Will Billing Innovation Allow Mobile Service Providers to Sell Retail Apps, Not Pipe?

Service providers hate the idea of being "dumb pipe" access providers. They'd rather be thought of as providers of high-value applications. Precisely how they can do so has been the issue. 

In some ways, it is a complicated task. For starters, telcos, cable providers and satellite companies are "access" providers. 

That's just their role in the Internet value chain. 

That likely means that, no matter what, most of the revenue a telco, cable company or satellite broadband company makes, will be made from an access service.

What most people want from a telco, cable modem service, wireless ISP or satellite broadband provider  is access to the Internet. They don't want another ISP email address, or the apps the particular provider offers. They just want access to the Internet. 

That isn't "all" a telco or cable company sells, though. In many cases, service providers sell "apps" that use the network. Voice, text messaging and video entertainment are historic examples. 

But some might argue the philosophical approach can change in helpful ways, where it comes to revenue. For example, if voice, texting and entertainment video are "apps" that use the network, some might argue the logical approach is to expand that effort, creating more retail apps or features that use the network and network access.


There are two aspects to that effort. Service providers have to imagine and create valuable features or apps, or have to invent new ways to enable app providers to package and present their services. Then service providers have to create low cost, "zero touch" ways of provisioning and billing. ItsOn provides one example. 


ItsOn is a venture-backed software company with what you might say is an unusual story. ItsOn says it can enable mobile users to self provision temporary, on demand service plan changes, without needing to interact with an existing carrier call center. 

At least conceptually, the ability to make such changes "on the fly" could allow service providers to create, and bill for, any number of on-demand applications, features or services that at present are extremely cumbersome or possibly impossible. 

In a sense, ItsOn promises to extend usage-based service capabilities that carriers might, in principle, already have contemplated but have not implemented for reasons related to customer confusion, backend system constraints and retraining of in-house customer service personnel. 

Of particular interest, from a mobile service provider perspective, is the ability to do application level plans.

A service provider could decide to create a plan that provides a flat data rate for a specific bundle of apps or websites. That might make sense if a service provider wanted to price a plan lower if it does not allow use of video streaming, for example.

A brand could decide to make a streaming event like a concert or football game free for mobile users in a certain area who interact with their ad. Right now, that would be a cumbersome undertaking, and there is no revenue incentive for a mobile service provider to do so. ItsOn might enable both a brand-specific event pricing, but also a way for a mobile service provider to create a revenue stream.

A group of online retailers could offer reduced or free wireless service on a device in exchange for shopping through their sites and apps. Again, the idea is that new revenue opportunities are possible for the mobile service provider. 

For business users, ItsOn might enable a firm to create worker access plans that pay for specific data uses like VPN, intranet or email, but not personal web surfing. 

All of those, and more, might be called examples of a "retail" approach to using network access.