Monday, October 18, 2004

New VoIP Billing Systems: Another Stake in the Heart of the Old Guard

The Internet boom of the late 1990s brought about some interesting changes to the IT paradigm. You know the one where there had to be a highly paid CIO and armies of IT techno-weenies running the billing system, customer contact/care systems, etc.? Tape transfer, re-coding and printed bills ruled the day. Billing errors cost shareholders of the big companies millions every fiscal year.

The first true white knight was Portal’s Infranet product. However, at a $1 million plus price tag and video “convergence” zealots ruling the IT wings at many carriers, the larger companies shied away from complete billing system overhauls.

Fast forward to VoN 2004. Today we see PC and small server based systems that can use VoIP switch data over an Ethernet link. These systems cost a fraction of the old ones and require little if any maintenance. If one pairs these systems with terabyte storage systems from such companies as EMC, you have, quite literally, the exact same systems as the RBOCs currently have…..only better. The new Broadband Parasites will have a clear advantage over existing carriers. Their shareholders and customers will be the direct recipients of the advantage.

The new systems are so impressive, they should be considered for existing companies as well. They are cheap, reliable and easy to maintain. They use standardized operating systems (UNIX variants) and reliable relational data bases. This new generation of systems has superior customer support built-in. This alone should make the 21st century VoIP carriers better suited to deal with disgruntled RBOC, ILEC and CLEC customers yearning for the days when they could actually get a problem solved when they called their carrier.

So, what do we now have with regard to VoIP solutions?
1. Less expensive voice switching systems due to lower hardware, feature and maintenance costs.
2. Less expensive operational systems due to better integration with network management systems (better technical problem monitoring and resolution).
3. Less expensive billing and customer support systems.
4. Lower operating costs with respect to SG&A.
5. Newer, faster product development.
6. Increased revenue due to removal of target market boundaries.

Look for VoIP pricing to hit $19.95 before the end of the year. Companies could add a suite of VoIP components in 2005 and begin writing off the old assets as they fall into disuse in the subsequent fiscal years. Shareholders would see constant improvement in margins and revenue over a multi-year period.


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May 1, 2006 at 1:41 PM  

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