How mobile broadband operators can grow their markets without being punitive

Mobile operators around the globe have discovered the beauty of mobile broadband access plans and their ability to drive revenue, but their zealousness in pushing USB modems and subsidizing laptops is beginning to reveal an ugly side. Some power users are beginning to push the envelope on consumption. Operators have struck back with data caps and are charging steep per-megabyte fees for going over.

To me, there is one problem: Customers want to use their mobile Internet connections the same way they use their wired ones, complete with VoIP calling and other popular bandwidth-hogging applications such as peer-to-peer file sharing. Moreover, there are questions as to how much operators can grow the mobile broadband market by instituting data caps. During the CTIA Wireless 2009 show earlier this month, AT&T announced a market experiment in Philadelphia and Atlanta to subsidize netbooks in the $50 to $100 range. The big caveat, however, is that data usage on the 3G network is being capped at 200 MB to 5 GB per month, depending on the plan.

John Jackson, vice president of research with CCS Insights, believes data pricing like this is "not an appropriate recipe for transparency that will trigger the inflection point for this market." He noted operators like AT&T will be experimenting with these offerings to find what is palatable for data pricing and capping.

That's why a host of vendors are beginning to come out with solutions that serve as alternatives to data caps. Camiant, which provides policy control software and bandwidth management systems for broadband, recently conducted a study with an international telecoms consultancy that concluded mobile broadband operators can realize upwards of 20 percent savings on their network costs by actively managing mobile broadband congestion.

What does that mean? Camiant's flagship deployment of this concept is with Vodafone Hungary. The solution dials back a subscriber's usage to 2G levels during times of heavy congestion. At other times, users can exceed their usage caps at full 3G bandwidth. This "soft cap" gives Vodafone the ability to manage high usage periods while offering an upgrade path for customers who want to pay for a higher level of service to guarantee 3G speeds during peak traffic hours.

Randy Fuller, vice president of business development with Camiant, said the 20 percent savings associated with managing bandwidth didn't come at the cost of total gigabytes delivered. That number only goes down by about 5 percent. "The key variable to making sure broadband is profitable is managing the peaks. It's not just how much someone uses but when they use it," Fuller said.

This week, HP and Allot Communications announced a partnership to deliver a policy control and charging engine to mobile broadband operators that uses Allot's deep packet inspection (DPI) gateway to analyze all traffic moving over the wireless network. HP's billing and policy platform can then use that information to apply different tariffs, bandwidths or service quality to individual users or applications in real time. That means mobile operators can charge more for certain applications that hog bandwidth.

These policy control solutions are likely to be the hot solutions in 2009 and should be ones mobile operators look to adopt quickly or risk finding themselves a victim of their own broadband success. As voice revenues decline, the last thing operators want to do is put policies in place that keep them from fully exploiting the broadband revolution. --Lynnette

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