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LTE and the future of mobile data billing

By September 12, 2012 No Comments

Pricing, in particular the use of unlimited data plans, was structured to stimulate that demand—but there has been a significant downside. Growth in revenue from mobile data is not compensating for the decline in voice and text revenues and networks have been pushed to a breaking point. As the industry moves to LTE—and networks designed for data services and devices rather than voice services and people—there is an urgent need for a new approach to charging and billing for mobile data. Much has been made of the fact that LTE is a more efficient technology than its predecessors, offering a lower transport cost per bit. But revenue per bit is not likely to exceed the level achieved on 3G networks. Mobile operators, the players funding the deployment of this new technology, must find new ways of making it pay. A July 2012 Telecoms.com “Future of Mobile Data Billing” survey of more than 200 mobile operators worldwide revealed that:

  • Mobile operators believe their pricing and billing strategies for mobile data services must become more sophisticated and diverse in the immediate term if they are to maximise revenues from these services.
  • Certain network controls—and a wider range than are currently in widespread use—are essential to increasing that sophistication and creating new charging opportunities around mobile data services.
  • Greater diversity in network controls and pricing and billing strategies cannot be achieved without the availability of real time data to the billing system and the integration of that real time data with policy infrastructure.
  • Almost 80 percent of operators surveyed said their existing post-paid billing system did not currently provide real time data collection and rating. Almost 90 percent said they thought that it should.
  • Almost 80 percent of operators believe that bills should be delivered to an interactive smartphone-based application or portal.

The Telecoms.com survey proves that operators see the need for change in their data charging practices and believe that change will occur in the short term. While their support for different charging models varied from case to case, operators were emphatic in their conviction on three key points:

  1. The availability of real time data in the post-paid billing system is essential to the future of mobile data billing
  2. The integration of that real-time data with the operator’s policy function is fundamental to the creation of the kind of diverse network controls that will enable more sophisticated data billing solutions.
  3. Bills should be presented to users on the device to increase customers’ control over their own usage and to create lucrative opportunities to sell them extensions and upgrades on an ‘as-needed basis’.

  -Guest blog by Mike Hibberd, Editorial Director, Telecoms.com