FEATURE BILLING

Another model is also under discussion. Perhaps more controversially, this would see operators charging originators of traffic for its delivery

Application store providers remain divided

on this issue. Nokia’s Ovi store, for example, seeks to provide billing to the operator bill where available, while Google’s Checkout service bills to a credit card. Samsung has announced that it is to launch an application store around its Bada platform in 50 countries over the course of this year and that it will offer both credit card and operator bill charging options. It’s a theme picked up by Alastair Hanlon, director of industry solutions at Convergys. “The tier one application stores will have to have their own billing relationships,” Hanlon says. “But there is a vast array of lower tier and regional application store providers that are potentially more specialist, and they won’t have the same level of profile or trust that, say, Apple would. For those players the operator would be a far more trusted provider of billing and customer care services because of their existing relationship with the customer.” Clearly different application stores will bring

with them different billing scenarios. Indeed, according to Cato Rasmussen, head of business development and solutions strategy at Martin Dawes Systems, seeking to make end user billing relationships an exclusive asset is a futile exercise for operators. “I’m a customer of Barclays Bank but I still have a Mastercard with Lloyds,” he says. “And you can bet that Lloyds have just as much information about me as Barclays.” Nonetheless, operators are certainly going to

have to derive new revenue streams to ensure that they are able to capitalise on the increased consumer enthusiasm for mobile data consump- tion and the application download model. Top of the list and much under discussion within the industry at the moment is the tiered pricing strategy that will see operators charge users a premium for guarantees of faster network speeds, or greater data allowances. Some proposed solutions are based simply on usage limits and speed while others are more sophisticated and relate to a combination of factors such as usage patterns, particular applications and time of day. So an operator might de-prioritise peer to peer traffic coming from one subscriber in favour of any service for a VIP subscriber who is paying a premium for their status. The operators’ control over the network—

the only core asset that cannot be challenged by other players—gives them a distinct advantage here, says Rafi Ketchner, product marketing manager for revenue management at Amdocs. “In this way carriers can get ad- ditional dollars for the traffic that is already going over their network,” he says. “They’re the

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only ones that can guarantee end to end qual- ity of service for anything being consumed over their network.” It’s generally accepted that tiered pricing

of one form or another for the consumer is inevitable in markets where data consumption is at its most advanced. But another, related model is also under discussion. Perhaps more controversially, this would see operators charging originators of traffic for its delivery. Subscribers, after all, are paying for access but the organisations that provide the content the subscriber wants (and often is paying for) are incurring no cost for its delivery. Both Tel- efónica chairman Cesar Alierta and Vodafone CEO Vittorio Colao have, in recent months, suggested that the likes of Google ought to be charged just such a fee, either on a wholesale model or as part of a revenue share. “It would work in the same way that the

voice interconnect model works,” says Con- vergys’ Alastair Hanlon. “To begin with this was a free for all but it soon became clear that operators were going to calculate the settlement between all the parties that carry the transaction, including the party who originated the transaction. Back down the chain of data delivery you end up at Google’s door, for example, and you say that in order to delivery that vast array of content that they’re generating, they’re going to have to pay a wholesale rate. That’s the way it had to go to make voice interconnect work.” The suggestion is that content originators

could be charged according to the level of priority their traffic is given. “Because they can guarantee end to end QoS, services providers » will engage not just with subscribers but also with the likes of Google in what’s known now as a two-sided business model,” says Amdocs’ Ketchner. Google, of course, while the obvious example, is not the only company that might find itself facing this kind of demand from the carrier. Nonetheless, during his MWC keynote, Eric Schmidt addressed this proposi- tion, as part of the notion that operators could prioritise one piece of traffic over another by indicating that Google would require operators to apply the same processes to their own traf- fic, something which would involve regulatory involvement. It will be a tricky model to work and, for

some, smacks more of carrier desperation at shifting revenue models than it does of a genuinely workable strategic model. “Operators recoup their network investments by charg- ing end-users to access their networks to »

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