IP technology wreaks havoc on telecom billing industry

December 8, 2000 —

The telecom industry currently has no accurate way to bill its users, IDC said this
week. The research firm, based in Framingham, Mass., said that telecom businesses are
increasingly unable to keep up with new IP (Internet Protocol) technology and
services.

IDC said that telecommunications networks cannot distinguish between the types of
content customers access or determine which applications customers use. As a result,
service providers cannot bill customers at different rates for different services.
Today, ISPs generally offer flat-rate pricing plans or tiered, flat-rate plans based on
quality of service. Still, the need for better billing methods has only become more
acute.

According to IDC, one of the thorniest problems of IP billing lies in measurement:
packets are the fundamental units of IP-based services, but minutes are the billing
units that consumers and businesses recognize. Because of a lack of industry
standards, each billing company must create its own algorithms for measuring packets
and converting them into minutes for billing purposes, the research firm said in its
newly released study, IP Billing and Market Forecast and Analysis.

Incumbent billing vendors were not prepared to react quickly enough to meet IP
billing needs, said IDC. In the past few years, new IP billing vendors -- for example,
Portal Software, Solect, and Exacct -- have emerged to try to solve these problems,
according to Demetrios Louloudes, IDC's group market manager.

ITworld.com