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THOUGHT: Time for GSM Carriers to understand the TCP/IP world and its billing options
Posted by Arne Hess - on Monday, 03.03.03 - 15:03:00 CET under 09 - Thoughts - Viewed 4899x
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The 3GSM Congress was two weeks ago and CeBIT will start in two weeks and in Cannes we saw a lot of interesting developments for operators and I'm sure we will see interesting product announcements on CeBIT.

However, I'm still afraid that the GSM carriers still don't understand the Internet world in all its details and I'm not talking about the tech staff (these guys know how to build GSM networks, maintain GGSNs and SGSNs), no - I'm simply talking about the product managers which are responsible for the service and product designs.

I'm sure - now where we come closer to the launch of 3G networks - that we will see some introductions of streaming or download services but guys, please keep your customer in mind. GPRS is still to expensive, everywhere in the world and therefore I propose that you have a closer look how the Internet works.

What I would love to see are flat tariffs or at least bundled MB/GB in dependency to the ports. Ports - what are ports!? Many product managers at GSM carriers have never heard about ports (that's my experiences from the past) and therefore we can not expect innovative billing schemes - I think.

Every Internet service, doesn't matter if it is Web browsing, E-Mail, FTP, Kazaa or what ever, runs on "service" ports like: FTP = 21, Telnet = 23, SMTP = 25, HTTP = 80, POP3 = 110, NNTP = 119, WAP = 9201.

If these ports would be used for billing too, the operator would have the opportunity to bill in more flexible ways then a dumb KB counting as it is used today.

Imagine this scenario of a GPRS tariff: Overall GPRS access would cost 0.05 € per 10 KB (which is O2 Germanys standard fee today for GPRS) but this tariff would include some modifications/additions - bundled volume, depending on the service (port):

  • HTTP: 5 GB

  • POP 3: 4 GB

  • SMTP: 3 GB

This would mean that your tariff would have an included volume of 15 MB but for dedicated service types only like 5 GB for Web access, 4 GB for downloading E-Mails and 3 GB for sending E-Mails. All other services like FTP or even peer to peer file sharing would be billed with 0.05 € right away from the first kilobyte.

This kind of billing would give the operators even more flexibility since they would be able to offer streaming for additional monthly flat fees and so on. The range of what could be possible is so wide, why do we still have dumb counter based tariffs which are equal to voice where another counter is counting the minutes you've talked?

The example above is just one idea how to boost mobile data usage, there are still many other ideas available and I don't want to see innovative product introductions only but even more I want to see innovative billing scenarios.

So why - dear GSM carrier - doesn't we see this kind of tariffs today? Your billing could run this, at least if you would integrate some mediation between your billing and network. We have the services in place now, the handsets we was waiting for a long time (Smartphones as well as Wireless PDAs) becomes available also - so everybody made his homework - finally but where is the innovation from carrier side!?

Cheers ~ Arne

PS: If you are a carrier and want to discuss this kind of scenarios with me, need support or anything else, just drop me a personal note. ;-)

If you are a carrier and would like to explain us why we haven't this kind of intelligent tariffs in place today, please use the comments below.


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Posted by Dacs on 04.03.03 - 00:00:00


What influence do you have with GSM providers? especially in Germany? Just wondering, because you said once that you work in the GSM industry.


Posted by Arne Hess on 05.03.03 - 00:00:00

Well, I've worked since 1993 as product manager for GSM service providers, this GSM services providers buy more or less "bulk minutes" from the carriers and sell it under its own (co)brand to the customer, handle the customer relation ship as well as the billing.
Since 1998 I've worked for VIAG Interkom (today O2 Germany) as product manager and later as business developer and was the responsible manager for VIAG Interkom's WAP service (I've created it, I've launched it, I had the revenue responsibility). Therefore I was also involved into the tariffs for WAP services (CSD and GPRS - the GPRS WAP service "pay per click" tariffs is my "innovation" ;-).
And since last year, I'm working as freelancer and consultant for the GSM industry. So you see - there was a time before where I was also part of this product management I'm criticize here but unlike many other product managers in this jobs I'm online in the Internet since 1993 and before with the "Fido Net". Therefore I think I understand both positions: the GSM and the Internet.

Posted by Samuli on 05.03.03 - 00:00:00

Hei Arne!
Great article you've published here and thanks. As I'm working for a big Scandinavian infrastructure and terminal contractor I have to fight with this stuff for years also and you are absolute right if you say that the opportunity of innovation is missed by the carriers today. We modified the network infrastructure as well as we finally deliver the long time awaited Smartphones but what does the carrier did in this cohesion? Nothing expect still to whine that their mobile Internet business doesn't ramps up! No wonder with this less innovative services and specially price plans. No idea where 3G goes to with this service portfolio.

Thanks again for this article; I hope many carriers will give it a read and might pick up your ideas. Do you have more of this kind?


PS: Even if I don't use any Microsoft mobile products I enjoy your site. It's a good mix between wireless, hardware and value, keep up the good work; hope I am able to help you with our products anytime and maybe you are so satisfied by it that you move also. ;-)

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