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An Intelligent Approach to Monetizing Mobile Broadband
Joanne Steinberg
Thursday, December 1, 2011
According to Google estimates in March this year, more than 40 million users in India access the Internet through their mobile phones. The company is also predicting that this number will increase to 300 million people accessing the mobile Internet by 2015. Further, Cisco has forecasted that mobile data traffic in India will increase by more than 100 times by 2015, growing at a compound annual growth rate of 158 percent.

In India and beyond, new smartphones, tablets and machine-to-machine devices are allowing people to engage with social networks, conduct business and manage their day-to-day activities on the move. This new and interactive mobile experience is bringing about a revolution in mobile broadband service models as providers experiment with innovative ways to monetize their offerings, attract and retain customers, and efficiently manage network resources.

Four trends are driving new service models: personalization, simplicity, open ecosystems, and casual usage. The success of these models depends on a deep understanding of subscribers, service focused on customers rather than devices and the ability to personalize and add value to over-the-top (OTT) applications. Gaining this level of insight requires service providers to make a fundamental shift from being “network providers” to “service and content enablers.”

Personalized Tiered Services

Tiered services enable providers to deliver plans that link customers’ usage and preferences with what they pay. 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, operators can meet the requirements of different customer and market segments with a variety of personalized service tiers that include:

*Bandwidth tiers based on the volume of data a customer uses. One example is charging $15 for 200MB and $25 for 2GB. When the quota is reached, operators can offer subscribers a temporary bandwidth boost or a promotional offer for the next tier up.

*Application-based tiers where customers pay based on application use, such as ten videos and 20 hours of gaming services per month combined with unlimited social networking. This approach reflects how customers use their phones, and operators can zero-rate applications to allow for unlimited usage.

*Speed-based tiers 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 limited periods of time to increase loyalty. Speed-based tiers also make cheaper plans accessible to more customers. As an example, operators 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.

*Time-based tiers are defined by the number of minutes the customer spends on the mobile data network. In this model, quality of service (QoS) is essential to ensure that the user is not penalized by slow network speeds. Operators can also use this method to manage network congestion by applying different rates based on peak hour utilization, time-of-day and other service tiers.

*Device-based tiers apply policy rules to prioritize service delivery on certain devices such as smartphones, which often generate higher revenue per user.

In all of these models, providing customers with usage monitoring solutions and notifications through messaging is important to help them understand how their use relates to what they are being charged and how their priority service is performing. This visibility is critical to ensuring customer loyalty.

Multi-Device Customers

Service providers also have the opportunity to evolve from device-centric to customer-centric mobile broadband services by providing subscribers with one plan that spans many devices. This approach combines customer and device data management to assign multiple device identities to one profile. It also uses performance analytics to track and analyze individual and group usage with advanced policy management techniques 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.

By simplifying mobile data plans in this way with fewer subscriptions, operators can accelerate the monetization of mobile broadband services and provide greater transparency into group usage. In this way, service providers can also reduce their costs by simplifying and reducing billing requirements.

Adding Value to Over-the-Top Applications

Over-the-top applications offer significant monetization opportunities; Google estimates that Indian mobile users download 30 million applications per week. 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’s privacy through governance rules and opt-in policies. Realizing the potential of OTT applications requires 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 – all of which 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.

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 subscribers and increase the loyalty of existing customers. Offers could 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 subscribers feel special and reward targeted customer segments, like birthday and service anniversary bonuses, speed boosts and unlimited bandwidth during off-peak hours.

*Special promotions to accelerate the adoption of new services or encourage different mobile usage patterns. Examples include unlimited access to a new application for three months funded by advertisements or unlimited services at certain times or days when the network is underutilized.

These programs require policy and subscriber data management to meter multiple usage limits per customer and to zero-rate services based on application, time and volume for different customer segments.

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.

Joanne Steinberg is a seasoned technology industry professional with over 20 years of experience working in Canada, the United States and Europe in the telecommunications and information technology sectors as well as for the Government of Canada. Her roles have ranged from strategic marketing and business development, to economic and technology policy.

The author is Director of Strategic Marketing, Tekelec.

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