Computaris and Ovum – Strategic Drivers for Early to Market Policy


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Computaris and Ovum presentation on the benefits of early Policy Management adoption

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Computaris and Ovum – Strategic Drivers for Early to Market Policy

  1. 1. Strategic Drivers for Early to Market Policy
  2. 2. Mobile Broadband Market Status & OutlookThe opportunity: Connection growth continues Mobile broadband (WCDMA, TD-SCDMA, HSPA, CDMA 1xEV- 4,500,000 4,000,000 Big-screen reaches DO, LTE, Mobile WiMAX) connections (000s) 724m in 2016 (20% 3,500,000 CAGR 2011-16) 3,000,000 2,500,000 2,000,000 1,500,000 Small-screen reaches 3.2bn in 2016 (24% 1,000,000 CAGR 2011-16) 500,000 Growth overtakes big- screen from 2013 0 2009 2010 2011 2012 2013 2014 2015 2016 Small-screen (handsets) Big-screen (USB modems, datacards, laptops, netbooks, tablets)Source: Ovum
  3. 3. Mobile Broadband Market Status & OutlookThe impact on the customer: Data, data everywhereSource: Ovum
  4. 4. Mobile Broadband Market Status & OutlookThe impact on the customer: A shift in the way we consumecontentSource: Ovum
  5. 5. Mobile Broadband Market Status & OutlookThe impact on the customer: Data tariffs everywhereSource: Ovum
  6. 6. Mobile Broadband Market Status & OutlookThe impact on operators: Every silver lining has a cloud• Global mobile data traffic grew 2.6-fold in 2010, nearly tripling for the third year in a row – Mobile data traffic [in 2009] was three times the size of the entire global Internet in 2000‘• Global mobile data traffic will increase 26-fold between 2010 and 2015 – Two-thirds of the worlds mobile data traffic will be video by 2015 – Mobile-connected tablets will generate as much traffic in 2015 as the entire global mobile network in 2010Source: Ovum
  7. 7. Mobile Broadband Market Status & OutlookThe impact on operators: Revenues not growing at thesame rate as connections Mobile broadband (WCDMA, TD-SCDMA, HSPA, CDMA 1xEV- $250,000 Big-screen reaches DO, LTE, Mobile WiMAX) revenues ($ million) $50bn in 2016 (12.6% $200,000 CAGR 2011-16) $150,000 $100,000 Small-screen reaches $50,000 $167bn in 2016 (18.1% CAGR 2011-16) $0 2009 2010 2011 2012 2013 2014 2015 2016 Small-screen (handsets) Big-screen (USB modems, datacards, laptops, netbooks, tablets)Source: Ovum
  8. 8. Mobile Broadband Market Status & OutlookThe impact on Operators: LTE is no ‘killer app’ &competition is already intensifying• Differentiators are hard to find, so 100 129% 95 140% pricing will remain key 119% 121% 90 87• Operators are only able to charge 79 120% an LTE premium over 3G/3.5G for 80 % premium charged for 4G a while 70 100% Monthly fee (US$) – < 20% in Asia / >100% in Europe 60 80%• Plans emphasize high data speeds, esp. Europe 50 43 38 60% 40 36 – Quality & consistency of user experience are powerful 30 40% differentiators, but it is difficult for users to compare 20 20%• Devices offer differentiation in the 10 short-term 0 0%• Segmentation by peak speed Tele2 Telenor Telia encourages take-up Monthly fee of high-end 3G package up to – E.g. Vodafone Germany 16Mbps (US$) Monthly fee of high-end 4G package up to 80Mbps (US$) Premium charged for 4G (%)Source: Ovum
  9. 9. Mobile Broadband Market Status & OutlookThe impact on Operators: Operators won’t benefit fromcontent & apps growth $450,000 9,000 7,000,000 (not including advertising) ($ milion) - DRAFT Total paid for application downloads (000s) - End-user revenues from paid-for downloads Mobile operator serrvice revenues ($ million) $400,000 8,000 6,000,000 $350,000 7,000 5,000,000 9% of data revenues 6,000 $300,000 in 2009, falling to 6% 4,000,000 DRAFT $250,000 in 2016 (0.65% CAGR 5,000 2011-6) 4,000 3,000,000 $200,000 Total ops & 3rd 3,000 $150,000 parties revenue 2,000,000 2,000 hits 8.4bn in $100,000 2016 (CAGR 1,000,000 1,000 2011-6 16%) $50,000 0 0 09 10 11 12 13 14 15 16 $0 20 20 20 20 20 20 20 20 09 10 11 12 13 14 15 16 20 20 20 20 20 20 20 20 End user revenues from paid for downloads 2G data access Mobile broadband (not including advertising) Total paid for application downloads Value-added services MessagingSource: Ovum
  10. 10. The impact on Operators: Complex ecosystems Mobile Mobile Industry Specialist Industry associatns research associations bodies Charities/ NGOs Regulator telecoms banking Government aid agencies Banks Enablers / intermediaries Enablers / intermediaries Technology vendors Device Vendors Mobile Operators MNOs MVNOs Agents & ResellersSource: Ovum
  11. 11. Mobile Broadband Market Status & OutlookThe impact on Operators: Business models must change Excessive data usage must be paid forService bundling is becoming critical The end of unlimited? Mobile revolution Fair Usage Policies
  12. 12. Key Messages • There is undoubted demand for mobile data • Network investment must increase • Customers can look elsewhere • LTE is not a panacea • Long-term & Evolution are the key words • New Business models & ecosystems
  13. 13. Technology & Network EvolutionAccessspeed100M Play online Streams video games File sharing Download movies11M Web search5.8M Streams music1M384k Internet News online IM banking Social Internet browsing networking Read blogs9.6k Web search Email 2G 2.5G 3G 3G+ 3G+ 4G GSM Edge UMTS HSDPA HSPA+ LTE
  14. 14. Mobile Data Consumption DriversThree main drivers • Customers expect a seamless experience regardless of device • Online services worldwide are increasing cutting deals with content providers
  15. 15. Current Challenges in Mobile Data Supply• The ‘capacity crunch‘ is recognized by • Anticipating traffic patterns & building most operators traffic models• Growth in demand for capacity has • Managing traffic load while increasing exceeded the growth in supply service personalization• Revenue is no longer connected to the • Striking a balance between network & cost model; flat rate is no longer a viable pricing policies option• User expectation of mobile broadband is • Ensuring QoE for the increasing demand set by their experience with fixed for quality video experience & enhanced broadband monetization• OTT providers are launching bandwidth intensive applications• Mobile networks are experiencing more capacity issues
  16. 16. Policy Management ObjectivesWhat’s Policy all about Dynamic • Differentiated access to services decisions • Allocation of network resources to better manage congestion burdens Decisions • Subscriber profile, location, equipment based on • Network capacity • Source & type of traffic Applicable • Any IP application for • Mobile, wireless & cable/broadband Bill shock Content Charging Fair Usage Premium services QoS Location Based Policy Charging Charging Enterprise/ Spending Parental Control rewards Congestion Service Mgnt personalization
  17. 17. Policy ManagementFrom network-centric to subscriber-centric approach• Congestion control Monetization Differentiation • Complex spend control• Load balancing • Resource prioritization• Optimized routing • Dynamic up-selling Parental Bill shock control Prioritization Congestion Subscriber self Management care and personalization Application Fair Usage bundles Control Service limited pass
  18. 18. Evolving ServicesNew requirements By Subscriber profile By Application By Access method By Device By Volume By Time Blackberry IPhone Key Set Allocate Heavy applications priorities number usersBasic Parental control Spending Business Gamers reward Bill control Premium services
  19. 19. New Business ModelsConsumer electronic devices – future growth of mobilecomms
  20. 20. Policy ManagementEmerging Markets – Need for Congestion free Networksand Traffic Monetization Mobile data usagePricing Network
  21. 21. Policy ManagementEmerging Markets Status 4,500 Global mobile broadband connections (millions) 4,000 3,500 3,000 2,500 of which big-screen 2,000 of which small-screen 1,500 1,000 500 0 2010 2011 2012 2013 2014 2015 2016• Transition to 3G and LTE begun• Limited CAPEX to increase coverage• Internet penetration in emerging markets:10%• Data services cost at least twice in emerging markets comparing to mature markets• Broadband pricing is low• In several emerging markets data services are already charged using usage based models
  22. 22. Policy ManagementMature markets – Need to reduce data delivery costs• Reduced data delivery costs evolving to 3G/4G, implementing policy control & optimizing the network• Need for tiered, dynamic, usage based pricing and charging• Tiered services• Mobile advertising & mobile commerce on the corner• Challenges in terms of product innovation, infrastructure investment monetization & costs optimization • Growing 3G/LTE penetration • Lowe cost Smartphone and high concentration in urban areas • Increasing bandwidth demand • Popular mobile applications and flat rates
  23. 23. Strategic drivers for policy adoptionFunctional footprint POLICY Marketing Improvements Increase ARPU with tiered and evolved data services Assured Monetisation Subscriber Intelligence Revenue assured & flexible Personalised subscriber service service charging experience
  24. 24. Policy ManagementVendor evaluation• Proven experience and references• Cost effective alternative• Multivendor operability• Established solution roadmap• Focused on innovation• Willing to offer knowledge sharing opportunities and training• 3GPP compliant• Can offer a best of breed, tailored made pre-integrated solution
  25. 25. Policy ManagementRecommended approach: implement today a scalablesolution– Carrier-grade, highly extensible and configurable solution, enabling you to adapt it easily to changing business needs– Established roadmap and evolution path to 4G/LTE and for policy convergence across both fixed and mobile– Independent of network infrastructure– Full 3GPP compliant– Contextual, supported by subscriber awareness– Become an active member of VAS and content from the network value chain– Engage in beneficial partnerships– Easily charge for OTT services
  26. 26. Take Away Ideas• Policy management goes beyond managing the supply capacity & should be subscriber centric• New business ecosystems require an entirely new approach – early adoption of a policy management will bring a competitive advantage• To generate new revenue streams, policy needs to be deeply integrated with BSS - particularly with the charging components
  27. 27. Mobile Data AccessibilityMobile Broadband Users Growth: 2010-16• Mature markets are driving innovation, but emerging markets are driving volumes. According to an Ovum forecast, overall mobile broadband users will grow at a CAGR of 28% by 2015.• While growth will continue to be robust in Western Europe and North America, the strongest growth is forecasted to occur in the emerging markets of Asia-Pacific, the Middle East & Africa, with compound annual growth rates exceeding 35%.4,5004,0003,500 Africa3,000 Middle East2,500 Asia-Pacific2,000 Eastern Europe Western Europe1,500 South & Central America1,000 North America 500 0 2010 2011 2012 2013 2014 2015 2016 Source Ovum
  28. 28. How is the future profiling? • Video traffic is doubling every 12 months • By 2015 there will be in use approximately one mobile-connected device for each person from the planet • Smartphones user consume more than twenty times more data than traditional handsets users • 48 million people around the globe have mobile phones even though they don’t have electricity at home
  29. 29. Policy ManagementMobile data monetization use cases
  30. 30. Policy, Charging & Traffic ControlUse cases Market Offer Tiered Priced Quotas Time Based Services On-Demand Capacity Rich Communication Services Machine to Machine Services Cloud Computing Services Per Usage Based Services Service Control Customer Experience Backhaul Reduction Bill Shock Control Roaming Advice of Services & Charge Application Filtering Application Quality of Application Bandwidth Service Control Service Personalization Application Store Partnerships On Demand Activation Pre-pay Control Employee/Parental Control Fixed to Mobile Loyalty Rewards Convergence Service Self-Care Device Based Control System Function 3GPP PCRF 3GPP OCS/OFCS Active Mediation Network Edge Rating 3GPP PCEF (Service Level) Deep Packet Inspection WIMAX CSN Node
  31. 31. Policy ManagementDPI – When and Why Do You Need it?• Monitoring and metering applications• Prioritize, shape and block traffic flows to control congestion• Dynamic resource allocation• Exploit highly valuable information such as: − Most popular applications for each service plan, period, region − Top users per service plan, period − Quota usage• Enforce or restrict OTT applications traffic• Subscriber awareness and quota management
  32. 32. Policy ManagementStrategic drivers − Greater personalization and user control − Enhance management and monetization − Real time network intelligence − Content usage patterns − High value customers
  33. 33. Mobile Service Evolution Broadband Usage Protection Market Segmentation Extend Business Paradigm 2-Slided Business Models On Demand Application (Apps Store QoS & Telco 2.0) Fair Usage, FMC & QoS Capacity&Control Capacity Mngmt. Managed Services Tiered Quota (VoIP, IMS,RCS, M2M) Bill Shock / Usage Mngmt. Policy Management Policy Management Policy Management (Gx, Policy Management (Gx) (Gx), Charging (Ro), (Gx&Rx), Charging Systems Rx, S9) & Charging & Monitoring Monitoring & (Ro&Gy), DPI, (Ro&Gy), Monitoring & Enhancement Monitoring & Enhancement, DPI Enhancement Applicable 2.5G/3G/LTE Visiting/Home PCRF,Mobile 3GPP 2.5G/3G PCRF, PCEF and 2.5G/3G PCRF &DPI OCS/OFCS, PCEF, IMS, GAN and OCS/OFCS Standards AF Minimizing Network CAPEX Network Investment and ARPU Improvement throughFinance And Customer Care OPEX Reducing ARPU Erosion improved value proposition
  34. 34. Copyright @ Computaris Recognized leader Market acclaimed professionals Technology driven company Trusted partner Best of Breed Services Thank you! State of the art technologies Ensure lowest possible operational cost Computaris Delivering the best to the best!