As featured in TM Froum’s Inside Revenue Management newsletter
There is no doubt that policy management was the hot topic in the revenue management world of 2011. The increasingly sophisticated (sometimes complex) requirements of data packaging and the desire to be able to offer customers a wide range of choice, voice/data combinations and service bundles has been driving the need for tools that can help manage this.
While there are a number of policy management specialist vendors in the market, many offer additional capabilities such as integrated charging, and most offer flexible interfaces to help integrate their offerings with existing charging, rating and network infrastructures. This has led to a number of merger and acquisition activities as key players look to bolster their own product sets.
The result is that policy management has become a heavily contested space and has led to quite a bit of market research into what is being sought after by operators. In the space of three months, Heavy Reading has released two reports on the subject, sponsored by two competing suppliers that have two quite opposing findings. Readers hoping to gain some insight for their own decision making process may come away none the wiser.
The first report headlined in October 2011 with “Research Shows Overwhelming Demand for Integrated Charging and Policy Management Solutions to Address Data Monetization Challenge.” The report, sponsored by Amdocs, went on to say that the recent rise in new data price plans was being driven by the need for service providers to offer customers an improved data experience and to better monetize their investments in network capacity. It also stated that the majority of service providers worldwide planned to introduce family data plans in the next year, and currently lacked the capabilities to enable them.
The research was based on 64 “qualitative” interviews with decision makers in director, VP or CEO roles from 32 service providers from across Europe (13), North America (9) and Asia-Pacific (10) -- from both IT and marketing departments -- conducted between May and July 2011.
Key among the findings was that 80% of respondents did not think their existing policy management systems, deployed to support network-related use cases (bandwidth management, fair usage, bill shock) could support more advanced use cases, such as data plans across multiple lines of business, payment methods and spend limits, and more; and that 10% had tried to integrate charging and policy management systems and failed.
The key finding was that 85% of respondents saw a need to integrate charging and policy management capabilities and that integration between charging and policy management would allow them to offer a better customer experience by introducing plans that relate to the device type, network status, and customer information across all lines of business and other parameters.
Surprisingly, in January 2012, Tekelec published a research, also from Heavy Reading titled “Majority of Tier 1 operators Want Independent Policy Servers that Integrate with Separate Charging Systems.” This survey showed that the majority of Tier 1obile operators planned to integrate policy servers with existing charging and billing systems rather than deploy pre-integrated policy and charging systems from a single vendor.
The Tekelec sponsored survey of 30 respondents in network planning, engineering, CTO, sales, marketing, product development and customer support departments for service providers with revenues above $1 billion. All service providers surveyed had deployed or are in the process of deploying a policy and charging rules function (PCRF) or other standardized policy server.
The report found that “scaling pre-integrated solutions based on proprietary interfaces between policy and charging may be a stumbling block here, especially if it entails high professional service costs.” No surprises there, but the other results seemed to contradict what Heavy Reading had found only three months earlier.
In this report, nearly 70% of Tier 1s said they would use the policy server (a PCRF) to perform some charging or rating functions, and they have run into significant challenges implementing online charging for data. For example, almost 60% cited higher costs due to customization and professional services.
One of the most important policy server buying requirements was real-world experience integrating with third-party charging systems and that only a minority of the Tier 1 respondents said they would deploy pre-integrated policy and charging solutions in the medium term and that the majority was seeking good interoperability and integration of policy with independent charging systems, using standardized interfaces wherever possible.
Despite the anomalies of results from both surveys, and some judicial selective analysis from readers to ignore any potential marketing bias, one thing emerges as a common requirement – that of implementing some form of policy management ‘engine.’ No doubt, we will be hearing more in 2012 from this segment and, hopefully, Inside Revenue Management can bring you some case studies to help operators in deciding which of the two options may be best for them.
Tony Poulos is market strategist at TM Forum