Monetizing Mobile Broadband

September 24, 2012

The Rollover to Data Plans

This article original appeared in the Sept. 2012 issue of Next Gen Mobility.

Mobile subscribers over the last 20 years have grown accustomed to paying for cell phone usage based on voice minutes. It looks like that era is gone. Mobile operators in the U.S. have introduced tiered service plans based on data usage only. Gone are the myriad service choices that represented a complex combination of voice, text, and data quotas to establish the base plan along with a list of individual feature options. This complexity was especially evident with family plans where line charges, group features and device types added another level of choices.

The new data-centric service plans offer mobile subscribers unlimited voice minutes and texts. Both individual and family plans drop the concept of a line charge in favor of the concept of sharing a pool or bucket of data (GB) up to a plan limit across multiple cellular devices including smartphones, tablets, and data modems. In addition, Wi-Fi hotspot-capable smartphones can provide access to the shared data pool without additional tethering charges.

This shift in service provider thinking clearly helps them to monetize the investments they are making in 4G networks. But does it represent value to their mobile subscribers? In general, data-centric plans represent higher costs for subscribers, although it makes what they are paying for clearer. Data-centric plans still put the burden of quota management on the subscriber, sometimes resulting in costly overage charges. Other subscribers will not be reaching their quota limits and not getting enough from their data service plans. All bytes do not have the same value to subscribers, especially with rich media content streaming becoming the norm. Personalized services represent a way for mobile operators to tie usage to applications and offer their subscribers value-based pricing.

Those mobile operators who embrace personalized services and actively transition to this model will build a competitive advantage. By augmenting tiered data usage plans with add-on personalized services, operators can introduce new services based on application-based volumes, application categories, application prioritization, subscriber location, day and time, or specific applications and websites. Given a subscriber’s usage profile, these policies can be used to implement intelligent, deliberate charging, with varying rates that re-enforce personalized, value-based service pricing. This can be achieved by implementing a more granular policy creation and enforcement mechanism that can determine in real time the applications in use, the location of the subscriber, the day and time.

Mobile operators already have a significant investment in policy, charging, and billing systems needed to implement personalized mobile services. What is required for service innovation in the future is a close coordination between the management and the policy enforcement systems, including reporting on usage trends that indicate potential new service offerings.

This is accomplished by fast and efficient integration across these network elements with intelligent policy enforcement systems that leverage standards-based interfaces. 3GPP mobile network policy and charging control components – the policy and charging rules function, online charging system, and offline charging system – are already widely used in the world’s most advanced 3G/4G network deployments, and are readily suited to play a role in defining policies used to implement intelligent service charging. Policy formulation is an IPE function that interacts with these network elements to identify and profile subscribers, associating mobile subscribers in real time with IP addresses. Service policy enforcement is accomplished by IPE platforms that are configured in-line with a mobile network’s data traffic to perform traffic monitoring, analysis, and control as well as enable intelligent service charging.

A key aspect of implementing personalized services is recognizing the ever-changing behavior of mobile subscribers and then reacting quickly to create services to address these dynamic trends. The first step in creating new services is to understand where and when mobile subscribers use specific applications on their mobile devices. This informs the marketing teams about mobile usage characteristics to help determine exactly what personalized services to create. The next step is fast implementation of flexible charging models that support creation of personalized services – with service velocity – enabling mobile operators to respond to usage patterns as they happen and seize these new revenue opportunities. Mobile operators failing to deliver service velocity will fall behind and miss new revenue opportunities as a result. The rollover to data plans is a good first step for the mobile industry, but offering personalized services is the next step to mobile service innovation and monetization.

Ken Osowski (News - Alert) is director of solutions marketing at Procera Networks (

Edited by Brooke Neuman

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