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August 04, 2011

The Road to LTE - Delivering Profitable Future 4G Services

The promise of the mobile broadband service on LTE networks is not just about delivering faster speeds but, more importantly, improving the subscriber Quality of Experience. Imagine videos running smoothly on a device without stalling due to buffering or web pages loading without delay. However, as the adoption of Smartphones and connected devices continues to climb, an uplift in data consumption and the expected data congestion that could follow may eventually undermine the increased capacity benefits of LTE.   To address this challenge, operators must employ a multifaceted approach, including empowering subscribers with control over how they use a mobile data service, like setting their own spend thresholds, altering picture quality or enforcing parental control and notifications. These and other creative approaches will be keys to delivering a profitable business model for operators and ensuring a positive QoE for subscribers.

The future of mobile broadband is LTE. There is no doubt that the promise of an all-IP network with substantially increased capacity is an exciting step forward for the industry and consumers alike. As such, the move to LTE is an essential prerequisite for future mobile broadband growth which operators are rightly giving top priority in their investment agenda.

But does the story end there? Is the future of mobile broadband a simple matter of one operator out-investing the other in terms of LTE capacity and coverage? Are we heading towards a market where operators are selling the same (inherently ‘best effort’) IP-LTE service and competing only on price or elusive differentiators such as ‘having the best LTE network in the world’?

We don’t think so. The key thing to realize, in our opinion, is the fact that LTE is essentially an evolution of the delivery mechanism of mobile broadband. It does not fundamentally alter the consumer service. Users will continue to browse, watch video, play games and communicate with each other as they have done before. Operators going forward should, therefore, not compete on LTE, especially LTE networks become more prevalent, but will increasingly need to differentiate and compete on the services running over the network and the interaction consumers have with these services.

Acision believes that any approach to mobile broadband should take the current 3G service into perspective as well as its transition into LTE/4G. Operators should start the transition of mobile broadband from a generic IP-based ‘any’ access service to a differentiated MY-Broadband service, where services are tailored to the individual and ensure a seamless transition into LTE.

Acision believes four fundamental business drivers require attention in the transformation of today’s mobile broadband service and its evolution toward LTE:

  1. Enable carrier grade Quality of Experience: Deliver MY-Broadband – Acision and YouGov research conducted in 2010, and published in “Seizing the Opportunity in Mobile Broadband,” has shown that consumers are evaluating mobile broadband at a service level and have very different views on what the service means to them. Consumers in the U.S. are essentially asking for MY-broadband, and not just ‘any-broadband’ service, regardless of whether it is a 3G or 4G service. The Acision research found that:
    • Over 85 percent of consumers (63 percent yes, 22 percent maybe) are interested in a mobile broadband service that is managed on fairness.
    • Another 80 percent of consumers (69 percent yes, 11 percent maybe) would like the operator to ensure that all videos run smoothly. If this means that quality on a full screen is lower, these consumers find it a preferable trade off.
    • Consumers want a variety of Value Added Services (VAS) including: services notifications (48 percent), customization of the service (46 percent), shared bundle (46 percent), fair bandwidth management (45 percent), spend control (42 percent), content compression (41 percent), priority (35 percent) and roaming (32 percent).
    • A very notable segment of consumers in the US market, 41 percent, indicate they would prefer all content to be compressed (images and video) in order to extend the use of their bundle.
  2. Avoid inflated service experience at LTE introduction – With the introduction of LTE, operators could be tempted to offer all available capacity to early adopters of the service without any restrictions in place. This would lead to an artificial service experience as these few users would have close to unlimited capacity. As the penetration of LTE starts to rise, users will only experience a gradual decline of the service as more users compete for LTE resources.  We believe a sustainable introduction of LTE will manage the maximum available levels of capacity from the moment of its introduction. This will avoid the inflation of expectations in the introductory stage of LTE resulting in higher satisfaction levels as the service matures.
  3. Address unavoidable bottlenecks – The fundamental nature of mobile broadband means that it will continue to lead to unexpected bottlenecks in the network. Events such as network congestion are simply unavoidable, whether the network is 3G or 4G and operators should have the capability in place to mitigate the effects of such bottlenecks and take a targeted approach to address and avoid them. Being able to identify the specific consumers and the types of services they are using which cause these issues is key to avoiding and/or mitigating bottlenecks.
  4. Ensure maximum profitability – In the end, the long term success of mobile broadband providers will be driven by the level of profitability that they will be able to achieve. An essential element in achieving maximum profitability will be the most efficient use of the 3G and 4G networks. The 3G network will be in place for a number of years to come and should be utilized to its fullest extent before being written off. The ability to support as many consumers as possible using the minimum amount of network capacity will also be the key equation to leverage when moving into 4G. Having the capability to manage the network in terms of services, consumers and locations will be essential in achieving this.

These four business drivers require mobile broadband control capability to be in place on top of the investment in network capacity.  This way, operators will be able to manage the broadband services on both 3G and 4G networks and will be able to enable a well-controlled transition to LTE. They can deliver to mobile broadband consumers, regardless of the network they are on, what they want by offering differentiated MY-Mobile Broadband services. They will be able to avoid where possible, and address when needed, any bottlenecks in such a way to minimize the impact on consumers. And, finally, it will enable them to maximize Return on Investment (ROI) for LTE network investments as well as the investments made for 3G networks.

Want to learn more about 4G wireless technologies? Then be sure to attend the 4GWE Conference, collocated with TMC’s ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. The 4GWE Conference provides unmatched networking opportunities and a robust conference program representing the wireless ecosystem. The conference not only brings together the best and brightest in the wireless industry, it actually spans the communications and technology industry. To register, click here.


Arie Baak is Director Product Marketing, Acision. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves


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