IP technology wreaks havoc on telcom billing

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IP technology and services sent shock waves through the telecom industry, and now they are wreaking havoc on the telecoms billing industry. In a new report, US IP Billing Market Forecast and Analysis, 1999-2004, IDC sorts through the confusion.

“While IP technology may be able to provide for gee whiz applications and services, the potential of these new businesses is nothing without the ability to bill for them,” said Iain Gillott, group vice president of IDC research.

Telecommunications networks cannot distinguish between the type of content being accessed or the application being used. For example, the billing system may not be able to determine if the content is voice or data, involves valuable applications or valueless surfing, or is using ASP-supported applications or email.

Internet service providers and telcos have offered flat-rate pricing plans or tiered, flat-rate plans based on service. However, with competition eroding price for voice services, operators are hoping for more money from data services. Because of a lack of industry standards, each billing company must create its own algorithms for measuring packets and converting them into minutes.

A horde of new IP billing vendors have rushed to market in the past few years to try to solve the problems. “The incumbent billing vendors were caught off-guard,” Gillott said. “Their slow reaction created an opportunity for competitive IP billing vendors, some of whom are now enjoying more success than their competitors.”

IDC’s new report, US IP Billing Market Forecast and Analysis 1999-2004, discusses the need for IP billing, how it is accomplished, and the challenges the market faces. The report includes forecasts for IP wireless and wireline and broadband telecom services.



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