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Tuesday, 2 February 2010

Challenging the Single Bill Idyll

Am trying to work through all my notes from the States and thought I would run this issue by you and see what you think....I call it the "Single Bill Idyll".

I had the opportunity to ask some of the founders of some of the most successful FTTH networks (rural and mixed urban-rural) "What would you do differently if you were starting today?" Bear in mind, some of these projects have been going for 10 years (yup, we are a *long* way behind). The world has changed considerably in that time, so plenty of lessons have been learnt by these guys, which happily they shared with me, on many aspects of FTTH network operations.

Two of the answers included changes to the way they bill the end-user.

In general, the people I met are running open networks. That is, that any service provider can offer each consumer (be they business, public sector, households, etc) a variety of services the consumers wants over the pipe.

In an ideal world, from a consumer point of view, we would all prefer to have the least number of bills coming through our door - the Single Bill Idyll. From a converged telecoms point of view, we have seen most operators opting for bundles in order to try to achieve that. Not often that they try so hard to keep consumers happy ;o) but in this instance, it makes sense for minimising churn and maximising revenue, even where a proportion of the revenue is simply a commission on reselling someone else's white label product to fulfill the bundle.

Where a network (such as Onsnet in Nuenen, for instance) sets out to build a Wholesale Open Access network with suppliers providing the content, and then fails to attract providers, the choices are...well, nil! You have to provide the content, and you bill the user. You are all things to all men, as it were.

However, where a network is built knowing that the network is open access, then you bring in suppliers for all the content. (Don't think Hollywood type content eg films etc when we talk content as for many of the networks I spoke to this is a very minor part of the usage of the pipe - I'll have to come back to that as it changes some current thinking in certain depts!)

The quandary then is the move away from the single bill idyll. So, question for readers:

Do you

a) Protect the single bill idyll because the consumers like it, and take on all the billing for your suppliers. (Negative aspects of this are that you need to create a billing system to fit, that you are often seen to be the supplier of the services and any problems concerning it are associated with your company/brand etc. Plus, who do you think gets the support calls?!)

b) Protect the single bill idyll, but allow your suppliers to bill for everything, including your monthly subscriber fee/connection cost. (Negative aspect of this is that if the going gets rough, the last bill the supplier will pay is yours. Also, if the customer takes more than one service, it gets complex).

c) Stuff the single bill idyll. The customer has to take the good with the bad - they have a fat pipe, multiple services that didn't even exist in the days of good ol' broadband, so they can pay two (or more) bills.

Your thoughts on this issue would be most welcome. In the meantime, I have discovered that many people would actually be willing to PAY to get BT bills off their doormat forever. I may extend the survey more widely and challenge the spend of the levy on this basis!!

1 comment:

GuyJ said...

Taking into account the push services (Healthcare, Education, e/tGovernment et al) which are historically in the UK delivered free at the point of use (unlike the USA, obamacare notwithstanding),

then option A has a better fit on the face of it and option B is more difficult to envisage, unless the push services are themselves bundled into the access layer charge perhaps...

Certainly a key real challenge facing the telecoms market of today is in changing its thinking about what exactly content might become, as FttH gives customers the tools to become content creators in their own right rather than glorified Telly addicts!

Structurally separating the equivalent of dial-tone (lighting the fibre and keeping it lit) from value-added services has clear merit, as this approach teases apart the monopoly elements of FttH from the competitive open access model required to maximise value to the customer.

The above approach lends itself to option C at the expense of dispensing with the Single Bill Idyll.


There is no single right answer to which of options A, B or C are better.

It is always helpful to consider what will offer the most value at least cost to the customer and act accordingly...

Always remembering, regardless of our day-jobs, that we are all customers, or will be once FttH comes to fruition!