Top Level Quick Take Analysis: Communications Services Billing Management Transitions to VoIP

Communications systems depend on accuracy and reliability. Communications services billing management markets promise strong growth.

Partners for Billing Services Review

Partners for billing services review promise to provide value to the enterprise communications department. Convergence of networks brings voice over IP. The ability to transmit telephone calls over the Internet changes telephone billing. Issues relate to the management of a range of voice, information, and conferencing services. Educational services promise to become a significant aspect of telephone billing as people need to be continuously educated about changes in technology related to performing a job.

Micro billing is the great strength of the communications services providers. Micro billing extends the reach of these services providers significantly. The ability to utilize micro billing means that a range of services gets billed over the telephone network, not just traditional telephone services. People may purchase a coke using their cell phone. Once we can bill for a range of services using the telephone, the billing software becomes more complex. Telephone companies have always had the ability to transfer transactions between different telephone companies. Now they will adapt to revenue sharing for more than telephone services.

People are able to purchase a coke with their cell phone, they are able to purchase movie and music and sports tickets on line, which means over the cell phone as well. Educational services promise to be added to the mix as people continue to be educated their entire lives.

The telecommunications, entertainment, video and multimedia markets are undergoing sweeping changes. These changes affect the billing systems and portend increased need for experts to monitor the accuracy of the billing that is conducted by the telecommunications services providers. With a telecommunications industry history of billing that is off by 6% to 18%, bill monitoring is a value proposition. In addition, there is market confusion brought by the introduction of other communications services providers.

With the advent of broadband, the range of services providers expands. Wireless services providers join the traditional services providers of Verizon, Bell South, and SBC, though each of these has a significant wireless market presence.

Entry of multiple service operator (MSO) Comcast into converged services markets is occurring. Comcast is adding VoIP to create a triple play model in January 2005. This is the greatest threat to local wireline incumbents.

There are other non-traditional players. Yahoo is the second largest broadband provider in Japan. Disney is said to be interested in becoming a telecommunications provider. T Mobile with its presence at Starbucks and other hotel and fixed wireless locations could add significant voice over IP capability.

In fact, VoIP is changing everything. VoIP works. It is clear, it is a lot better than landline in some cases. Telecommunications services markets are currently characterized by expanding product / services developments.

Expansion of the digital home to business markets is inevitable. The media center combines voice, video and data applications, and includes VoIP, broadband TV, digital video recorders (DVR or PVR), home networking, CD and DVD playback and MP3. Cable TV operators, telcos, consumer electronics and IT companies are all competing for the media center business for the digital home. The business model is being extended to the enterprise with combined delivery of voice over IP, video conferencing, video educational services, and information transfers under one billing package.

The ability to deliver integrated products is known as a triple-play model, where by voice, video and data applications are all delivered over one single access subscription.

With the arrival of the Internet, content became more prominent. Video based applications were revived in order to deliver them over the Internet. The file-sharing features of the Internet created music sharing. Similar peer-to-peer file sharing initiatives shows that multi-media file sharing remains a key application.

Multi-media file sharing can be seen as a subset of Webcasting, of which streaming data/audio/video and Video-on-Demand (VoD) are other examples. DSL based broadband networks based on IP are rapidly moving into triple play business models.

One of the first companies to explore triple-play models in this new environment was Fastweb in Milan, Italy. TransAct in Australia was also one of the pioneers of the model, using a VDSL network solution. Japan and Korea were other early adopters of the triple-play model and they have made significant progress, which has spilled over into Hong Kong, Taiwan and other South East Asian markets.

Further progress was made in 2004, when the regulatory regimes in Europe started to deliver more commercially viable local loop unbundling services (ULL). This is resulting in some ten million DSL lines in France, Germany and the UK now being ready for triple-play deployment — and this number will at least quadruple over the next 12 months.

The impact on managed communications services billing is significant. As more services are bundled, the opportunity for error in billing increases. In addition, the change in billing process is confusing. With VoIP, voice over Internet Protocol, there is a change from traditional billing patterns that is not transparent. Many enterprises will need the help of an expert to achieve a seamless transition to the new types of billing services.

- Research by Susan Eustis, WinterGreen Research

Copyright 2005, WinterGreen Research, Inc. All Rights Reserved Reproduction without Permission Prohibited

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