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Tag Archives: Oracle Communications

Where Is the Money for Carriers?

Editorial Opinion by Don Bishop

Don Bishop

Oracle Communications, a company that offers cloud-native applications and secure network infrastructure products, shed light on prospects for wireless communications service providers (CSPs), such as AT&T, Verizon and T-Mobile. The company published a survey titled, “5G Readiness Report: CSP Perceptions on Charging and Monetization for the 5G Era.”

According to the survey, 73 percent of communications service providers intend to launch 5G wireless communications networks by 2022. Notwithstanding, the survey found, 94 percent have problems that stem from the way they charge customers for services.

As communications service providers prepare to make a profit with streaming videos, network slicing, eHealth and virtual gaming, they worry their outdated charging systems will hinder customer experience, performance and the ability to get new offerings to market quickly, according to Oracle Communications.

“Communications service providers are making significant investments in their 5G networks and need to be able to quickly and effectively monetize new services to get a return, as well as deliver on customer expectations,” said Jason Rutherford, senior vice president and general manager for applications at Oracle Communications. “The survey shows that communications service providers recognize they need to rethink current charging systems to fully capitalize on the revenue potential of 5G.”

Meanwhile, U.S.-based consumer research company JD Power surveyed phone customers in December 2020 and found that more than half said that they were unwilling to pay extra for 5G (see Figure 1).

Figure 1. Willingness to pay for 5G service. Source: JD Power, Dec. 21, 2020

 

It is one thing to figure out ways to charge customers for something. It is another matter to convince them that what they receive is worth paying for.  Wireless carriers have a habit of bundling the cost of smartphones with service contracts in such a way that tells customers the smartphones are free. Maybe the wireless carriers have trained their customers to expect that whatever new features 5G wireless service will offer should be free, too, meaning that there should be no increase in their monthly bills.

You can imagine carrier planners asking themselves, “How do we charge for this?” and maybe balancing the answers between how to hide the charges so customers do not notice or how to trumpet the value of the additional service so customers are willing to, and maybe even want to, pay for 5G wireless service.

Customers worry about how to charge the batteries. Carriers worry about how to charge the customers. It’s a beautiful world.


Don Bishop is executive editor and associate publisher of AGL Magazine.