Will IoT Lead to "Subscriptionless" Billing?

With the emergence of ubiquitous Wi-Fi and mobile network coverage, two billing models have dominated: “no incremental charge” access to Wi-Fi and “subscription-based” access to the mobile and fixed networks.

Huge new internet of things deployments might enable creation of a significant third approach: episodic access to mobile networks (and perhaps fixed networks), with billing based on an on-demand, consumption-based basis, with no fixed and recurring payments.

That would create a third charging method in between “no revenue” and “recurring revenue.”

So ff the internet of things creates new demand for occasional sensor connectivity that might not warrant an actual recurring subscription cost, it is logical to suggest that new subscriptionless billing models could develop, where an enterprise, app or service provider pays for episodic use of a public network, “on demand.”

One obvious question is how to handle the billing operations, which traditionally are relatively costly, for small ticket amounts.

source: ATIS  

A significant part of the IoT connectivity market includes clients or sensors that may only need to communicate on an “event” basis (potentially many days/months between events) with a small amount of data. These devices may only need to communicate in short bursts of data providing or receiving information on an “as needed” basis.

That is quite different from the traditional subscription model used by telecom service providers.

“Network slicing” is likely to be a key underlying capability to support subscriptionless use and billing, in that regard, according to the Alliance for Telecommunications Industry Solutions (ATIS).

As a business model issue, some way has to be found to allow such episodic use of the network, at prices app and service providers can justify for large deployments of low-bandwidth, low-usage sensors.

Basically, ATIS suggests, a new class of authentication providers could arise, handling the usage and billing when IoT devices need to connect to a network, but only on an occasional use, non-subscription basis.