Pipeline Publishing, Volume 3, Issue 2

	This Month's Issue:
	Time for a Check Up

The Cost of Complexity

By Barb Lancaster

The Billing Challenges of IMS

In the last issue of Pipeline, I wrote about Quality of Service in the IMS environment. QoS is one area where IMS can potentially deliver a strongly differentiated service offering compared to what might be available over a “free and unfettered” IP network such as the Internet or its descendant. And it’s the kind of differentiator that some customers logically may be willing to pay extra for. What is less clear is just how much more they’d be prepared to pay, and how many would pay it. As technology developments further improve the capability of smart edge devices to deliver QoS over unmanaged or lightly managed networks, it’s also important to consider how long customers will agree to pay that premium.

Understanding the actual value of QoS is just one of the complicated factors that service providers will have to take into account as they build their business cases for investments in IMS. Today, we’ll explore another putative benefit of IMS from the business case perspective: the ability to bill in more fine-grained ways for content and services.

In recent years, there has been a trend in telecom billing to make things simpler for the end customer. Flat-rate calling plans are now common for long-distance and even international calls. It was just a few years ago that calling plans were complex combinations of factors like time-of-day, day of week, lower rates for weekends and holidays, multi-layered discounts, and apparently infinite bundling options. Services like caller ID and voicemail that for years attracted supplementary charges are increasingly bundled with the basic line charge. Not to mention DTMF – yes, remember when “touch tone” cost more than pulse dialing?

There were charges for “special” services such as WATS lines and FX/FCO services - if any enterprises are still paying premium charges for such services in a world of good quality flat-rate VoIP, then their accountants are asleep. Leased lines were once charged using complex distance-related formulae; today’s VPN technology makes distance irrelevant. And if you think cellphone charge structures are complicated today, have a look back at some examples from mobile services ten years ago.

Today, from the perspective of the end customer, rate structures are much simpler. It’s not that we don’t have the technical capability to make things complicated; it’s just that we’ve learned that most of that complexity simply irritated customers. I suggest that billing complexity actually didn’t add a lot to the bottom line either.

"Today, from the perspective of the end customer, rate structures are much simpler."

So let’s think about the notion that service providers can boost revenue by billing for more and more stuff. IMS is certainly an enabler for such a tactic. IMS will enable service providers to take control of the setting up of each session. They will consequently know a lot about the user at the end point of each session. Looking inside the packets of each session will enable the service provider to identify what sort of content is there.

It will be possible to consolidate charges per packet into a total for each session, making it possible to charge for a session, any session, just as if it was an old-fashioned phone call. It will be possible to charge the customers at both ends of the session according to the nature of the data. For example, a voice call may be seen to be more valuable per packet than an IM session - maybe. Why stop there? A business email is clearly worth more than a social email. Should documentary videos be carried at a premium because of their extra educational value? Or should feature movies cost more because the stars are paid more? Or how about the notion that service providers should earn a few cents commission from every eBay sale?

Content billing, enabled by IMS and specialized content billing systems could mean that customers will, once again, receive lengthy detailed bills, listing individual sessions and the applicable rates, just like their phone bills in the old days before flat rate dominated.

While some of this may sound like wishful thinking, it reflects the trend for service providers to look for ways to charge for transporting content, not just for use of the network. The CEO of AT&T (formerly SBC)

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