IP Technology Wreaks Havoc on the Telcom Billing Industry, IDC Says

FRAMINGHAM, MA – AUGUST 8, 2000 – The introduction of IP technology and services sent shock waves through the telecom industry, and now they are wreaking havoc on the telecommunications billing industry. In a new report, U.S. IP Billing Market Forecast and Analysis, 1999-2004, IDC sorts through the confusion.


"While IP technology may be able to provide for gee whiz applications and services, the potential of these new businesses is nothing without the ability to bill for them," said Iain Gillott, group vice president of IDC's Worldwide Consumer and Small Business Telecommunications research.

The difficulties IP billing create center around the inability of telecommunications networks to distinguish between the type of content being accessed or the application being used. For example, the billing system may not be able to determine if the content is voice or data, involves valuable applications or valueless surfing, or is using application service provider-supported applications or email.

As a result, Internet service providers and telcos have in many cases been forced to offer flat-rate pricing plans or tiered, flat-rate plans based on quality of service. However, with competition eroding price for voice services, operators are hoping for increased revenue from data services to maintain a competitive edge, increasing the need for IP billing.

According to IDC, the most significant challenges IP billing faces is the incompatibility between packets, used to deliver IP-based services, and minutes, the billing unit 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.

A horde of new IP billing vendors have rushed to market in the past few years to try to solve the problems. "The incumbent billing vendors were caught off-guard and were unable to react quickly enough to meet the new IP billing needs," Gillott said. "Their slow reaction created an opportunity for competitive IP billing vendors, and some of them are now enjoying much better success than their incumbent competitors."

Information like the above can be found in IDC's new report U.S. IP Billing Market Forecast and Analysis, 1999-2004 (IDC #B22512). This report analyzes the market for IP billing services. It discusses the need for IP billing and how it is accomplished. It also looks at the challenges the market faces. The report includes forecasts for IP wireless and wireline and broadband telecom services. It also provides snapshots of some of the market's major players. To purchase the report, contact Bruce Atlas at 1-800-343-4952 extension 4053 or batlas@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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