Personalizing, Monetizing and Optimizing Mobile Services

As mobile operators adopt all-IP network architectures to deliver mobile broadband services, traditional ways of engaging with customers will give way to innovative approaches that establish new business models and transform the customer experience. Some of the most exciting opportunities will come when operators personalize service offerings by integrating intelligence from the network with applications to create premium value-added services.  These services can be tailored to the interests and preferences of individual customers, unlike the standardized usage based or flat rate plans offered today.

Operators have a pressing need to personalize their services because they must now compete not only against their traditional mobile rivals for customer loyalty, but against leading Internet firms and content providers as well.

"Obviously there is a need for mobile operators to adjust to the changing situation in the communications industry. It is no longer a telecommunications-centric industry, it is an Internet-centric industry," said Joe McGarvey, principal analyst for IP services and infrastructure at Current Analysis.

One adjustment operators can make to better compete in this new environment is to harness the intelligence available in their networks to deploy differentiated services, such as features customers can use to configure their own services, which will help build loyalty, improve market share, increase average revenues per user and reduce churn. Wireless IP-based architectures will introduce many new, sophisticated network capabilities that operators can exploit to pursue these business objectives. A strategic use of network intelligence, such as analytics that anticipate customer needs and desires, combined with real-time policy and service control, embedded network-based applications and the intelligent use of optimization tools, can help operators differentiate their services to customers to gain market advantage in this new competitive era.

Operators also need to invent new business models because existing models, such as flat-rate pricing for data services, are not sustainable.  According to new research from Alcatel-Lucent's Bell Labs, mobile data traffic on a typical network is increasing at a 52% CAGR yet data ARPUs remain flat, unaffected by this traffic growth. And while service providers' capital costs per bit to deliver data services are actually decreasing, thanks to higher throughput and efficiencies in new networks, the overall costs to provide data services, if handset subsidies and overhead costs are considered along with capital costs, are increasing very rapidly and will exceed data ARPUs this year.

One approach operators can use to correct this problem is to combine the intelligence and application enablement capabilities available in an Alcatel-Lucent High Leverage Network^TM to create tools that individual customers can use to configure their individual rate plans in ways that are acceptable to them, said Gary Leonard, Senior Director Wireless IP Solutions.

"Today's services are best-effort and rate plans are simple," Leonard said. "The monetization and personalization options that will be introduced moving forward will be far more flexible and sophisticated and offer a win-win outcome for customers and service providers."

For example, operators will be able to develop strategies that enable consumers to determine their own service capabilities and in some cases their own personalized pricing plans. Such approaches improve customer satisfaction and loyalty to help reduce customer churn, while the operator can monetize each packet delivered to improve overall ARPU.

Compelling monetization examples include targeted service value plans, which enable the customer to pay only for content they desire and consume, and value-added plans with incentive or reward programs that operators can offer customers in partnership with business affiliates such as developers, advertisers, and content owners.  This new ecosystem of partners will help an operator differentiate its services, yet the operator can retain its central role in the ecosystem.

Real time policy control, intelligent traffic management, network-based applications and the intelligent application of optimization tools will play important roles in planning and offering various personalization and monetization strategies, Leonard said

The use of subscriber and application data management tools along with the payment and charging components implemented in the network will also be necessary.

Intelligent traffic management and optimization can be used to observe how subscribers use personalized services. This subscriber intelligence can then be leveraged by the operator to build more personal relationships with the subscriber. It can be applied thorough the network's policy controller to manage relevant resources so that the customer enjoys the best possible user-experience and that network resources are used efficiently. Optimization tools can also be used to tailor how specific services are offered, such as video, to create differentiated services that operators can charge for. 

Payment and charging features will require new rating mechanisms, such as pricing based on volume, time of use, elapsed time, type of application or content; value-added options such as data speed choices, alternate access mechanisms like Wi-Fi, data sharing, free music or video, and tethering; and fair-use methods such as data speed enforcement, overage fees, priority reductions, quota purchases, or peer-to-peer controls.

Some of the network components Alcatel-Lucent offers that can be deployed as part of a High Leverage Network^TM architecture to create these differentiating services include its Intelligent Traffic Management (ITM) solution.  The ITM solution combines the most recent releases of two commercially available products, the 9900 Wireless Network Guardian and 5780 Dynamic Services Controller. As individual components, the WNG has been adopted by AT&T Mobility, China Mobile, and Telecom New Zealand. The DSC has been adopted by Etilasat in the UAE and in Sri Lanka, and by VimpelCom in Kazakhstan.