We recently examined the potential revenue opportunities of Direct Operator Billing (DOB). It is clearly not the only strategy for ‘replacing’ the revenue lost due to OTT erosion – but potentially a very effective one. If you accept that the network (along with customer service) is the key differentiator, then operators have some major opportunities to leverage this.
While consumers will appreciate, say, a good quality video experience, it is the application and content providers who need to be sure of delivering quality services. Microsoft, for instance, wants to launch Exchange, Sharepoint or a suite of applications in the cloud – perhaps in a new territory. They can hope that all operators in a region have equally robust networks to deliver the services. The alternative is to partner with one (or two) operators with proven network performance in order to deliver services with built in guarantees. Since the blame for poor service is aimed at the application provider rather than the network provider, Microsoft will suffer if the service fails in some way.
The idea of Quality of Service (QoS) as a differentiator is not new. It has been around for more than a decade. What is new is that real life examples are emerging, enabled primarily by LTE and more manageable and flexible networks.
What are also emerging are the challenges of billing for non-telco services. Whether the strategy is to offer cloud based services, such as storage or software applications or a range of ‘M2M’ services, getting information from non-telco services into a telco billing system is becoming a major challenge.
Like QoS, the concept of Billing on Behalf of Others (BOBO) has been around for a while. Unlike QoS, figuring out what and how to measure, price and bill will be complicated. And now we have accepted that the ‘subscription economy’ is too simplistic to work in many cases, a flat rate, bundled or subscription model will only work for a while, if at all.