Last week saw Apple bill around $500 million through its App Store. Last year, the App Store generated $10 billion for developers. The billing process is probably the simplest and slickest in the industry. Based on a utility system, it is about brute strength rather than elegance – something that Apple normally rather prides itself on. Customers make purchases. Sometime later they get an email with a receipt. There are no monthly statements. No-one expects one. This is the new, simple billing. Along the way, customers accept terms and conditions that they cannot possibly read without a legal team. In fact they are generally buying things that they actually do not own once they have paid for them.
Contrast this to the expectations placed on telecoms companies by their customers. Bills, apparently, need to be regular, consistent, accurate, clear and simple. If customers want a paper bill, they are able to have one. Incumbents are bound to accept cheques, and people paying at Post Offices.
This is where the problem for telecoms companies lies. One problem, anyway. They must invest millions of dollars in updating (or sweating) systems so that they can tell customers how much they have spent. And these transformations take so long that by the time they are finished they are out of date and need to be transformed again. Telecoms companies, even if they partner with OTT players, are doomed to be outflanked by the pressures driven by the same OTT players – to provide quality networks, quality billing and quality customer service. If customers have a problem with something they ‘bought’ from an App Store, they have to query it by email or find a ‘contact us’ page on a web site. Finding a number for most OTT players, let alone talking to someone, is almost impossible. Yet when something goes wrong with the broadband, customers expect to be able to pick up the phone and talk to someone who can fix it right then and there.
As a telecoms company, becoming as agile as an OTT player is the challenge of the moment. The choices they face are critical. Some are seriously considering approaches that are radical and therefore incredibly difficult to sell to senior management. And yet, in the Billing Room, it is ‘business as usual,’ managers are being asked to produce more with less, or are in the middle of never ending transformations that could be swept away tomorrow if the radical approach is sanctioned. It is an unnerving time.
Hi. I just wanted to mention that the industries being compared are fundamentally different with regards to regulation. On one hand, Apple and Google have lots of liberty to define without having to abide to complex regulations, whereas traditional CSPs need to abide to regulations as their business is under scrutiny by national and international regulators.