A Tale of Two IPT Service Providers By Barbara Lancaster, President LTC International

IP Telephony is rapidly reshaping telecommunications world wide. "Traditional" Billing systems, like "traditional" voice time division switches, are reaching their expiration, even for "traditional" Service Providers. For new IP-based Service Providers, "traditional" Billers just don't fit the business model. Vonage and Pipemedia are pioneers in the IP Telephony business; each achieving steady growth over a period of years. Vonage is primarily focused on the consumer and small business market, while Pipemedia also offers a hosted IP PBX offering for larger business customers, as well as re-selling DSL directly to its customers. By attending OSS exhibitions, talking with a variety of vendors, and in Vonage's case, bringing the "closest fit" vendor in for a pilot evaluation, both ended up defining, building, and operating their own customer care and Billing solutions.

Looking back

In a circuit switched network, it was reasonable to justify the price of 'long distance' on the basis that calls that travel a long way cost Service Providers more to carry than calls that go across the street. We were all conditioned to agree that calls placed during peak hours (i.e. normal business hours) were of more value and therefore priced higher than calls made on weekends, evenings or cheapest of all, in the middle of the night.

The disruptive force of IP

IP Telephony makes nonsense of the time-and-distance charging model - it is possible to transport the IP telephone service from New York to Sydney by simply plugging an IP Phone, or an Analog Terminal Adapter into a Broadband Access connection point in Australia to enjoy exactly the same service as if you were still in Manhattan.

The new low-cost network model has of course created the influx of new pure IP players into the Service Provider market. IP Telephony Service Providers (IPT SP) can buy wholesale capacity at a fraction of the build costs and enjoy the benefits of being buyers in a buyers market (although there are some signs that this imbalance is now beginning to even out). They can gain access to customers directly through tried and tested DSL technology, which has a low "barrier to entry" cost. But they still need systems to charge and bill their customer services. While each IPT SP we recently interviewed indicated that they first looked at the traditional "tools of the trade" used by traditional telcos, each quickly found that these tools were not what they had in mind.

As Lewis Holder, EVP Development at Vonage observed: "There were some great packages that did some of everything, but because they were so broad, they became too complex and too expensive. They couldn't "dumb down" their systems to meet our needs and our price point." These views were similar to those expressed by Pipemedia's Operations Director, Mark Seemann. Pipemedia chose to build their own customer management system from its innovative CD-ROM that walks each customer through all aspects of Broadband setup and feature activation, through to a web-based customer self-service capability that is well received, and well used by Pipemedia customers for all aspects of service and billing. As early entrants to the IP Telephony market, Mr. Seemann points out that Pipemedia had time to determine what they really needed. As a result, he believes their "…PipeCall VoIP solutions are ahead of the marketplace in terms of features and reliability because the systems were built from direct customer feedback."

What do IP Telephony SPs want from Billing Systems?

As already suggested, the old time-and-distance long distance charging models are pretty much history. Today's popular flat rate approach to "all you can eat" usage also reflects more closely the reality of how Service Providers and Carriers are charging each other for capacity and usage, even in mixed networks of some circuit switching with IP backbones. Perhaps most important to today's Service Providers is a radically reduced cost-base, essential given the ultra-slim margins available from today's service offerings. It's not surprising that our survey respondents uniformly said that they required their OSS environments to have, "Low cost, straightforward functionality and scalability."

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