FEATURE BILLING

use these services and others like them. That’s the business they’re in,” says Paul Lambert, senior analyst at Informa Telecoms & Media. “Asking Google to pay to access the Vodafone network is like a TV broadcaster charging a film company to show its films over its network. At the moment, Vodafone and Telefónica need the big search engines more than these companies need them. People expect to use Google and other popular Web sites on their mobile phones. Unless Vodafone and Telefónica actually block Google and other websites from their networks, the majority of their customers will find a way to use them, because that’s exactly why they signed up to data plans in the first place—to use these sites while on the go.” The suggestion that carriers should charge

content originators a fee for the delivery of their content positions them as shopping malls. The carrier has the footfall, the captive subscriber base, and it leases retail space to the people with products they want to sell. Shopping malls don’t have direct customer relationships, however, and leasing is their primary revenue stream not a supplementary one designed to react to new realities. For Cato Rasmussen operators should

become more like supermarkets, factoring the cost of delivering the product (as a su- permarket does with its overheads) into the price of accessing that product. But, there is a problem with this approach, he says, which is that operators “don’t have a clue” about pricing. “The telcos can only do their margin based on

quarterly or half-yearly figures,” he says. “They can’t do it per unit. They don’t know what the margin is, on a unit basis, for a telephone call or for an SMS message. Revenues are going down now but they don’t know at which point the margin goes into negative numbers. Now, as well, the revenue is moving out of traffic and into applications so they have to move from a traffic model to a licence model and that’s a very different business.” Billing systems are not geared towards

priced items, he says, but if operators can “get their heads around it” they will be able to “treat applications and over the top services on a normal retail pricing basis and set the cost of transportation as an overhead.” Another, more imminently achievable

revenue stream for carriers—but one that also involves charging for network usage— centres on the exposure of their network assets. While carriers are now coming to terms with the fact that making location

36

The accusation that carriers have not

historically been the

easiest to work with is one that recurs in discussions on these topics

APIs available, for example, enables the de- velopment of more attractive services, it is suggested that they could charge for ongoing usage of those network elements. Ty Wang, senior director of product marketing for Oracle Communications, explains: “There’s another type of billing relationship

that probably hasn’t been exploited yet, which is the B2B2C model. Let’s take Telecom Italia Mobile as an example. They expose location information to organisations who provide location services for fleet management and field service, to enterprise customers. Every time that enterprise uses a ‘dip’ into the loca- tion information it gets charged, and there’s the revenue relationship.” One of Oracle’s US carrier customers is

currently building applications for retailers like Walmart, Wang says. These retailers will frequently want information on the types of device that consumers have, or their location or profile information. “These organisations will pay for that information,” says Wang, “and the carrier can be the one stop shop for that.” It’s a model that may well be more suited

to enterprise applications than consumer ones, despite the increasing frequency with which consumer applications are relying on information from operators’ location servers. Many consumer applications are built by very small organisations, for example, whose revenue streams will not allow for substantial ongoing payouts for dips into carrier data. In these situations, says Wang, the operator will have to make the information available in as cost effective a manner as possible. But, he says, it opens up further possibili-

ties. “Maybe as the telco I can expose some of this rich profile information from the users so these third party developers can build applications that are very targeted. They can use me not only for location and profile information but potentially to deliver applications that will generate advertising

revenue streams. Now the carrier can be the settlement engine, if you will, between the advertisers and third parties. It’s early days, but this is where we see some of the growth,” he says. Getjar’s Patrick Mork, who previously

worked at games developer Glu, confirms that consumer application developers will be less amenable to an ongoing payment model. “The carriers need to make the decision as to whether they charge for that but what they can’t do is what they do to consumers, which is to nickel and dime them for everything,” he says. “Content owners need a decent margin to have a sustainable business and, if they have that, they can reinvest in better content, which in the end benefits everyone. Develop- ers have been frustrated by carriers, which is why so many of them moved to iPhone. It’s not that they weren’t making money on carrier portals, it’s the way the carriers worked. The way they charge and what they charge for is critical in establishing good relationships,” he says. The accusation that carriers have not

historically been the easiest to work with is one that recurs in discussions on these topics. Either they’ve been slow to pay content owners, too jealous of their own network assets to expose the APIs or just too uncooperative in general. And this perhaps hints at the least confrontational approach available to operators as they look to leverage their billing expertise to generate new revenue streams for a new operating environment. Rather than bumping up against other players and demanding they cough up for something they’ve already been getting for free, say advocates of this approach, operators should concentrate on providing billing and customer care as a service to organisations with products to market across their channel. The kind of real-time charging capabilities

that operators have had to establish in order to make prepaid billing a workable model can easily be applied to this new world of applica- tions and services. The information operators have, says Convergys’ Alastair Hanlon, is going to be similar to the information supplied by Google in the advertising world. Timeliness puts a big premium on this kind of data, he says, and operators should be working to increase awareness of what they can offer to third parties as a partner for billing as well as trying to treat them as a revenue stream. That awareness, he says, is not there yet. n

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