GDS International - The New Diameter Network Over the Top Applications Clouds and Machines


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By 2016, two-thirds of the world’s mobile data traffic will be video. Between 2011
and 2016, machine-to-machine (M2M) traffic will grow at a compound annual growth
rate (CAGR) of 86 percent and mobile cloud traffic at a CAGR of 95 percent. This
escalating growth in third-party applications and services is radically transforming the
competitive telecommunications landscape. Communication service providers (CSPs)
once dominated the end-to-end service experience. Now, over-the-top (OTT), cloud and
M2M providers are gaining commercial acceptance and upending traditional business
models. They are already siphoning off more than 50 percent of the annual mobile data
applications revenues.To succeed in this intensely competitive market, CSPs have to move up the mobile data value chain. They have to explore new service models by forging value-added business
relationships with OTT application providers. Furthermore, CSPs have to rethink the way
they view their network, optimizing it as a platform for innovation and applications as
well as connectivity.

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GDS International - The New Diameter Network Over the Top Applications Clouds and Machines

  1. 1. WHITE PAPERNew DiameterNetwork: Over-the-Top, Cloudsand Machines Table of Contents Introduction �����������������������������������������������������������������������������������������������2 � The Over-the-Top Opportunity ��������������������������������������������������������������������2 � Quality of Service ����������������������������������������������������������������������������������������3 Analytics and Subscriber Intelligence �����������������������������������������������������������4 The Cloud’s Silver Lining �����������������������������������������������������������������������������4 � Mobile Advertising �������������������������������������������������������������������������������������5 � Bundled Services for Enterprise Customers ��������������������������������������������������5 Consumerization of the Enterprise: Bring Your Own Device ������������������������6 � Mobile Commerce ��������������������������������������������������������������������������������������6 Machine-to-Machine Services ���������������������������������������������������������������������7 � The Network: Platform for Innovation and Applications ������������������������������9 � The New Diameter Network �����������������������������������������������������������������������9 � New Diameter Network Use Cases ��������������������������������������������������������������11 Use Case 1: Virtual Private Enterprise Cloud ������������������������������������������������11 Use Case 2: M2M Cloud �����������������������������������������������������������������������������12 Use Case 3: Monetizing OTT Video Applications �����������������������������������������13 Conclusion �������������������������������������������������������������������������������������������������14 � About Tekelec ���������������������������������������������������������������������������������������������14 Appendix: Acronyms Used in This Document ����������������������������������������������15
  2. 2. New DiameterNetwork: Over-the-Top, Cloudsand Machines Introduction By 2016, two-thirds of the world’s mobile data traffic will be video1. Between 2011 and 2016, machine-to-machine (M2M) traffic will grow at a compound annual growth rate (CAGR) of 86 percent and mobile cloud traffic at a CAGR of 95 percent2. This escalating growth in third-party applications and services is radically transforming the competitive telecommunications landscape. Communication service providers (CSPs) once dominated the end-to-end service experience. Now, over-the-top (OTT), cloud and M2M providers are gaining commercial acceptance and upending traditional business models. They are already siphoning off more than 50 percent of the annual mobile data applications revenues.3 To succeed in this intensely competitive market, CSPs have to move up the mobile data value chain. They have to explore new service models by forging value-added business relationships with OTT application providers. Furthermore, CSPs have to rethink the way they view their network, optimizing it as a platform for innovation and applications as well as connectivity. The Over-the-Top Opportunity Advanced devices and nearly ubiquitous high-speed access have freed subscribers from the confines of wired connections. They’re able to consume content anywhere at any time. That freedom is driving massive amounts of mobile data traffic to popular Internet sites and web-based content. As a result, operators aren’t providing today’s most relevant revenue-generating mobile platforms and applications. OTT companies like Apple, Google, Amazon, Facebook, and YouTube are supplying them. Over 200 million people have Apple iTunes accounts, and a large percentage of them access the content using iPhones. Facebook has more than 800 million active users – more than the largest operator in the world. More than 100 million of those users are accessing Facebook from their mobile devices. Smartphone users are already spending over 60 percent of their time using OTT applications.4 1 Cisco Visual Networking Index, 2011-2016, February 2012. 2 Ibid. 3 Chetan Sharma Consulting, 2010. 4 KPCB Mobile Internet Trends, 2011.2
  3. 3. New Diameter Network: Over- the-Top, Clouds and MachinesSo what does this all mean? While the boom in mobile data applications representsa significant opportunity for CSPs, it’s not without risk. Operators traditionally havemonetized their networks by charging for applications and services. OTT players havesuccessfully decoupled applications from the underlying infrastructure. In the subscribermind, value increasingly lies in the applications and devices rather than the network thatdelivers the content. That leaves CSPs in the difficult position of providing the resourcesto drive bandwidth-intensive services but playing a smaller role in the application anddevice revenue chain.There’s more at risk than revenues. The customer relationship itself is up for grabs.Operators are losing their relevance in the mobile data ecosystem as subscribers spend OTT players haveincreasing amounts of time engaged with OTT application and content providers. successfully decoupledEven more troubling, subscribers are building direct commercial relationships with OTT applications fromproviders and sharing large volumes of valuable, personal data. the underlying infrastructure. In theTo maintain their position in the mobile ecosystem, CSPs need to transition from being subscriber mind, value“network and device enablers” to becoming “service and content enablers.” To do so, increasingly lies inthey have to leverage their expertise and assets to create new value-add service models the applications andand forge commercial relationships with OTT providers. devices rather than the network that deliversQuality of Service the content.Over-the-top providers expect their content to be delivered with high quality anywhere,anytime, and to any device. That’s something they can’t do on their own. CSPs providethe critical link in the mobile ecosystem – highly reliable, high-performance networks.Without the network, there are no mobile data applications.CSPs can re-establish their relevance in the mobile data value chain by taking controlof how services are delivered over their networks. Delivering content with end-to-end service management, meeting stringent service level agreements (SLAs), andguaranteeing quality of service (QoS) are capabilities application and content providerscan’t offer. Operators have to realize that there’s a commensurate value attached tothose capabilities. Why not charge OTT providers for delivering guaranteed levels of QoSto their customers?For example, operators can charge a fee for a temporary QoS boosts for OTTentertainment applications. By integrating policy functionality with an application-programming interface (API), CSPs can enhance a subscriber’s QoS when networkcongestion slows an application down. Another example is a gaming optimizer, whichprovides bandwidth in increments up to 100Gb/s to online gaming providers to reducethe risk of service delays, particularly during peaks around game launches and updates. 3
  4. 4. New DiameterNetwork: Over-the-Top, Cloudsand Machines Analytics and Subscriber Intelligence CSPs are sitting on a cache of contextual data about their subscribers – preferences, devices, location, subscription and billing information, and interests. That data gives them unique consumer insights few businesses can rival. Operators can establish profitable revenue-sharing relationships with application and content developers and mobile advertisers by supplying valuable subscriber intelligence and performance and usage analytics, while respecting subscriber privacy and security through opt-in provisions. Equipped with that data, OTT providers can improve their consumers’ experience by tailoring their service offerings, advertising and content to each subscriber’s preferences and lifestyles.CSPs are sittingon a cache ofcontextual data The Cloud’s Silver Liningabout their subscribers Historically, corporate IT departments built and managed the IT infrastructure - networks,– preferences, devices, servers, storage, and applications. However, the types and number of applications,location, subscription devices and access networks are growing and becoming more complicated. Additionally,and billing information, business professionals depend on real-time, secure and ubiquitous access to all formsand interests. That of content, applications and communications. These trends have added a new layer ofdata gives them unique complexity to information and communications technology (ICT) service requirements.consumer insights few Traditional systems simply don’t have the scalability and flexibility to cost effectively meetbusinesses can rival. the demands of the new mobile workforce. The cloud offers a new ICT model that abstracts resources and services from the underlying architecture. The shift towards cloud services is a reflection of how people use technology today. It enables the anywhere, anytime application access that businesses and consumers demand – regardless of platform, device or location. Operators have the assets, skills and footprint to tap into this growing market. They manage every part of service delivery - from the devices to the network to the subscriber database itself. CSPs are in a prime position to offer on-demand, at-scale cloud services to enterprises and consumers in a multi-tenant environment. Cloud Service Provider Server Cloud User Network Router Cloud Host Cloud Vendor’s Infrastructure Router Enterprise Figure 1. The Cloud Service Provider Model4
  5. 5. New Diameter Network: Over- the-Top, Clouds and MachinesHowever, the opportunity isn’t without risk. Cloud computing has the potential tounleash huge volumes of data traffic on the network. Mobile cloud traffic is expected togrow 28-fold between 2011 and 2016, a compound annual growth rate of 95 percent.5Even more striking, cloud applications will drive 71 percent of the total mobile datatraffic by 2016.6Mobile AdvertisingABI Research predicts the mobile advertising market will top seven billion dollars in 2012– up from just two billion two years ago – and hit the 24 billion mark by 2016.7 The Cloud computing hassurging popularity of smartphones and tablets is largely fueling the dramatic growth. the potential to unleash huge volumes of dataOperators are in a prime position to mine this opportunity by leveraging their most traffic on the network.valuable asset – a deep knowledge their subscribers. Using that data, they can open Mobile cloud trafficnew revenue streams with innovative offerings like personalized advertising, location- is expected to growbased advertising, and zero-rated services paid for by mobile advertising. One of the 28-fold between 2011most promising aspects of mobile advertising is that it will enable operators to create and 2016, a compoundtwo-sided business models. They can generate downstream revenues from their annual growth rate ofcustomers and upstream revenues from brands and advertisers, who want to target 95 percent.those customers.The Saudi Arabian operator, Zain KSA, recently unveiled its permission-based mobileadvertising program, Dealz. Customers can choose to receive ads that match theirpersonal interests, ranging from fashion to technology, directly to their mobile devices.The operator protects its subscribers’ privacy with simple opt-in and opt-out options forthe service.SK Telecom is competing with mobile advertising giants Google and Apple with its newmobile advertising platform, T-ad. The platform will deliver mobile advertising solutionsfor smartphone apps and other media, including Internet-enabled TVs. The launch is partof the operator’s strategy to broaden its mobile content business. T-ad complements SKTelecom’s T-store, which is targeted to become a global app marketplace.Bundled Services for Enterprise CustomersProviding bundled ICT services that integrate multiple communication and collaborationtools to enterprises offers a new revenue stream for operators. Businesses purchasetheir communications as a service rather than managing them as an asset. Theoperator delivers those services where and when needed, enabling real-time employeecollaboration, regardless of location or type of device.5 Cisco VNI, February 2012.6 Ibid.7 “This Stock Heats Up the Mobile Advertising Markey,”, March 3, 2012, 5
  6. 6. New DiameterNetwork: Over-the-Top, Cloudsand Machines AT&T announced its Unified Communications (UC) Services, a cloud-based, software- as-a-service (SaaS) communication and collaboration solution, earlier this year. The UC service integrates multiple tools - IM/chat, email, VoIP calling, web/audio and video conferencing, voicemail, unified messaging and mobility - with presence behind a single user interface. Consumerization of the Enterprise: Bring Your Own Device The number and diversity of mobile devices in the enterprise is skyrocketing. Growing workplace mobility and enthusiasm for “bring your own device” (BYOD) are driving theThe enterprise upheaval trend. It’s blurring the lines between the social and corporate worlds, creating majorrepresents a large and challenges for enterprise ICT departments.profitable opportunityfor operators. In fact, Enterprise consumerization introduces a completely new level of complexity to ICT thatnearly 70 percent of ranges from managing multiple devices and operating systems to securing sensitiveoperators believe that corporate data. The existing model was developed for a time when IT departments hadthe segment will be complete control over corporate network assets and its users. Those tools and processesas important, if not don’t fit the requirements of the new mobile workplace. As ICT departments strugglemore so, than the to keep pace with constantly changing requirements, the demands on budget andmass-market consumer resources are escalating.segment. The enterprise upheaval represents a large and profitable opportunity for operators. In fact, nearly 70 percent of operators believe that the segment will be as important, if not more so, than the mass-market consumer segment.8 CSPs can take the pressure off businesses by providing cost-effective, cloud-based solutions to their technology issues. For example, AT&T offers Toggle, an application for Android devices. It enables business professionals to use their smartphones or tablets in their work and personal lives. The application creates two device modes that separate and safeguard business and personal data. Users can “toggle” between them with just a couple of taps. Verizon’s Mobile Unified Communications (UC) enables Android users essentially to turn their personal device into their office phone while on the go. The application’s “dual identity” capability helps keep business and work calls and messages separate and secure. Mobile Commerce Mobile commerce (mCommerce) is one of the most relevant, yet complex, mobile cloud- based service opportunities. Yankee Group predicts there will be 500 million m-banking users globally by 2015.9 Operators can monetize this opportunity by providing the smart, secure pipes for financial transactions. They have knowledge and control of the devices on their network and have a high degree of subscriber trust. They also have standard authentication, authorization, and accounting (AAA) procedures in place. CSPs control the subscriber identity module (SIM) in each handset. By storing authentication and encryption in the SIM, operators can enable the public/private key exchange required 8 Maraveds Research, published by Fierce Wireless 9 “Mobile Money Forecast,” Yankee Group, June 29, 2011.6
  7. 7. New Diameter Network: Over- the-Top, Clouds and Machinesfor secure mobile commerce. The resulting “digital signature” enables secure, low-levelauthentication via the mobile device.Operators own another valuable asset – the direct billing relationships they’ve establishedwith billions of customers. Leveraging those relationships, operators can simplify theprocess of buying and paying for OTT applications and services. Over-the-top providersrecognize the value in collaborating with CSPs on billing. The relationship not onlycreates a better buying experience, it also drives mobile commerce. Nokia reports thatintegrated operator billing increased transactions at its Ovi Store by up to four times.10Google has inked a similar deal with NTT DoCoMo. The operators’ subscribers havethe flexibility to purchase apps from the Android Market and bill them directly to theirmonthly service plan. Purchasing is easier and faster since subscribers can bypass theGoogle checkout process, which requires credit card payment. RIM has formeda partnership with Telefonica to launch its BlackBerry App World with integratedoperator billing across its networks. Customers can charge their purchases to theirmobile account, allowing them to buy digital content without interrupting theirdigital experience.The growing adoption of the mobile wallet is another prime opportunity for operators toexpand their revenue stream. Operator billing is much simpler than traditional paymentmethods like premium short message service (SMS). With a few clicks, mobile walletusers can make a secure purchase and add it to their monthly mobile bill.Global operators are realizing the potential of the emerging service. Telefónica believes“the mobile wallet lies at the heart of its financial services strategy” and plans a mid-2012 launch for its Latin American and European markets.11 US operator Sprint hasentered an agreement with American Express that enables some of its smartphoneusers to access Serve, the credit card company’s m-wallet service.12Machine-to-Machine Services Several technology trends are converging to accelerate the growth of the M2M servicesmarket. Most network-centric organizations, including CSPs, utility companies andenterprises are migrating to all-Internet protocol (IP) infrastructures. With the shift to IPservice platforms and ubiquitous connectivity, M2M is developing into an important toolfor business transformation.Connected devices are becoming increasingly intelligent, and their use is expandingacross a broader spectrum of industries. As a result, a completely new class of devices –security cameras, cars, appliances, and vending machines – are attaching to the network.The increasing numbers of and uses for M2M devices are creating a new wave ofnetwork traffic, which expected to grow 22-fold between 2011 and 2016.1310 Nokia’s Ovi Store Hits 5 Million Downloads Per Day as Users Enjoy New Symbian Devices and Apps,” Nokia press release, April 12, 2011.11 “Telefonica to Introduce M Wallet,”, February 14, 2012.12 “Sprint Is First Operator to Support Amex’s M-Wallet,”, July 2011.13 Cisco VNI, February 2012. 7
  8. 8. New DiameterNetwork: Over-the-Top, Cloudsand Machines 86% CAGR 2011-2016 600,000 508 PB per Month 500,000 Terabytes per Month 300,000 200,000 100,000 23 PB per Month Source: Cisco VNI Mobile, 0 2012 2011 2012 2013 2014 2015 2016 Figure 2. Growth in M2M Traffic From a business standpoint, M2M applications offer CSPs enormous potential for strategic differentiation and new revenue creation, including: • Security - vehicle security and anti-theft, as well as vehicle emergency calls and alerts triggered by location. • Transport and logistics – location information and alerts • Metering – managing data transmission from electricity, gas and water meters • Health – guaranteeing quality of service for medical devices that monitor vital signs or enable remote medical diagnostics • Smart living/entertainment - remote controls, synchronization and smart appliances For instance, Vodafone Global Enterprise and Boston Scientific Corporation are developing mobile health monitoring solutions that remotely provide doctors with real-time information about patients’ cardiac health and certain vital signs. China Mobile, which entered the M2M market early on, views the technology as the third wave of its long-term business offerings.14 The CSP’s M2M products include Car Service Link, Elevator Guard and Fire Control System. Unicom New Horizon Mobile Telecommunications has launched sector-specific M2M offerings that include Bank New Horizon, Ocean New Horizon and Logistics New Horizon. While the M2M market offers great promise for operators, it also poses significant challenges. The hyper-connected M2M environment is characterized by huge numbers of devices and unpredictable traffic patterns. To succeed, operators will have to address a host of issues, including: 14 “China Cellular M2M Connection Revenue to Exceed $2.7 Billion in 2016, Says ABI Research,” Business Wire, February 27, 20128
  9. 9. New Diameter Network: Over- the-Top, Clouds and Machines• Network scalability• Interoperability of 2G, 3G and LTE technologies• Real-time quality of service requirements• Security of both the network and the devices attached to itIf CSPs hope to accelerate M2M service revenues, they need networking solutions basedon a thorough understanding of M2M service architecture, quality of service needs andmassive device scalability requirements. In the battle with OTT, M2M and cloudThe Network: Platform for Innovation providers, the networkand Applications is the CSP’s greatest strategic asset - if it’sIn the battle with OTT, M2M and cloud providers, the network is the CSP’s greatest architected with thestrategic asset - if it’s architected with the extreme scalability and elasticity to handle the extreme scalability anddemands of a data-driven world. As operators engage in third-party markets, they can elasticity to handle theanticipate much larger volumes of data traffic. CSPs must also address the increased demands of a data-level of Diameter signaling traffic, which is expected to outpace data traffic growth.15 driven world.That volume will be a result of the cumulative impact of device and application growth,personalized service plans, and an increasingly larger and more mobile subscriber base. ADiameter signaling layer in the network core is essential to enable efficient and scalablerouting, traffic management, load balancing, and protocol interworking. Moreover,operators will need the right tools to monetize the opportunity, including:• Sophisticated policy server to define business rules for new service plans• Flexible subscriber data management (SDM) to personalize services• Analytics data to evolve services based on consumer and enterprise requirements.It’s important for CSPs to realize that the network decisions they make today willultimately determine success or failure in the OTT, M2M and cloud markets.The New Diameter NetworkThe New Diameter Network provides the foundation for a successful third-party businessmodel. It is comprised of control elements – policy servers, charging systems, subscriberdatabases, gateways, and session and mobility management – that rely on the Diameterprotocol to exchange network, subscriber and charging information. The New DiameterNetwork is an enduring framework that provides the scalability, reliability and flexibilityfor mobile data application and signaling growth. It is composed of three criticalelements:A Diameter signaling infrastructure at the network core facilitates signaling betweennetwork elements such as online and offline charging systems (OCSs/OFCSs), mobilitymanagement entities (MMEs), policy and charging rules functions (PCRFs) and home15 . Signals Research Group, 2010. 9
  10. 10. New DiameterNetwork: Over-the-Top, Cloudsand Machines subscriber servers (HSSs). Like the central nervous system, which relays messages back and forth from the brain to different parts of the body, the Diameter signaling router (DSR) integrates with all Diameter-based control elements and relays messages among them. It routes, balances and manages message loads across Diameter elements as well as the traffic between the mobile core and application/content providers. The DSR also handles session management for the applications and services being used. By binding subscriber information transmitted in Diameter messages to a single policy server, the DSR ensures that all messages associated with the same subscriber or device are routed to the same policy server. A policy server, defined as a 3GPP-compliant PCRF, defines rules across subscribers, device and networks using Diameter messages. It allows operators to easily create and edit policies to manage subscribers’ QoS, charging rules, quotas, optimization, and admission control. The policy server enables operators to: • Determine who and what has access to which services – when and for how long • Decide how to allocate network resources to specific applications • Identify the charging implications of service usage and quota management A user data repository (UDR) contains the essential profile, state, and usage information for subscribers and their associated devices. It is the key data repository for policy servers and Diameter signaling routers that need to correlate rules with individual and groups of subscribers and manage identity information. Growth Area Competitors New Diameter Requirements Identity and Security Facebook, Google, Twitter, DSR: topology hiding Broker Microsoft, Symantec SDM: ID management, OTT data Policy: location, presence, alerts Advertising/ PayPal, Google, Facebook, Visa, DSR: topology hiding Payments Mastercard, Microsoft Policy/SDM: Policies for OTTs, personalize Ads OTT/Cloud Services Amazon, Cisco, Apple, Microsoft, DSR: topology hiding VMWare, Salesforce, Facebook, Policy and SDM in the cloud Google M2M Specialized M2M providers, DSR: scalability Hotspot Providers, Google, Policy: traffic management, Cable Providers prioritization, security, pooled quotas, location alerts SDM: device management QoS Services N/A Policy/SDM: guarantee QoS DSR: congestion management Analytics Google, Microsoft, Policy and Diameter analytics Facebook, Amazon Figure 3. Growth Opportunities and New Diameter Requirements10
  11. 11. New Diameter Network: Over- the-Top, Clouds and MachinesNew Diameter Network Use CasesUse Case 1: Virtual Private Enterprise CloudThe number of smartphones and tablets in the enterprise is skyrocketing, driven byincreasing mobility and the BYOD trend. Enterprise IT departments must support aremote/mobile workforce using a myriad of devices – all trying to access vital businessapplications. In response to this challenge, many large corporations are migratingmission-critical applications to CSP-hosted virtual private cloud solutions. They’re makingthat move to enable anywhere, any device access to enterprise applications, reduce thecosts associated with supporting those applications, and improve overall efficiencies.Operators can tap into this growing enterprise market with the New Diameter Network.It provides the advanced session, subscriber and policy management required to deliveron-demand access to business software and applications. Operators can offer a virtualprivate enterprise cloud that enables their business customers to:• Support remote / mobile workforce• Enable multi-device support for employees• Provide content portability across devices• Manage enterprise application access, quality and charging based on user-defined criteria, including: –– Number of concurrent sessions against a particular enterprise cloud application –– Class of subscriber (tier) within the enterprise group (sales, field service, executives, etc.) –– Quota management based on subscription of individual employee, employee’s group or entire Enterprise –– QoS priorities based on network conditions, access technology (mobile, WiFi, xDSL, etc.), and subscriber class 3 Cloud Provider Virtual Private Enterprise Cloud 5 Tekelec Cloud App Manager Public Internet 2 4 8 1 6 7 iPad PDG PCRF Figure 4. Virtual Private Enterprise Cloud 11
  12. 12. New DiameterNetwork: Over-the-Top, Cloudsand Machines Use Case 2: M2M Cloud Due to the sheer volume of devices it introduces into the network, M2M significantly increases the amount of signaling and control traffic. By nature, that traffic is bursty and unpredictable. It can have a severe impact on the core signaling network as well as the subscriber, security and policy management domains. Running M2M traffic on the same mobile core and policy and charging control (PCC) infrastructure used by mass market consumers is risky. It can expose those subscribers to network congestion and lower their overall QoS. With the New Diameter Network, operators can mitigate that risk by deploying a separate cloud overlay dedicated to M2M traffic, device management, security, and policy decisions. The M2M overlay shares radio and serving gateway resources with the rest of the mass market consumers. Separate packet data gateway, SDM, and policy resources are dedicated to M2M traffic. Operators benefit from the M2M cloud overlay with the ability to: • Minimize the impact of M2M traffic on existing network resources and operations • Scale M2M resources cost effectively: operators can introduce and grow M2M services independent of the core network • Deploy M2M services cost effectively: the M2M cloud doesn’t require all of the critical components required in the core network like deep packet inspection (DPI) • Simplify policy rules: the M2M cloud PCRF only handles M2M-specific logic. It doesn’t have to handle or sort through the policies required for mass-market, consumer data sessions. Rather than implementing an unwieldy, all-encompassing solution, operators can create an architecture that’s optimized and streamlined for M2M. M2M Overlay M2M overlay with its own subscriber database and PCC Policy Machine HL HL R/HSS R/HSS Radio GGSN/PGW Traffic split at SGSN/SGW Internet Intranet SGW Data Subscribers GGSN/PGW Policy Figure 5. Overlay M2M Sub-network12
  13. 13. New Diameter Network: Over- the-Top, Clouds and MachinesUse Case 3: Monetizing OTT Video ApplicationsPowerful new devices and improved network capabilities have made mobile media morecompelling and available to the mass market. Mobile video is expected to grow at aCAGR of 90 percent between 2011 and 2016.16The increasing bandwidth being consumed by mobile video is straining networkresources, impacting QoS and quality of experience (QoE), and driving up networkinvestment. It’s clearly in every mobile operator’s best interest to find ways to mitigatevideo’s impact on the network while still meeting consumer demand.With the New Diameter Network, CSPs can define the way in which they allocateresources to subscribers and applications to maximize revenues, reduce costs and createa personalized service experience. Operators can manage and monetize the videoopportunity, using a variety of techniques that include:• Control (blocking or optimizing) of video when users go over a certain overall usage threshold• Use of a separate, video-specific quota bucket in addition to the standard overall usage quota.• Application of service-specific “optimization” techniques for certain classes of users or devices at certain times of day or locations in the network• Creation of “managed IPTV services” where usage is not counted towards the user’s overall data bucket.• Throttle video traffic on congested nodes when mobile video consumes too much of the network’s resources• Opt-in service tiers – no video allowance, optimized video only, video only in off-peak hours, or video for work-related applications. 3 4 Optimization Cloud 5 Tekelec Cloud App Manager 6 CDN Provider 2 1 iPad PDG Figure 6. Video Optimization16 . Cisco VNI, February 2012. 13
  14. 14. New DiameterNetwork: Over-the-Top, Cloudsand Machines Conclusion Cloud, M2M and OTT providers are redefining the value creation model in the communications market. They’re claiming an increasing share of the mobile content market, threatening not only operator revenues but also customer relationships. To stem that trend, CSPs have to transform their business models and networks to maintain a foothold in the mobile data ecosystem. That requires a transition from being “network and device enablers” to becoming “service and content enablers.” To do so, they have to create new value-add service models and forge commercial relationships with third- party providers. Moreover, CSPs have to leverage and optimize their greatest strategic asset – their networks. The New Diameter Network is the foundation for a successful mobile data business. It provides the critical network elements – Diameter signaling infrastructure, policy server and UDR – operators need to manage and monetize the M2M, OTT and cloud application and service market. About Tekelec Tekelec’s intelligent mobile broadband solutions enable service providers to manage and monetize mobile data and evolve to LTE and IMS. We are the architects of the new Diameter network, the foundation for session, policy and subscriber data management. More than 300 service providers use our market-leading solutions to deliver cloud, machine-to-machine and personalized services to consumers and enterprises. For more information visit
  15. 15. New Diameter Network: Over- the-Top, Clouds and MachinesAppendix: Acronyms Used in This DocumentAAA Authentication, Authorization and AccountingAPI Application Programming InterfaceCAGR Compound Annual Growth RateCSP Communication Service ProviderDSR Diameter Signaling RouterHSS Home Subscriber ServerICT Information and Communications TechnologyIP Internet ProtocolLTE Long Term EvolutionM2M Machine to MachineM Commerce Mobile CommerceOCS On-line Charging SystemOFCS Offline Charging SystemOTT Over the TopPCC Policy and Charging ControlPCRF Policy and Charging Rules FunctionQoE Quality of ExperienceQoS Quality of ServiceSaaS Software as a ServiceSIP Session Initiation ProtocolSPR Subscriber Profile RepositorySMS Short Message ServiceUDR User Data Repository 15
  16. 16. Tekelec Global Headquarters Tekelec has more than 300 customers in more than 100 countries. For information on our+1.919.460.5500 worldwide offices, visit the Tekelec website at This document is for informational purposes only, and Tekelec reserves the right to change any aspect of the products, features or functionality described in this document without notice. Please contactEMEA +44.1784.437000 Tekelec for additional information and updates. Solutions and examples are provided for illustrationAPAC +65.6796.2288 only. Actual implementation of these solutions may vary based on individual needs and circumstances.CALA +1.919.460.5500 © 2012 Tekelec. All rights reserved. The EAGLE and Tekelec logos are registered trademarks of Tekelec. All other trademarks are the property of their respective owners.