How much is that ring tone?

update: 2/11/02 8:30AM PT

COMMENTARY--Mobile business promises that someday soon we'll be using our mobile phones to pay for a pepperoni pizza, but how long will it take to deliver that pie in the sky? The convenience for consumers and revenue opportunity for enterprises is clear -- but how will we conduct these new types of wireless transactions, and how will we pay the bill?

Mobile business means being able to conduct transactions from the palm of our hands -- anytime, anywhere. Wireless carriers have been talking about options such as the wireless Web and patriotic ring tones for awhile now; in a short time, that list will grow to include more advanced transactions. But with the advent of mobile business, comes the challenge of mobile billing.

In preparing for the transition from providing airtime-based voice services to handling large volumes of data traffic, carriers are now facing unique billing challenges. "One rate" billing has limited utility. When content, transactions and services are thrown into the mix, billing systems and procedures require a new level of complexity. In addition, carriers need to assure consumers that their needs will be met, that they will receive customized care and that they will understand their new bills.

So what will our cell phone bills look like in the months to come? Let's look at the some of the ways we'll soon be getting billed: by transaction, by packet and by content.

Transaction-based billing
We'll soon see pricing models that include a certain number of transactions or operations performed, beyond which we will pay extra. For example, I could pick a plan that includes 15 transactions per day, meaning every operation I complete would be deducted from that number. If I exceed 15 transactions per day, I'll pay additionally on a cost-per-transaction basis.

Packet-based billing
Another form of pricing will relate to the volume of the data streamed during a transaction, meaning charges that correspond with how many packets of data are transmitted. The airtime-based models of today allow us to either pay for a certain number of minutes or pay for minutes as we use them. Similarly, packet-based billing will allow us to either choose parameters for the amount of data we will likely transmit over a given time period or either pay as we go based on the price per packet of data. For example, if I regularly use my wireless device to stream information back and forth, I would choose a plan that included a high volume of data.

Content-based billing
A more sophisticated version of the packet-based billing model will involve examining the content of the data packets and charging differently based on the type of content that is transmitted. For example, carriers will examine specific packets of data to see what's inside -- if it's determined to be music, it could cost X dollars, while video or text will be priced differently. In this instance, specific content is given value and consumers are billed accordingly.

Delivery Time?
So when will we be able buy that pepperoni with extra cheese using our mobile phones? Luckily, the delivery time is getting nearer. Today, carriers, enterprises and infrastructure developers are working together to develop the billing systems and procedures that will provide the most ease and flexibility for the true mobile lifestyle. Providing customized bills, customer self-care options, new billing systems for content and data and links to settlement institutions such as credit cards or bank accounts -- the wireless industry will soon create a valuable mobile environment for everyone.

With so many new services and applications being introduced, we as consumers will have the opportunity to take advantage of customized pricing packages and rate plans that will likely include a combination of transaction-, packet- and content-based billing. Our days of paying for unused applications or empty airtime will be replaced with a world of innovative services and options literally at our fingertips.

Bob Shelton is Director of Strategic Solutions at Lightbridge, a global provider of mobile business solutions.