In telecoms we were used to complex rating. Then we weren’t so sure. Voice and text became a commodity. M2M business models were going to be about scale and simplicity. Views on pricing models changed. Data became the value based battleground. In the commodity world of voice and texts, those who control costs most efficiently win. Some large carriers threw data into the commodity bucket and decided to offer access and bundles only – and are in the process of stripping out all the complex rating systems and replacing them with fast, simple, cheap replacements.
To some, complex rating is yesterday’s problem. For them the battle to retain value is lost and the game is now to cut costs to the bone and manage the business as a utility. And that is not a bad argument if you have the scale, skill and courage to do it.
Two years ago the age of value was under attack from another direction as well. The rise of the subscription billers and related crusades about entering the subscription economy were compelling. Everything, we thought, would be based on simple subscriptions – from magazines to software.
In light of these arguments, is there a future for complex rating and charging? It would seem so, at least in the eyes of complex subscription billers like Transverse.
We still live in an age of power outages. Being able to monitor the status of back up generators is of great value to many Americans. Combine the array of devices that are now always connected to a service like MobileLink and you have the perfect example of a service that has value – and benefits from complex rating.
Such a service might be well be offered as a simple subscription model but MobileLink’s business model is more sophisticated. The monitoring service is offered on a pay as you consume basis, and is a suite of push notifications. The service often includes a combination of one-time, up-front purchases, recurring fees and activity-based charges, such as notification of a low battery.
Whilst this example makes the case for sophisticated business models and sophisticated support systems, it also illustrates – again – how thinking about what is of value to customers is the best starting point when thinking about value added services. This M2C (Machine to Customer) example encapsulates thinking about customer value, trust, security and the ability to offer more than just the simplest level of service.
Perhaps telcos should think about examples like this before deciding to go down the basic, cheap utility route, without a second glance.
Join me for a discussion about business models, billing and cloud, tomorrow July 16th at 16.00 UK time.