Cisco Blogs

Usage-Based Billing by Service Providers?

February 3, 2012 - 4 Comments

In the past five years, consumer monthly Internet usage has grown nearly three-fold, but users spend little more than in 2006. According to Cisco’s Visual Networking Index Global Forecast 2011, consumption per U.S. user grew 278 percent. In that same time frame, according to published research, the monthly U.S. cable broadband ARPU remained virtually flat.

As consumers increasingly rely on their broadband access for more of the basic everyday needs, broadband has become the most important core service provider service when compared to pay TV, mobile voice, landline phone and mobile data. But these broadband service providers are struggling to get consumers to equate the value of their online experiences with the value of their broadband service. To that end, SPs are actively considering usage-based billing strategies as a tool to align consumer value perceptions with their underlying networks. Anecdotal evidence from non-U.S. SPs that have introduced usage-based billing indicates that it can drive new value creation.

To help explore consumers’ perspectives, Cisco’s Internet Business Solutions Group (IBSG) conducted a survey of broadband users in the United States, Canada, France, and Italy to determine current views on usage-based billing policies and approaches.

This particular document is titled “Usage-Based Billing Strategies Can Enable SPs to Align Customer Value Perception with Network Investments”.   It can be found on the Service Provider Thought Leadership section of the website of Cisco IBSG.  At this site, you will find many interesting, provocative papers on various subjects relating to the service provider segment.

Check this and others out . . .

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  1. I just came back from CiscoLive London 2012 and the hotel I stayed at had a less expensive usage based option for $12.50 USD. I was talking to another exhibitor who tried the $12.50 option and he said he used up all the allocated bandwidth in one 30 minute Skype call to his wife. I paid $23.00 USD per day for unlimited.

    Usage based billing is already in the USA. Many service providers are using NetFlow for usage calculations.

  2. I hope that we get unlimited broadband in the future.

  3. Very nice post Carter, I love your writing style. Thanks again for information.