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Commercial Realities and Subscriber-Centric Strategies for Broadband Traffic Management, Towards Usage-Based Charging Models
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Commercial Realities and Subscriber-Centric Strategies for Broadband Traffic Management, Towards Usage-Based Charging Models


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Event | Broadband Traffic Management …

Event | Broadband Traffic Management
Featured Speaker

Manish Singh, VP of Product Line Management, Continuous Computing

When: Tuesday, November 17th, 2009

Topic: COMMERCIAL REALITIES AND SUBSCRIBER-CENTRIC STRATEGIES FOR BROADBAND TRAFFIC MANAGEMENT, Towards Usage-Based Charging Models In A Competitive Flat-Rate Environment: Is There A First-Mover Disadvantage Or Can QoE Be a USP?
• How sustainable is flat-rate pricing? Does it create or erode value?
• Exploring the commercial risk involved in a shift towards bandwidth-based pricing
• Moving from all you can eat to all you can afford

Published in: Technology

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  • 1. Usage-Based Charging Models Manish Singh Vice President, Product Line Management Confidential and Proprietary
  • 2. At a Glance Our Customers = Our Success Protocol Software LTE DPI Femtocell ATCA Professional Platforms Services See our display in the Exhibit Area Confidential and Proprietary 2
  • 3. Mobile Broadband: Huge Demand, Huge Challenges Mobile voice revenues saturating Mobile broadband driving growth Traffic up 131% per year Doubling every 9 months! BUT new base stations & spectrum Source: IDC adding only 20% capacity / year Video is the true network killer app Will bring mobile networks to its knees! Data streams are no longer bursty Ex: Peer-to-peer (P2P) & streaming The “Exa-Flood” is coming… Source: Cisco Visual Networking Index, 2009 Confidential and Proprietary 3
  • 4. What Is Driving this Growth? Demographics Devices Demand Internet Applications Internet Generation Mobile Internet Devices & Content Confidential and Proprietary 4
  • 5. And More to Come… Smartphones, Netbooks, Notebooks… Smartphones Netbooks Notebooks Cameras, eReaders, Med Devices, Gaming, Navigation… Personal IP Cameras eReaders Medical Devices Gaming Consoles Navigation Systems Confidential and Proprietary 5
  • 6. Device Potential Connected Devices M2M Connectivity 12 Today, predominantly WiFi h o wt Coverage limited to HotSpots 10 e Gr ic Consumer Opportunity ev Relative Comparison 8 d D Social networking phenomenon te nec Facebook, YouTube… 6 C on Wireline on the decline X 4 3.3 Emergency, home security… 2 Enterprise Opportunity Operational efficiencies 0 Smart meters, tracking... 2009 2015 2020 Year Inventory management Connected Devices Legend: BUT, there are challenges Consumer Electronics – Cameras, eReaders, Gaming Consoles, Personal Medical Devices, Smart Meters, Retail PoS terminal, etc. Security – embedding SIM Traditional Mobile Devices – Cellphones, Smartphones, Netbooks, Indoor coverage Data Cards, Dongles Cost!! Cost!! Cost!! Sources: various analyst reports, Continuous Computing estimates Confidential and Proprietary 6
  • 7. New Opportunities Retailers Manufacturers Today’s Business Chain Consumer Retailer Manufacturer Mostly, pay one-time Embedding LTE in consumer devices New entrant: Operator Recurring business model opportunity Netbooks already setting the trend Pay usage-based, application-based Addressing the cost challenge Operator subsidizes devices, OR Operators Consumers Mfgr subsidizes & shares revenue Consumer Device Ecosystem Unified Billing is a must User might have multiple devices Confidential and Proprietary 7
  • 8. Threat: “Mind the Gap” Apple sold 7.4M iPhones in Q3 Intel reports blowout Q3 on strong mobile business; Atom rev up 14% AT&T sells Nokia netbooks for $300 with 2 year contract Verizon’s CTO: “Metered broadband is the future” And… Operators need… Traffic Revenues & Femtocells = Traffic Gap Cheapest Widening Bit Pipe Voice Era Revenues Data Era LTE = Fastest Bit Pipe DPI = Smartest Bit Pipe Network Infrastructure Meltdown Confidential and Proprietary 8
  • 9. LTE Delivers “Fast Pipes” Significantly increased data rates E-UTRAN Architecture ~100Mbps down, ~50Mbps up Low latency for real-time apps 11 LTE design wins MME / Serving GW MME / Serving GW EPC: MME, SGW, PDN solutions RAN: eNodeB, HeNodeB S1 S1 S1 S1 S1 S1 S1 X2 X2 eNodeB X2 eNodeB HeNodeB HeNB Gateway S1 S1 eNodeB HeNodeB HeNodeB Spectral Efficiency Improved 4X Confidential and Proprietary 9
  • 10. Femtocells Deliver “Cheap Pipes” Enables new LTE rollout strategy Femtocell Solutions New: “Build-as-they-come” Old: “Build-and-they-will-come” Offloads traffic Provides cell coverage indoors from macro Low-power & self-configuring to network minimize interference Pricing: enables combo package deal Aligns with 3G / LTE standards Ex: Femto bundled with netbook Leverages users’ broadband Heavy data traffic offloaded from macro + Trillium Femtocell software Optimized for small memory footprint Optimized for high performance Macro network LTE femtocell LTE Devices 16 Femto design wins base station converged device Spectrum Re-use Improved 1,000,000X Confidential and Proprietary 10
  • 11. DPI Delivers “Smart Pipes” Consumer / Subscriber Network Operator App & Content Provider $ $? Bit Pipe $$ Enables new revenue streams Enables higher network efficiency Tiered SLA / Bandwidth Allocation Traffic Offloading / Throttling (P2P) Real Time Service-Tier Upgrade Security: IPS/IDS, DDoS, Firewall 12 DPI design wins Still Limited by Spectrum; Traffic Management Is Essential DPI = Deep Packet Inspection, P2P = Peer-to-Peer Confidential and Proprietary 11
  • 12. Ramifications of Flat Rate Pricing Hardware = Cost Reduction Cost per bit over the life of a project must go DOWN Implications Standards (e.g., ATCA) Outsourcing Commoditization Software = Revenue Growth Application & Services Implications Context Ease-of-use Differentiation Confidential and Proprietary 12
  • 13. ATCA 40G = Lower Cost / Bit 40G ATCA essential for EPC to lower cost / bit 40G ATCA = Scalability + Reliability + Performance EPC MME EPC SGW / PGW Processing per session Processing per packet High Availability Load Balancing Multi-threaded S1-AP, eGTP-c… Fast Path SCTP, eGTP-u, MIP… Encryption support for Snow3G… Deep Packet Inspection (DPI) Continuous Computing enables wide range of LTE products From … “Smallest All-in-One EPC”… …to “Highly Scalable MME / SGW” Confidential and Proprietary 13
  • 14. Key DPI Applications for Mobile Broadband 1. Traffic Management Netbooks will drive P2P traffic 3G / LTE are spectrum limited Internet video = Network Killer Rate limit / throttle traffic Network Congestion = Poor QoE Application-aware, user-aware 2. Adaptive Traffic Shaping Dynamic bandwidth allocation Not all cell sites loaded equally RAN-aware Shaper Loading changes with time of day 3. Internet Offload (DPI) Offload traffic to the internet Lower CapEx in wireless core Offloading at network’s edge 12 DPI design wins! Confidential and Proprietary 14
  • 15. Metered vs. Flat Rate Pricing Metered: $X / MB Flat Rate: $x / month Consumer’s viewpoint Consumer’s viewpoint What’s a Megabyte? Voice = Minutes Want to download song, Data = Months emails, web page, etc. In control Lack of control Get my songs, emails, web, Too complex etc. Result: Result: Simplicity Is Key Confidential and Proprietary 15
  • 16. Example – Airline, B2C First Business Capacity-Limited Environment Economy Tiered Pricing Model: You Get What You Pay For Confidential and Proprietary 16
  • 17. Bandwidth-Based Pricing Fast, Faster, Fastest $X / Mbps Pros Cons Consumer’s viewpoint “Guaranteed” data rates & QoE I’m in control Dead spots? Easy to understand Coverage gaps? LTE – the right opportunity! Bit Pipe! Leverage context Revenue / Traffic decoupling Real-time service tier upgrades 20% users taking 80% capacity Tiered SLAs, Tiered Pricing Model Confidential and Proprietary 17
  • 18. Device-Based Pricing Traffic $x / month / device High Volume Leverage context New growth engine Low High Mobility Value Recurring revenues Easy to understand Low In control Usage-Based, Tied to Device Confidential and Proprietary 18
  • 19. Example: Retail, B2B Too Many Products Limited Shelf Space Shelf Neutrality? Premium shelf space = More sales Balancing Choice, Monetizing Placement Confidential and Proprietary 19
  • 20. Let’s Also Not Forget the Other End of the Pipe… Consumer Network Operator App & Content Provider $ $? Bit Pipe $ Tiered bandwidth allocation Latency (msec) = lost sales Mobile broadband “highways” The Google model Charging content providers Balancing ‘relevance’ Consumer is King Monetizing ‘priority’ Game Changer: Let the Content Providers Compete Confidential and Proprietary 20
  • 21. Summary Mobile broadband driving growth Revenue / Traffic decoupling Flat rate not sustainable Usage-based did not work Uniquely Uniquely New charging models Bandwidth & device-based positioned to positioned to bridge the gap bridge the gap Monetizing other end of the pipe between between Traffic Management essential for QoE Network capacity limited by spectrum DPI + DPI + Cost / bit must go down Wireless Wireless 40G ATCA = lower cost / bit Confidential and Proprietary 21
  • 22. Questions & Comments Manish Singh Vice President, Product Line Management Confidential and Proprietary