Thursday, December 1, 2011

Can operator billing expertise fill the "empty chair" in the OTT value chain?

Who do you trust to bill you properly?  The latest startup messaging company?  The four-month-old mobile over-the-top voice (OTT) player? 

Probably not. But chances are that you do trust your mobile phone operator.

The accepted view is that OTT companies and operators are locked in a fierce battle for consumers’ voice, messaging and video business.  But why can’t operators take different approaches on different fronts?  Why can’t they make money by working with OTT companies on billing, especially when giants like Google, Nokia and Research In Motion are encouraging it?

From a post at Connected Planet, based on a new white paper commissioned by Vesta Corporation:

Photo by me and the sysop via Flickr 
Over the top players are looking to telcos to provide the billing for their customers, and there is an empty chair in the value chain for them to fill. With a trend towards personalization and true customer focus, this position in the value chain can only get stronger – as long as telcos focus on customers rather than court-rooms.

Much of the debate centers on firms like Facebook, Amazon and Apple that do, actually, have quite good billing relationships with their customers.

But most people in the world do not have credit cards and are either too young or too poor to pay through bank accounts or on credit.  For these people, mobile billing is the most convenient way to buy content or services of all kinds.  From the CoreSite Newsletter:
Operator billing is known to be accurate, known to be supported in the call center, online and on the high street. In addition, operator billing enables users to be billed by a single entity for their monthly consumption of multiple services and applications.

Now the Vesta white paper and most articles on this topic focus more on m-commerce and on companies like Nokia that run app stores (and there is some data that shows that operator billing drives sales in app stores).  And Tony Poulous at TMForum is down on the whole concept, more or less conceding defeat on services, including billing for them (though he has other interesting ideas at the end of his post).

But is it really so gloomy? This is a potential new revenue for operators, who should not be afraid of at least exploring the full use of their capabilities.
And it’s a good message for startups too – there are potential partners out there (operators) who have the billing capabilities who need to succeed.

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