IoT billing software, IoT monetization

5 Things You Should Know about IoT Billing

IoT Monetization Essentials

By Yeal Ilan, COO, FTS

July 19, 2019

A lot has been said and written about the Internet of Things (IoT). Rightly so: over the past few years, millions of devices went online, and in the coming years many will follow. Next year, there will be a total of 25 billion embedded devices and intelligent systems. This ever-expanding mega-network connects every appliance, from kitchens, to cars and everything in between – and it is upending a lot of industries as a result. Telecommunication is no exception. What does it mean for communication service providers (CSPs) with regards to their IoT billing software, and how can they efficiently monetize these services?

IoT billing is still about what is used…

In telecom, billing used to be quite straightforward: communications service providers treated data in a similar way they have treated voice calls and text messages. They could just offer a certain amount of data, and at the end of the month send a bill – without really looking into what the data actually was used for. There are, of course, some exceptions: some providers already have dedicated plans with special prices for Spotify, YouTube, Facebook, and so on – but in many cases it does not go much further than that. The Internet of Things changes this: limitless amounts of connected devices are used for all kinds of purposes. For example, a connected fridge has a completely different kind of data usage than a security camera. Some use cases are way more complex than others. This means providers should offer data plans that are tailored to the specific needs of each IoT use case.

…but also about how it is used

Because the Internet of Things adds value to a lot of different industries, every organization will leverage it in its own way. For example, a farmer could connect the drones he uses to check his crops and receive the information in real-time. A city council might attach sensors to street lighting, checking for pedestrians at any time of day and switching the lamps off when there is nobody around. Revenue from connectivity is not always going to be high, so besides counting the number of bytes someone or something used, CSPs should also be able to count and understand the context of every transaction. They need to see how IoT devices are used, and effectively monetize that. In other words, true IoT monetization is about usage-based business models and not only about connectivity.

IoT billing needs strong partner management to support the different kinds of partnerships and settlements in the IoT world

However, a CSP cannot do everything: it is an important piece of a longer, oftentimes complex value chain – but still one piece nonetheless. IoT services also involve manufacturers, vendors, resellers and end users, requesting the support for different B2B, B2C & B2B2C pricing models. Therefore, an IoT billing solution should support all these partnerships and co-operations – while older solutions will not. Combining solutions could lead to fragmented information and needless complexity. It is therefore better to have one solution that allows smart revenue sharing and partner management capabilities – with no limit to the number of organizations or interconnection agreements and settlements involved. Needless to say, it needs to enable rapid-on boarding of new partners and support personalized contract creation for each partner.

Efficient IoT monetization enables different levels of charging and pricing plans

Being able to service that many different industries means an IoT billing software also needs fully and quickly configurable billing and settlement capabilities. Not every party needs the same amounts of data or is looking for a multi-year contract. Internet of Things billing has to allow users to offer new deals, services and pricing plans quickly and easily. That way, CSPs will be able to offer deals that perfectly align with the needs of their customers.

Communication service providers can use the data flows IoT devices are putting out

CSPs not only need to look more closely at how much data their customers are using; it is also important to use the information that these customers’ IoT devices are putting out. Because specific data can be very interesting to specific parties. For example, companies looking to get a better understanding of their potential customers might certainly be interested in buying information about the public, gathered by IoT devices. This, of course, means some effort on the side of the provider: The data not only needs to be accumulated and presented in a useable way, but it also has to be anonymized before it can be sold. But these data flows can, when handled the right way, become an important extra source of revenue.

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