Don’t Be a Dumb Pipe: Monetize With Smart Policy Control

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Operators today are involved in a vicious cycle of adding bandwidth in order to support bandwidth hungry applications, which in turn is spawning even hungrier applications. This is driving operators to deploy next generation technologies such as LTE, which is proving to be one of the biggest “spends” in the history of telecommunications. The problem is that the operator’s Average Revenue Per User (ARPU) is not increasing at the same rate as the demand for mobile broadband, driving the need for operators to innovate to maximize revenue and optimize CAPEX and OPEX.

Part of the savings is coming from technologies such as Self Organizing Network (SON) and advanced Radio Resource Management (RRM), which are helping operators automate every stage of the network lifecycle. Offloading data traffic via small cells such as femtocells is also helping to significantly reduce the pressure on the core network, and thereby reduce costs.

But to truly innovate, operators need to think beyond cost-centric measures and employ revenue-centric methods that can help them boost their ARPU based on the consumption pattern of the subscribers. In other words, they need to find a way to manage intelligent traffic based on tiers, roaming status, network congestion, and access to content. This can be done by using PCRF (Policy Charging and Rules Function). PCRF plays a very important role in ensuring the most profitable dissemination of services based on usage characteristics. It should help operators achieve the following benefits.

  • Provide better control on data delivery to user equipment and subscribers: A good policy control and management solution should provide control over the kind of services being delivered based on both the cost of the service and the specific applications being accessed. For example, a user on a premium data plan should receive maximum bandwidth at all times
  • Establish a mechanism to earn higher revenue rather than a flat charge: A flat rate structure is one of the primary reasons for eroding ARPU. Tiered pricing based on consumption patterns provides a solution to boost ARPUs. A policy control solution provides value added features such as adjustable bandwidth that can be tweaked to provide different packages to different kind of users. This allows the operator to charge subscribes based on their usage pattern.
  • Allow charging based on the type of content: Content providers don’t charge for content and applications based on the bandwidth they consume. Depending upon the need it fulfills, content may have a high premium or it gets extensively downloaded by a huge subscriber base. Operators in such cases need to ensure that they get a fair share of the revenues when such content is being downloaded and shared on their network.
  • Allow charging based on the type of devices and applications: The behavior of the applications sometimes varies based on the platforms and operating systems being used. For example, an application may behave differently on an Android device as compared to an iPhone. Operators need to study the data access behavior and control usage of such applications to monitor and control their access to networks. Also, certain data hogging applications that are in an “always on” state need to be prevented from accessing the network.
  • Give the ability to pre-empt lower priority data sessions: If a user has requested a higher priority service like emergency calls, and the entire available bandwidth is already being used by existing sessions, then a policy control solution should enable an operator to arrange higher priority sessions accordingly. This may result in the pre-emption of lower priority sessions for same or different users.
  • Enable temporary availability of bandwidth in case of a sudden surge in demand: Sudden surges in demand for bandwidth may occur on certain occasions. A comprehensive policy control solution provides the operator with a mechanism for data control across the network. This ensures that all subscribers get the promised levels of service based on their data plans and usage patterns.

Next generation networks will provide the increased capacity the consumers require, but ensuring that the operators receive the desired return on investments will entail ensuring that the policy and charging control solutions have been designed to offer the necessary control and scale needed. The solution needs to be easy to use, should be able to map to all possible use cases and should be flexible enough to be tweaked based on customer requirements. These systems are open to interpretation and optimization based on the expertise and experience of software vendors. It would take the combined expertise of OEMs and software vendors to create an integrated and well planned network that will enable the operators to optimally monetize next generation networks while at the same time delivering the promised user experience and quality of service.

Photo by Fedorov Olesky / Shutterstock

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