Vaibhav Mehta, Elitecore's VP of new business development, explains how closer collaboration with OTT players will allow operators to get more out of the mobile value chain
How can mobile operators be more than transport providers?
Service revenues in the over-the-top market worldwide are expected to grow at an annual rate of 32% through 2016, reaching $16.4 billion, according to IMS Research. The mobile operator clearly is being left out of the whole value chain, which means the current operator business focus should be to find the right formula that can monetize such services, converting “dumb” pipes into “smart”, revenue-generating pipes.
Mobile operators can do this by cooperating with their OTT ecosystem partners. This basically means having a two-sided revenue model, which focuses on both business-to-consumer and business-to-business revenue opportunities. This route is a win-win not only the mobile operators but also device-makers and OTT players that want to tap the mobile subscriber base. This is where an operator can build a revenue model instead of merely acting as a transport mechanism.
They can jointly introduce segmented services based on the value and strategic importance of particular users. The operators can partner with these OTT providers to offer dedicated quality of service to subscribers for a nominal charge or no charge, and while the OTT providers’ advertisers enjoy a better guaranteed viewership, leading to increased advertisement revenue.
Of course, building such in-depth synergy between the operators and the OTT providers requires a pre-integrated policy manager solution.
With the move to 3G and 4G, what type of policy approach is required to allow operators to monetize new services and boost ARPU?
The onset of 3G and the ongoing move to 4G have seen operators moving away from flat-rate data plans to tiered rate plans. If a capped model is followed, it would deter subscriber experience as a simple high-definition video can easily consume between 1GB and 2GB of data.
In such a scenario operators need to adopt innovative pricing models that are more personalized but at the same time do not lead to network congestion. This is where the role of the policy manager has to evolve to what Elitecore calls a “multi-dimensional level.” The solution goes beyond its basic one-dimensional policy purpose to integrating several multi-dimensional components including charging, billing, business intelligence (BI) and loyalty systems. The objective is to give operators more flexible choices in rolling out innovative use cases based on device, service, subscriber plan, application, usage history and network details.
Examples of monetization in 3G/4G include charging based on events and speed and bandwidth-based tiers.Also to lure subscribers, operators will need to offer affordable pricing.
How can operators start to harness real-time subscriber information without having to transform their entire back-office systems?
An intelligent policy infrastructure is the baseline to monetization of the network. A policy management solution that integrates with BI systems, charging system and billing system enables operators to gain critical intelligence and develop innovative use-cases around it.
A BI system that integrates with various IT systems can provide critical information to the policy management solution so innovative plans based on trends and not just subscriber information can be developed. When integrated with billing system, it enables operators to create plans based on subscriber history and subscriber profile. This is where we think Elitecore differentiates. Our multi-dimensional solution NetVertex policy manager has in-built adaptors that can talk to the BI system, billing, charging, subscriber profile and others.
Why go for a multi-dimensional approach?
The limitation with the traditional one-dimensional policy approach is that it cannot take into account actual usage scenarios relevant for today’s subscriber needs. This is because traditional policy gives the operator no idea of the subscriber’s billing history, priority QoS plans, whether or not the subscriber is eligible for discounts and loyalty points. If the subscriber contribution to ARPU is 110%, then the operator may want to give him 5GB free. If 120% ARPU, then five video downloads may be made available for free.
To make the future policy role relevant with examples like these, Elitecore is calling for a multi-dimensional approach to policy management. This gives our solution the capability to harness critical intelligence from key network and IT systems and not just based on subscriber profile details. This enables service providers to roll out differentiated services and pricing models.
How does this impact an operator's ability to differentiate services and pricing?
A multi-dimensional approach gives operators a better grasp of the network state, billing history and subscriber profile, which means more flexibility in launching and rolling out new services. What’s more, with reduced time-to-market, our solution enables policy conditions to be added or modified in a shorter timeframe via NetVertex’s advanced configuration capabilities.
A multi-dimensional approach to policy management enables operators to launch new services based on the combined context of network state, billing history and subscriber profiles as well as monetize data usage based on inputs from the BI system on latent potential for cross-promotion and up-selling opportunities. It also allows them to personalize the subscriber experience with usage plans designed around subscriber favorites and usage history, and also create profitable partnerships with M2M device manufacturers and OTT providers.
What types of subscriber insight does NetVertex provide mobile operators?
It provides mobile operators deeper insight into several elements of the subscriber including device profile, billing history, usage patterns and service personalization requests. This is possible because NetVertex follows a multi-dimensional approach, as outlined previously.
What are the main challenges in pulling together network data, QoS and subscriber profile into a consolidated view?
With a best-of-breed approach, each application typically maintains its own representation of subscriber and service data, making it difficult to gain a centralized view of the customer and of the service. You can’t really pull them all together for a consolidated view.
In contrast, a pre-integrated platform offers a single, consolidated database across multiple applications. This creates a single source for customer and product information that can feed directly into the policy and charging solution, enabling the operator to make real-time decisions based on factors including subscriber activity, preferences, and history. Also, it shortens provisioning intervals by requiring the operator to define the rules and policies associated with a new service only once, instead of for each individual system.