Monetizing LTE Investments: Dynamic Policy Management
LTE makes dynamic policy management possible – giving MSPs unprecedented control over the speed and quality of the actual service experience.
LTE is no longer the future of telecommunications; it is now a key component of the network’s infrastructure. Service providers are investing heavily in this technology to meet customer demand as consumers continue to purchase smart phones, tablets and other wireless devices at unprecedented rates. While mobile service providers (MSPs) are expected to deliver a core technical performance, for the subscriber, the experience is centered on the device and apps they are using. Consequently, device manufacturers, content providers and app developers are gaining mindshare and realizing impressive increases in mobile revenues, while MSPs risk losing money as they become viewed as nothing more than data pipes. Fortunately for MSPs, the same LTE technology that makes the data explosion possible also holds the key to improved profitability.
LTE promises greater profitability by enabling the MSPs to improve the subscriber experience while reducing cost per megabit by using a more efficient, all IP infrastructure. In traditional Wireline or Fixed networks, adding additional transmission lines, fatter pipes and improved efficiency were common responses to traffic growth and network congestion. However, this was not a sustainable solution because MSPs do not have unlimited resources and capital. The critical radio spectrum via which LTE and all Mobile Broadband services are delivered is also finite and gains from improved spectrum efficiency will only go so far in expanding network capacity. While increasing capacity with additional spectrum and subsequently improving spectrum efficiency are more important but they will not be enough to handle the substantial growth of mobile data in the coming years. Instead, MSPs will need to utilize the Quality of Service (QoS) and policy techniques that LTE now delivers to better manage their mobile services and, more significantly, the customer experience.
This approach also provides new ways to profit. Prior to LTE, MSPs were forced to take a "best effort" approach to service quality and bandwidth issues., but LTE makes dynamic policy management possible – giving MSPs unprecedented control over the speed and quality of the actual service experience. This feature allows MSPs to create more innovative pricing plans, prioritize high value accounts, optimize certain video content and better manage users that unduly strain network resources.
Although this approach adds a level of complexity both in terms of implementation and QoS measurement, it will be well worth the effort as MSPs see improvements in quality control and network insight.
Many MSPs have seen their profits – and their brand equity – eroded by a growing class of Over-The-Top applications. Those that chose to offer branded services can utilize dynamic policy management to ensure a superior experience, one that will build greater subscriber loyalty. MSPs can design a new set of mobile plans to attract new customers by appealing to their buying habits, offering premium plans to those that want the best possible service and lower tiered plans for people that prefer to economize. In this way, flat rate or “all you can eat” mobile price plans will slowly disappear in favor of these more personalized offerings. Subscribers will eventually be able to choose between tiered performance levels based on selected services or applications – either on a contract or on-demand basis. Dynamic policy management available via LTE will essentially allow MSPs to sell instant access to high quality or high bandwidth applications, thus enabling the subscriber to upgrade their service for a fixed period of time. This will also enable MSPs to provide consumers with near instant access to that “must see” high definition video, anytime or anywhere.
This type of network flexibility and service quality control can also be used to create revenue sharing agreements between the MSPs with both third party content providers and application content vendors. Additionally, MSPs can leverage the capabilities of LTE to ensure that their high value customers and corporate accounts receive priority service, as reducing churn in this segment is especially important for an organization looking to improve bottom-line profitability.
Along with reducing cost per byte, LTE provides MSPs with the strategies they need to ensure that certain users do not consume more than their fair share of bandwidth. These users not only drain profits, but they also cause the congestion that leads to poor experiences for all mobile subscribers. Employing Fair Use Policy Management to limit this type of traffic goes a long way in reducing complaints, churn and unnecessary infrastructure investment.
Before MSPs can capitalize on these opportunities, they must have the systems in place to tightly monitor and manage Quality of Service.
LTE technology allows a device or a subscriber access to 24 bearers or data pipes at any one time, where each bearer can host an individual or specific service type. Each bearer can then have its own QoS class. As defined by the 3GPP technology standard there are 9 possible QoS classes, identified using a specific Quality Control Indicator (QCI). This indicator maps the specific service in question to a guaranteed or non-guaranteed bit rate (GBR or NBR) and controls both the speed and quality of the service accessed, via the LTE network or transport resources.To charge for superior service, MSPs must be able to prove that they are indeed delivering the promised level of service. The service provider must be able to collect Requested, Negotiated and Delivered bit rates to measure quality across the network as a whole – and be able to slice this information by customer, application or other factors.
In preparation, MSPs must work closely with both their Network Equipment and Network Monitoring vendors. Previously, the introduction of data services and, more specifically, the explosive dependency on 3rd party content saw MSPs and Network Monitoring vendors concentrate on ensuring that the connection from the subscribers device to the external packet or data network was correct. Beyond the network edge, they had no real visibility. With the introduction of the QCI, the actual service experience in terms of speed and quality delivered through that pipe can finally be truly measured. First, the actual quality requested will have to be identified and then extracted, followed closely by the subsequent quality measurement relative to the associated service. Such requirements will engage MSPs with Network Monitoring vendors to determine complex extraction and measurement techniques capable of ensuring the delivered service quality is equal to what is promised. More significantly, being able to dynamically change the QoS available to a subscriber on an as-needed basis adds an additional level of complexity, not only in terms of how this implemented, but again in how it is measured.
Because this is a very complex undertaking and changing the way mobile services are offered won’t happen overnight, MSPs will most likely take a phased approach to adding QoS and Policy management to their networks. Starting with congestion reduction for resource hungry applications, such as peer-peer services or file sharing, MSPs can begin to look at the resources on their network from a very detailed and consumption oriented point-of-view. Because it is difficult to measure the subscriber experience and validate that the performance delivered meets the conditions specified in any Service Level Agreement (SLA) is difficult, premium plans will no doubt be introduced first to corporate or key accounts before personalized tariffs go mainstream.
LTE has already helped MSPs differentiate themselves in the consumer’s mind, especially as devices and apps become more and more network agnostic. As coverage increases, more people become enamored with the increased speed and functionality LTE provides. The investment in infrastructure is sizeable, and charging for a premium experience will no doubt become standard practice in the near future as the capabilities of networks continue to grow. MSPs need to take steps today to ensure their ability to fully capitalize on these investments; after all, no one wants to miss out on the next big opportunity to profit just because they don’t know what’s going on within their network. This will have a wide ranging effect on mobile communications but one thing is certain: LTE will in the end benefit all the stakeholders involved by allowing more granular control over quality and service delivery.