Getting Away from All-you-can-eat

An article in Telephony Magazine (snappy title!) talks about the challenges the phone carriers are going to face getting customers off the drug of all-you-can-eat-endless-rollover-minutes plans. Both mobile and broadband providers have got themselves hooked on this, along with their customers, but the fact is it’s unsustainable in the long-run.

Not that I would really enjoy paying more for higher bandwidth, and I definitely don’t think the non-neutral net that some of the carriers have proposed is right for any number of reasons. And caps and throttling of bandwidth typically seem arbitrary and sudden, which ticks people off. But it’s also true that there’s no such thing as a free lunch, and the fact is that the current set-up just doesn’t pay the bills for the carriers, which is going to stifle next gen infrastructure spending. If they can’t even make money off the current system, how can they justify spending the billions on the next one?

Here are some excerpts:

It’s no secret that most broadband plans today are flat-rate, all-you-can-eat - often with some fine print about usage caps that rarely come into play (or cause customer havoc when they do).
In large part it’s that one-size-fits-all approach to billing and charging that is at the center of many of the problems facing carrier broadband delivery today. And it is those monolithic billing systems carriers have relied on for years - slow to process transactions and designed to support simple, yet difficult to change, billing schemes (without million-dollar upgrade projects) - that must be overcome for broadband delivery to reach its true potential.
“The trend is that broadband is moving from an all-you-can-eat service driven by ever-increasing bandwidth apps to a combination of throttling, usage and [quality of service] that could drive new services and allow consumers to differentiate what type of service they get with what they are prepared to pay for,” said Nigel Upton, general manager of business support system products for HP.
The end result is that customers will become more active in choosing - and understanding - how they consume and are charged for bandwidth. “There will be some customers that feel nickel-and-dimed,” [Alice] Bartram said, especially those who were used to consuming huge amounts of bandwidth with no consequence. “But the question is: Are those high-value customers you really want and need to do something about?”
In the end, the key for operators is to understand that the future of broadband billing is less about billing at all - and more about pricing and new service creation and merchandising.
“What we’re talking about instead is using pricing as an alternative to throttling, using it as a way to try to influence and control customer behavior,” said David McNierney, vice president of business development for pricing and rating vendor HighDeal. “[Service providers] need to empower front-office people - product managers and marketing teams - to price and package services to meet not one but two objectives: to maximize revenue, yes, but also to minimize the impact on the network. Typically carriers have learned to put blinders on because their billing systems were so inflexible.”
Article: How the Broadband of the Future will be Billed