is being used. But doing this is very
expensive, and perhaps not very cost-effective nor necessary for every event.
In the past, every operator existed almost independently, and just billed for
voice calls. But now there are lots of people involved in the value chain, and
tremendous effort is required to ensure that all of them end up with the revenue
they deserve from their contribution. New technologies in revenue settlement
will need to be built to maximise efficiency of such a chain. Again, it is feasible
to do this, but is it worth doing from a return-on-investment point of view?
End users also expect to know, instantly and in real-time, what they are being
charged for any particular transaction. We cannot expect them to download a
file, which may be one kilobyte or 10 megabytes, and only find out what the
cost is when their bill arrives at the end of the month. People will want to
know straight away what the cost impact is.
As for security - everyone knows that any information on the Internet can be
intercepted and read by anybody else, given the right knowledge and motivation.
To create a secure platform for mobile electronic trading, we shall need to
ensure that all data traffic is encrypted. Under variable pricing structures,
there will be a need for end-to-end network security to be put in place - security
that stretches from the end user, via the mobile operator, the service provider,
the content aggregator, and the content provider. Again, this is feasible, but
the return-on-investment gets even worse.
In many cases, these feasible but expensive methods are the ones being considered
as the only way forward.
We believe that there may be other ways of doing it.
Instead of real-time measurement of network usage, you simply specify flat-rate
prices for all content options. Downloading any MP3 file will cost, say, two
dollars. Getting live sports results delivered to your mobile handset will cost
10 dollars per month.
It should be up to the service and content providers to negotiate and come up
with a list of clear fixed - and fair - prices that can be communicated direct
to the users.
There's still a need for a settlement process, so that everyone gets paid the
money they have earned from the value chain, but if prices have been fixed and
communicated in advance, it no longer needs to be fulfilled in real time. With
fixed prices clear up front, the user does not need to be informed of the cost
of each content option as it is delivered - they already know what it has cost
them.
The consumer pays a fixed price for the content in its entirety, and remains
unaware of how it was delivered, or how many bytes of data were sent in either
direction to fulfill the transaction.
Also, by using a fixed-rate pricing system, the security requirements are less
intensive. With fixed rate pricing, rather than the end-to-end security requirement,
there is a less intensive (and less expensive) need for security between the
mobile operator and the end-user.
Our networks are going to be used, sooner or later, for delivery of all kinds
of premium digital content to consumer devices.
We know that consumers will be interested in a variety of data services tailor-made
for their mobile handsets. These will certainly include electronic newspapers.
But people are accustomed to paying a fixed price for a newspaper. They will
be unwilling to pay more for any digital version of it just because one day's
edition comprises more bytes than another day's.
Nor will they be particularly impressed with paying more because their newspaper
has followed a different path through the network than before. All they want
to do is read the news, and know that they are getting it for a reasonable price.
The greatest challenge facing those of us involved in billing for content is
adjusting our internal processes to better serve the end-users, bringing them
a service they enjoy using and are happy to pay for. Ultimately, we are billing
for people.
This article was written for Billing Systems 2002, running from 22nd-25th April
2002, Earls Court Conference & Exhibition Centre, London www.iir.co.uk/billing
Protek is an exhibitor at Billing Systems 2002, 22-25 April at Earls Court Conference
& Exhibition Centre
For further details contact billing@telecoms.iir.co.uk or visit www.iir.co.uk/billing
