Mobile Billing Blows Up

A year ago, mobile operators started to think about creative new ways to bill and charge customers using their suddenly overwhelmed mobile networks.

A year later, not only is the thinking over, experimentation is already in full swing and mobile operators around the world — albeit somewhat less aggressively here in the U.S. — are moving full-bore ahead with a wide array of billing options to both drive and manage customer demand for mobile data services.

The tools of the trade for this new approach -- policy servers, DPI boxes, more real-time and converged charging platforms, more powerful provisioning systems, all driven by IP — have been around for some time, but are being combined and deployed in creative new ways. Meanwhile, those deployments are being enabled by new Web 2.0 and service oriented architecture (SOA)-driven approaches and on cheaper, more powerful general purpose hardware that makes rolling out new billing and charging overlay schemes — as opposed to yesterday's monolithic billing systems — easier and cheaper than ever.

'Immature Markets' Lead the Way
The result is a boom in mobile billing creativity. Large global tier 1 operators face perhaps the largest mobile data crunch, and are beginning to wield price and creative offers and promotions as a weapon against the 5% of users that typically use 80% of their data traffic, as one typically quoted stat goes. But perhaps more important is the work being done in emerging and not-yet-fully-mature markets in China, India, and elsewhere, where things like post-paid mobile billing and flat-rate usage plans simply don't exist.

Instead, operators in those regions are balancing massive subscriber growth with paper-thin margins, utilizing real-time charging and subscriber and network management platforms to roll-out concepts — such as per-second billing or real-time promotional offers or hybrid pre- and post-paid charging approaches — that outstrip anything being done in so-called "mature" mobile markets like the U.S.

Again and again, vendors described how they were helping operators in developing regions implement such schemes — while also noting that in RFIs and behind the scenes, more established operators in the U.S. (where flat-rate rules) and in Western Europe (where new "sticker shock" billing limits are coming into play next summer) are telling them, "we want that too," said Nigel Upton , director, Communications and Media Solutions for HP, which recently debuted a new policy server, that combined with its existing charging platforms creates what it is calling its Real-Time BSS solution.

"The U.S. carriers we talk to are between a rock and a hard place," Upton said. "They are looking at business models in other areas of the world and saying, 'we want that,'" "Flat rate is not a sustainable model for anybody."

Another vendor said he's "up to his eyeballs in NDAs" from large operators evaluating the mobile landscape and ready to explore new mobile charging models. Need more proof large operators are eying new pricing models? In early December, king of the iPhone flat rate plan AT&T said it is taking a hard look at usage-based pricing schemes for mobile data).

"We've got to get them to understand what represents a megabyte of data," de la Vega said speaking at a UBS analyst conference in New York. "So what we're doing right now is improving all of our systems so we can begin to give customers real-time information about their data usage and begin to get customers educated. I think longer term there's got to be some sort of a pricing scheme that addresses the usage, but that's going to be determined by industry competitive factors, regulatory factors and customer acceptance."

Complicating things is the fact that device-maker and over-the-top players, most notably Apple, have developed billing relationships directly with customers that can be used to route-around operator billing. The counter to those moves is to better integrate carrier billing options into devices and app stores — something operators are working in frenzied fashion to implement. The key is opening up the operator network and back-office and exposing rating/charging/billing capabilities via simple to integrate APIs that developers can easily consume. Maybe even a better strategy is to "wholesale" those APIs to players like Google, who can then offer network billing options en masse to their emerging developer bases.

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