What is Different about Billing for M2M?

June 29th, 2012 |

Sharing data is not a new concept in the technology world, in fact it really was the catalyst for creating the network in the first place. What is new is the increasing frequency in which machines are sharing data. This concept is called Machine-to-Machine, or M2M.

While the exact projections of just how massive M2M is expected to be varies depending on who you ask, most analysts are predicting growth rates of 30%-40% through to 2015. Despite the discrepancies on just how large M2M will get, one thing is for sure and that it is a hot market.

So we know (expect) M2M to become a bigger market over the next few years, so what? How is billing for M2M different than pervious IP based service offerings such as Data, Voice, Video, Subscription etc?  The key differentiator will be in the breadth of sectors offering services and the increased number of transactions that these services will bring.  It will not just be the telecommunication companies that will be taking advantage of this technology; health care, food services, entertainment, automotive, retail and many other industries will start breaking into the M2M world. Many of which already have.

M2M will be an approach of a lot of variety of service offerings, with high volume and low margins. Mobile operators that are accustomed to offering fixed rate or “All-You-Can-Eat” plans will have to prepare themselves for more detailed and complex billing if they want piece of the M2M pie. The ability to accommodate and monetize on this rapidly growing market segment will depend on whether the Service Provider’s back office systems are designed for this type of emerging technology. Their Billing and OSS platform should be configured to rate and bill for even the most complex service catalogues and high-volume data transaction.

This means many providers will have to adopt an ARPU business model specific for their M2M business that may not correlate with existing low volume high margin practices. This, again, is where the importance of having a capable backend network in place to accommodate the possibility of a dual business model becomes imperative. Having a system that can facilitate both sides as well as the increase in scalability, without the need for swivel chair management will be a major factor in ensuring success.

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