Tuesday, September 14, 2010

The Migration to Mobile 4G Networks

By Monica Paolini, Founder, Senza Fili Consulting

Mobile broadband requires operators to change the way they manage data services. The transition to a 4G IP network will give them the tools to manage traffic actively and achieve three goals:

  • Increase network efficiency and capacity, lowering transport costs
  • Offer service plans that are more flexible, fair, and personalized
  • Maximize revenues from subscribers, applications and content providers, and vertical applications

We just published a white paper sponsored by Cisco on the transition to 4G IP networks.

Mobile broadband is a great success story. After several years of timid growth, mobile broadband adoption has exploded, driven by the concurrent availability of must-have devices like the iPhone and Droid, a myriad of applications that are intuitive to use, and attractive service pricing. The sudden growth in mobile broadband is happening at a time when mobile operators are fighting a slow but inexorable decline in voice revenues and see data revenues as their main hope for maintaining their profitability levels.

Yet for mobile operators mobile broadband is a relatively new service that presents many challenges. Despite its simplicity, the flat-fee model-with or without traffic caps-does not meet subscribers' demand for flexible and personalized data services. Network congestion, poor subscriber experience, and the inability to reach new market segments are among the problems that operators have started to encounter as mobile broadband becomes widely adopted in the consumer market.

On the other hand, operators have unparalleled, but largely under-utilized, access to real-time information about their subscribers and their network. They know where their subscribers are and what they are doing, what their preferences and plan settings are, which devices and application they use. They also have real-time information on traffic levels and traffic flow for each cell site, which allows them to decide whether and how to prioritize traffic. By using this information, operators can expand the potential of mobile broadband services, making them available to a wider range of subscribers and devices, while managing traffic growth, providing a reliable and fair service to subscribers, and protecting their profitability.

In our latest paper, we present a case for a more active management of mobile broadband services that leverages the IP network to pursue three goals:

* More efficient use of network resources. This is required in order to expand network capacity to meet subscribers' demand in a cost effective way, which will enable operators to operate profitably.

* More flexible, fair, and personalized service plans. Mobile operators realize they have to move beyond flat-fee unlimited plans. To improve their subscribers' experience and differentiate their services from the competition, they can add features that allow them to move beyond capped plans.

* Maximize revenues. Flat-fee unlimited plans are not effective at segmenting the market and gaining revenues from added-value services, because for many potential subscribers the available plans are too expensive, or do not offer the features they want. A wider choice in service plans can address the demand from these subscribers, and raise data revenues. Furthermore, mobile broadband can create new revenue streams from advertisers and content and applications providers, and facilitate the development of new business models that make mobile data services more attractive, easier to use, and more effective. Mobile operators can also gain additional revenues from vertical applications, through partnerships with MVNOs, enterprises and public agencies.

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