News of skyrocketing mobile data usage and the capacity crunch is not new. But the old way of solving the problem – build more network – is no longer enough in a world where mobile data capacity is not being charged what it actually is worth. With LTE on the horizon, policy management becomes critical in the quest to capture mobile data revenue from new business models.
“Our applications and content will be the key in LTE,” noted Tony Malone, vice president of network operations support at Verizon Wireless. “We want to take quality premium applications and match them to the device and user appropriately. We want carrier billing for applications that will go with new devices that are made for video and multimedia. We have 90 percent device penetration today. With LTE we want to get to 800 percent, and we think we can do that.”
But that said, it’s known that a wireless customer on a flat-rate plan tends to become unprofitable when usage rises beyond around 3GB, whether that’s one or multiple devices. Just look at AT&T Inc., which has been the biggest punching bag when it comes to the mobile data “issue” — the popularity of the iPhone has translated into unprecedented mobile data usage on the carrier’s network, resulting in widely publicized capacity and congestion problems, which in turn have prompted heightened investment, which then needs to be recouped through additional revenue. The problem, of course, is that everyone on AT&T pays the same amount for mobile data. Thus, bandwidth consumption since the introduction of the iPhone has grown by 50-fold, while data revenues have grown by only 250 percent.
The key, according to many players, is implementing smart policy management that can see what’s happening on the network, from which applications and devices, and be able to apply rules accordingly. That leads to the ability to craft interesting offers, implement targeted advertising and other revenue strategies. “Smart grid, factory environments and social media have all become highly transactional,” said Dirk Epperson, vice president of strategic planning and co-founder of provisioning platform provider Kabira. “Operators need to provide a high degree of availability of what’s happening on their network, in a distributed manner, to be able to offer compelling data services that they can actually monetize.”
For instance, Hutchison Australia sells plans where users pay by the kilobyte, but traffic sent to or from Facebook is free. “Think about how transactional Facebook has become,” said Epperson. “Existing policy solutions have never had to deal with this. To make that package happen, you have to monitor and apply decision-making across millions of packets, all in real time.”
Kabira offers a new policy functionality that enables carriers to slice and dice which bits are coming from which applications. It also helps operators to identify records and do real time billing, revenue shares, offer better segmentation, and identify the best targets for more monetization (i.e., upsells or special offers). It also enables new use cases like three-screen strategies where a user is given a federated subscriber identity and the ability to access content that is in turn optimized for whatever device the user is using at the time.
