Content will be king in 2011 for service providers, predicts a Canadian-based billing and operational support software company.
Flavio Gomes, CEO of Cambridge, Ont.-based LogiSense Corp., believes that this year telephone, cable and Internet providers will increasingly try to apply granular controls over their networks to charge for content where they can.
In Canada and elsewhere, “the plumbing wars are over,” he said, referring to the race to build faster wired and wireless infrastructure. Instead, using technology like deep packet inspection, providers will focus more on seeking new ways to monetize the networks.
“We strongly believe the world of ‘all you can eat’ is over,” he said, meaning allowing consumer subscribers to download unlimited amounts of data for a flat monthly fee.
Instead, providers will try to leverage new telephony and entertaining services about to be rolled out, he said.
“Network operators need to recoup the costs of their investments,” Gomes said, thanks to increasingly heavy data loads.
Rules by Canadian and U.S. telecom regulators allowing limited traffic management through will play a role in that, he said.
He believes last month’s proposed new network neutrality (net neutrality) regulations by the Federal Communications Commission will have a big impact in the U.S.
“It’s a big driver to how service providers will be charging and managing their usage of consumption-based elements of their networks,” he said. “Being able to predict where that path is going is important to us,” he added, “because our R&D efforts are premised on the fact that networks will be open.”
LogiSense’s Windows-based EngageIP software processes subscriber transactions in real time and lets carriers adjust subscriber billing accordingly.
Larry Goldman, the head of telecom software research at Analysys Mason, a Chicago operations telecom research and consulting firm, agrees that for providers content is becoming increasingly important not only for strategy but also other concerns.
“Faster networks don’t make you put in a new billing system or a new customer care system,” he said. “New services like content does.”
The importance of content can be seen in Shaw Communications Inc.’s purchase of the Canwest Global TV network, which analysts say is an attempt to match the broadcasting interests of BCE Inc.’s Bell Canada and Rogers Communications.
The non-discrimination section of the Telecommunications Act, which the Canadian Radio-television and Telecommunications Commission (CRTC) says applies to both Internet and wireless traffic, has so far dampened service providers’ hopes of setting content-related fees.
The commission will hold a public hearing starting May 9 into the effects of convergence on the telecom and broadcasting industries.
LogiSense, which targets Tier 2 and 3 carriers with up to 1 million subscribers, will announce Tuesday that it had a good year in 2010 and expects revenue to double in 2011. Five new customers are about to turn on EngageIP systems, he added. However, as a privately-held company he wouldn’t give financial details or name the new customers.
In a pre-announcement interview, Gomes said the company expects to hire five more staffers this year, mostly software engineers, to bring its total to 26.
LogiSense is working on entering new markets around the world. It already has customers in Europe and the Pacific. But Gomes also sees potential here with the possible entry of new VoIP providers.
Canadian providers that use some or all of EngageIP’s modules include Martimes phone company Bell Aliant; Quebecor Inc.’s Videotron cable division; Ontario’s Atria Networks (just bought by Rogers Communications Inc.); Telecom Ottawa, InfoSat Communications LP of Calgary and hosted VoIP provider Epik Networks Inc. of Toronto.
