WhIte pAper

An Intelligent Approach to Monetizing Mobile Broadband

www.tekelec.com

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

Tekelec Global Headquarters +1.919.460.5500 888.628.5527 sales@tekelec.com

EMEA +44.1784.437000 APAC +65.6796.2288 CALA +1.919.460.5500

Tekelec has more than 25 offices worldwide serving customers in more than 100 countries. Addresses, phone and fax numbers are listed on the Tekelec website at www.tekelec.com/offices this document is for informational purposes only, and tekelec reserves the right to change any aspect of the products, features or functionality described in this document without notice. please contact tekelec for additional information and updates. Solutions and examples are provided for illustration only. Actual implementation of these solutions may vary based on individual needs and circumstances. 2011 tekelec. All rights reserved. the tekelec logo is a registered trademark of tekelec. All other trademarks are the property of their respective owners.

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

Table of Contents
Introduction ................................................................................................4 Monetization Use cases ..............................................................................5 1. personalization: tiered Services ...............................................................5 2. Simplicity: one customer Many devices ..............................................7 3. open ecosystem: Adding Value to over-the-top (ott) Applications .........9 4. casual Usage and loyalty programs ........................................................11 conclusion..................................................................................................13 About tekelec .............................................................................................13 Appendix: Acronyms Used in this document ..............................................14

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

Introduction
Mobile broadband traffic continues to grow exponentially as subscribers increasingly turn to their mobile devices as their primary access to Internet services and applications. by 2015, ovum research predicts that over one billion people will use mobile broadband as their sole means of broadband access. new smartphones, tablets, and machine-to-machine devices are providing a compelling mobile experience by allowing by 2015, ovum research predicts that over one billion people will use mobile broadband as their sole means of broadband access. people to engage their social networks, conduct business, and manage their day-today activities. this new, interactive mobile experience is bringing about a revolution in mobile broadband service models as service providers experiment with innovative ways to monetize mobile broadband, attract and retain customers, and efficiently manage network resources. the new service models are based on four trends: personalization, simplicity, open ecosystems, and casual usage. they depend on a deep understanding of customer profiles, preferences, usage and contextual information, a service focus on the customer rather than the devices they use, and the ability to personalize and add value to overthe-top (ott) applications. gaining this level of insight requires a fundamental shift in the way service providers approach their business. they must transition from being network providers to service and content-enablers, leveraging key assets, including subscriber, device, and application intelligence, performance intelligence, location and context awareness, and access network awareness (Figure 1).

Subscriber Intelligence

$
Device Intelligence Location and Context Aware

Access Network Aware

$
Performance Intelligence

$
Application Intelligence

Figure 1. Key Assets of a Service and Content-Enabler 4

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

by combining these assets with sophisticated monetization tools such as policy-based quality of service (QoS) and quota features, identity management, open application interfaces, and performance analytics, service providers can deliver innovative, revenuegenerating services. this paper highlights four use cases that illustrate how service providers can implement an intelligent approach to monetizing mobile broadband, including: personalized service tiers, simplified services for the multi-device customer (one customer/many devices), adding value to ott applications, and casual usage and loyalty programs.

Monetization Use Cases

1. Personalization: Tiered Services
tiered services enable service providers to deliver plans that link a customers usage and preferences with what they pay for the service. For instance, premium business customers want to ensure that they are getting network priority at all times, while basic customers are willing to accept limited access to services when the network is congested or at certain times of day or locations. tiers also provide more transparency into service usage and cost, creating opportunities to increase revenues as usage increases. by combining network and subscriber intelligence with sophisticated policy management tools, service providers can meet the requirements of different customer and market segments with a variety of personalized service tiers that include: Bandwidth tiers: tiers are based on how much bandwidth a customer uses. one example is charging $15 for 200Mb and $25 for 2gb. In this case a bandwidth quota is assigned to the customer. When the quota is reached, they are notified and offered a temporary bandwidth boost or a promotional offer for the next service tier. Application-based tiers: customers pay based on application usage. For example, the service could include 10 videos per month and 20 hours of gaming services with unlimited social networking for a set fee per month. this approach can appeal to a greater range of customers as it defines services in a way that reflects how customers use applications. each application is assigned a quota, which can be configured separately on a time or volume basis. Applications can also be zero-rated to allow for unlimited usage. Usage analytics and subscriber data can be used to target different customer segments with personalized offers. Speed-based tiers: Service plans are based on average speeds such as $60 for 5 gb at 1.4 Mbps. Service providers can also up-sell a speed boost for a limited period of time on demand to increase loyalty. Speed-based tiers also make cheaper plans accessible to more customers. As an example, service providers can offer a prepaid plan with a low connection speed for customers on a limited budget or a plan for the casual user, who wants occasional high-speed access. policy rules are set based on subscriber service 5 by combining network and subscriber intelligence with sophisticated policy management tools, service providers can meet the requirements of different customer and market segments with a variety of personalized service tiers.

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

profiles captured in the subscriber data management (SdM) system. Analytics can be applied to target different customer segments. time-based tiers: tiers are defined by the number of minutes the customer spends on the mobile data network. In this model, QoS is essential to ensure that the user is not penalized by slow network speeds. this method can also be used to manage network congestion, using analytics to determine peak usage periods and policy rules to apply different rates based on time-of-day and service tier. device-based tiers: In this approach, policy rules are applied to prioritize service delivery on certain devices such as smartphones, which often generate higher revenue per user. device profiles captured in the SdM system are used to apply the rules. In all of these models, providing customers with notifications through messaging and usage monitoring solutions is important to help them understand how their usage relates to what they are being charged and how their priority service is performing. this visibility is critical to ensuring customer loyalty. Figure 2 shows how application-based service tiers are implemented in the network:

3
Policy Server

Application Server

4 SPR

5 PCEF (GGSN/ PGW) 6

Figure 2. Application-based Service Tiers

1. Application service tiers defined in tekelecs Subscriber profile repository (Spr) 2. Application server initiates application session 3. Application server triggers a policy request to begin quota 4. tekelecs policy Server (pcrF) performs real-time quota management for each application 5. When the application usage limit is reached, the policy server sends a policy decision to the policy and charging enforcement Function (pceF) 6. customers notified that they have reached their limit and redirected to a portal to get a temporary limit increase or to select the next service tier 6

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

2. Simplicity: One Customer Many Devices

According to ovum research, there will be three billion big-and small-screen mobile broadband connections globally by 2015. A significant part of this growth will be driven by the increasing numbers of consumers that own multiple connected 3g and 4g devices such as laptops, smartphones, and tablets. Multi-device customers create challenges for service providers, which mainly offer device-based plans. owning multiple devices also creates complexity for the customer, who may have a separate service plan for each device or multiple devices and plans within a single household. For these customers, device-based plans are not in synch with what they need. Setting up multiple plans and managing multiple connections can discourage adoption for the customer, who wants to use certain devices at certain times in certain places. the growth in usage of machines with embedded wireless sensors such as appliances, alarms, and smart meters will add further complexity to device-based approaches. Service providers have the opportunity to evolve from device-centric to customer-centric mobile broadband services by providing customers with one plan that spans many devices. this approach combines subscriber and device data management to assign multiple device identities to one customer profile. It also uses performance analytics to track and analyze customer and group usage with advanced policy management techniques (Figure 3) that include: Quota pooling to share one quota across multiple devices based on time, bandwidth, or application usage. For example, a family of five members can share a 5 gb quota per month regardless of the device used. Multiple concurrent quotas across different devices such as 20 videos, unlimited social networking and web browsing, and 200 hours of voice over Internet protocol (VoIp) calls per month. Quota top-ups and monthly roll-overs for a group or family plan. Enhanced notifications to the customer on multiple device usage. Simplified plans with fewer subscriptions can accelerate the monetization of mobile broadband services and provide greater transparency into group usage. they also reduce costs by simplifying and reducing billing requirements. Service providers have the opportunity to evolve from device-centric to customercentric mobile broadband services by providing customers with one plan that spans many devices.

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

3 SPR 4 5 2
Policy Server

SMSC

1 Internet DPI 9 PCEF (GGSN/ PGW) 2

Repeat steps 1-9

Figure 3. Advanced Quota Applications

1.

gateway gprS support node (ggSn) signals policy Server upon device 1 session establishment

2.

policy Server queries tekelecs home Subscriber Server (hSS) for the static subscriber information

3. 4. 5. 6.

hSS sends subscriber profile to policy Server policy Server queries the Spr for dynamic subscriber information Spr sends all total and remaining quotas to policy Server policy Server installs policies for subscriber on ggSn (per-access point name [Apn] and per-bearer quota grants); ggSn begins tracking usage

7. 8.

deep packet Inspection (dpI) signals policy Server on traffic detection policy Server installs policies for application control on dpI (per-application quota grants); dpI begins tracking usage

9.

device 1 consumes data

note: repeat steps 1-9 for device 2.

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

3. Open Ecosystem: Adding Value to Over-the-Top (OTT) Applications

the global smartphone application market is expected to exceed $8.5 billion in 2011 and grow to more than $26 billion globally by 2014, according to the Yankee group. over-the-top applications offer significant monetization opportunities by enabling service providers to enrich and personalize a wide range of applications with subscriber profile and usage data, presence and location information, payment and rating services, and analytics. Using ott applications, service providers can charge subscribers for enriched applications and priority delivery of preferred content. they can also benefit from revenue sharing by providing customer intelligence, performance and usage analytics, and customer service to application and content developers and mobile advertisers all while respecting customer privacy through governance rules and opt-in policies. For example, a service provider can provide targeted advertising from local retailers with the option to purchase a sports game service to a customer at a sporting event using a mobile video application. realizing the potential of ott applications requires a dynamic, intelligent network with the following capabilities: A consolidated, real-time view of the customer, including profiles, preferences, location, presence, network, device, applications, service entitlements, and usage provided by a scalable SdM system. guaranteed QoS for ott applications provided by advanced policy management features such as application prioritization, enhanced multi-service rating, and zero-rating. enhanced performance analytics for applications to measure usage, network performance, location and demographic trends, insight on revenue-generating transactions, device performance, and other data that is valuable to application providers and advertisers and can improve service uptake. network and service application interfaces that expose internal assets to advertisers and application providers such as QoS for video and subscriber data and analytics for advertising segmentation and application personalization. there are two general approaches that can be used to enrich ott applications. the first makes use of dpI within the network to enforce rules and collect information on application data streams. Figure 4 illustrates a typical implementation that uses dpI. over-the-top applications offer significant monetization opportunities by enabling service providers to enrich and personalize a wide range of applications with subscriber profile and usage data, presence and location information, payment and rating services, and analytics.

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

SPR/HSS

2 3
Policy Server

OCS

Internet DPI 7 PCEF (GGSN/ PGW)

Figure 4. Over-the-Top Applications with a DPI-based Architecture

1. 2. 3.

ggSn signals policy Server on session establishment policy Server queries the Spr/hSS for the subscriber profile Spr/hSS sends subscriber information and/or monthly/remaining quota to policy Server

4. 5. 6.

policy Server installs policies for subscriber on ggSn (bandwidth, quota) dpI signals pcrF on application detection policy Server installs policies for application control on dpI (application-specific QoS, entitlements, rating)

7.

User engages application

10

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

4. Casual Usage and Loyalty Programs

the convenience and flexibility of on-demand, casual mobile broadband services combined with special rewards are a compelling way for service providers to attract new customers and increase the loyalty of existing customers. Some examples of these offers include: Service passes that provide access to specific services and applications for a set amount of time or bandwidth usage such as a roaming day pass for travelers or 2 gb of video and unlimited web browsing for the day. loyalty programs that make customers feel special and reward targeted customer segments. these include birthday and service anniversary bonuses, free service top-ups twice a year, speed boosts, unlimited bandwidth during off-peak hours, or an extra five gb of data for six months with the purchase of a new tablet. Special promotions to accelerate the adoption of new services or encourage different mobile usage patterns. promotion examples include unlimited access to a new application for three months funded by advertisements, discounts on service tier upgrades, or unlimited services at certain times or days when the network is underutilized. these programs require policy and SdM to meter multiple usage limits per customer and to zero-rate services based on application, time, and volume for different customer segments. performance analytics are used to track usage, assess the impact of different service models on loyalty and customer acquisition, and evolve services. one of the key challenges in offering these types of services is costly modifications to online charging systems. Many of these services can bypass the charging system by using the rating engine in the policy server. In this scenario, the monetary rating associated with a unit of data or time is pre-assigned, without the need for an online charging system. the implementation of a pre-rated casual service is shown in Figure 5.

11

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

5 SPR/HSS 2 Policy Server 3 7 Self-Care Portal 6

Billing 4

PCEF (GGSN/ DPI/MIG)

Figure 5. Casual Services 1. policy enforcement point ggSn, dpI, or mobile Internet gateway (MIg) sees new packet data protocol (pdp) context and asks policy Server for appropriate rules 2. 3. the policy Server checks Spr for entitlements; Spr returns unknown device the policy Server replies to policy enforcement point to redirect the customer to the casual use portal 4. 5. 6. 7. User selects day pass package the rating engine in the policy Server and the Spr are updated the Spr notifies the policy Server of new quota and other rules the policy Server instructs the policy enforcement point to allow data under new rules

12

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

Conclusion
Service providers have a unique opportunity to become service and content enablers. by unleashing network and subscriber intelligence using performance, policy, and subscriber data management capabilities, they can accelerate the monetization of mobile broadband services. new services that are personalized, centered on the customer rather than the device, and leverage casual usage and loyalty add value to open application ecosystems and create a path to drive revenue growth and greater service adoption.

About Tekelec
tekelec enables billions of people and devices to talk, text and access the Web. our portfolio delivers a unique layer of intelligence allowing service providers to both manage and monetize the exponential growth in data traffic and applications. tekelec has more than 25 offices around the world serving customers in more than 100 countries. For more information, please visit www.tekelec.com.

13

An IntellIgent ApproAch to MonetIzIng MobIle broAdbAnd

Appendix: Acronyms Used in This Document

AM Apn dpI ggSn hSS MIg ocS ott pceF pcrF pdp pgW Qoe QoS SdM SMS SMSc Spr VoIp Application Manager Access point name deep packet Inspection gateway gprS Support node home Subscriber Server Mobile Internet gateway online charging System over the top policy and charging enforcement Function policy and charging rules Function packet data protocol packet gateway Quality of experience Quality of Service Subscriber data Management Short Message Service Short Message Service center Subscriber profile repository Voice over Internet protocol

14

www.tekelec.com