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Policy Control and Charging 2012
Conference Highlights
24th-26th April 2012 at the Krasnapolsky Hotel,
Amsterdam
A Few Highlights from my
Post Conference Workshop
The Classic Telecom Mistake: Technology Focus



                                 Yield and Revenue
                                    Management
                                & Cost Management




                                Policy Management



                © 2012 Alan Quayle Business and Service Development   3
Structure Part 1 of 3
 •   09:00 Registration

 •   09:30 Market Status: What’s Driving All This Activity Around PCC?
     o   Examining the situations in mobile (3G, LTE and 4G), fixed and cable. For example as
         mobile operators are deploying LTE, they’ve finally deployed IMS, putting in the capabilities
         to support PCC so they’ve got to do something with what they’ve just bought.

 •   10:15 Understanding the business basics: Yield and Revenue Management

 •   10:45 Coffee Break

 •   11:00 Standards and Regulation: You can never have enough of them!
     o   Understanding 3GPP PCC
     o   Then understanding all the other activities in this space: 3GPP/3GPP2, Cable Labs, Internet
         Engineering Task Force (IETF), BBF, TeleManagement Forum (TMF), European
         Telecommunications Standards Institute (ETSI) Telecommunications and Internet
         converged Services and Protocols for Advanced Networking (TISPAN), International
         Telecommunications Union- Telecommunication (ITU-T), ATIS IPTV Interoperability
         Forum (IIF), ATIS PTSC, and ATIS SON Forum
     o   Brief revenue of the regulatory environment



                                   © 2012 Alan Quayle Business and Service Development                   4
Structure Part 2 of 3
 •   11:30 Solution Categories
     o   The vendors list is long, and it’s only a partial list. Before we dive into all the vendors we’ll discuss the
         different solution categories to help in mapping out the vendor landscape.


 •   12:00 Vendors: Understanding who does what and why there are so many PCC Vendors.
     o   Allot Communications, Alcatel Lucent, Alepo, Amdocs, Aptilo, BroadHop, ByteMobile, Cisco, Comarch,
         Comptel, Comverse, Convergys, CSGi, DigitalRoute, Ericsson (Telcordia), FTS, HP, Huawei, IBM, Intec,
         Matrixx, Microsoft, Nokia Siemens Networks, OpenCloud, Openet, Oracle, Orga Systems, Qosmos, Redknee,
         Sandvine, SAP, Tango Telecom, Tekelec, Vedicis, Volubill + plus many more including the Sis
     o   Understanding the differences between the vendors’ PCC solutions, architectural strategies, integration with
         billing


 •   13:00 Lunch

 •   14:00 Case Studies
     o   Independent review of case studies from America, Europe and APAC, across developed and developing
         markets, across mobile, fixed and cable.
     o   Examining the business case for an integrated policy and charging control (PCC) solution
     o   Subscriber profiling in the PCC architecture current limitations and ways forward.
     o   How to support various mobile radio interfaces (2G, 3G, 4G, WIMAX, WIFI) and PCC solutions that can help
         facilitate offload
     o   Managing device proliferation: implementing policy solutions based on device types, e.g. smartphones vs.
         mobile broadband



                                         © 2012 Alan Quayle Business and Service Development                             5
Structure Part 3 of 3
 •   15:30             Quick Coffee Break


 •   15:30             Market Survey
     o   What are operators actually doing?
     o   What are the results so far?
     o   What have they learned?
     o   What are their plans?


 •   16:00             End Customer Survey
     o   What do real customers think of some of the new charging models?
     o   Survey covers North America and Europe across the consumer segment.


 •   16:30             Reality Set, Recommendations and Discussion


 •   17:00             End of Workshop

                                 © 2012 Alan Quayle Business and Service Development   6
Why Implement Policy?


                                                                            US, APAC
  LTE                                                                      (developed)



                                                                         Most developed
  Congestion                                                                markets


                                                                         Europe (roaming
  Regulatory                                                              data spending
                                                                            controls)

                                                                         Africa, LATAM,
                                                                         Eastern Europe,
  Service Innovation                                                          APAC
                                                                          (developing)
                   © 2012 Alan Quayle Business and Service Development                     7
Vendor Types Part 1 of 3
•   Charging / BSS vendors: such as Oracle, Volubill and Redknee. Lead on BSS
    o   These vendors believe that a tightly integrated policy and charging solution offering will provide them with a
        competitive edge.
    o   Key is the charging product leads the sale, not the policy product, in fact Redknee does not sell a PCRF
    o   The charging market is as populous as the policy market, with 90 percent of the companies commanding revenues
        under $300 million.
    o   The segment will experience significant consolidation in the next three to five years.



•   Large system vendors: such as Ericsson, ALU and Nokia Siemens Networks
    (NSN). Lead on PCRF
    o   These vendors’ revenues are driven on the product side by a comprehensive product portfolio that includes a radio,
        signaling and Evolved Packet Core (EPC) offerings.
    o   They have robust PCRF product offerings that are part of an overall control plane strategy. However, until now the
        policy market has not been large enough or strategic enough to draw the focus of these vendors.
    o   They still lag in market share compared to the best-of-breed vendors
    o   This vendor segment will gain in market share, particularly as the best-of-breed category is absorbed (through
        acquisition) into the following vendor segment.



                                             © 2012 Alan Quayle Business and Service Development                         8
Vendor Types Part 2 of 3
•   Control plane vendors such as Tekelec, Openet and Amdocs (Bridgewater): Lead on
    PCRF
    o   This is an emerging and coalescing vendor segment focused on the complex and unique requirements of the control plane
        of the MNO.
    o   Policy vendors in this segment hail from different corners of the network market including B/OSS (Amdocs),
        performance and subscriber data management (Tekelec), and billing and charging (Openet).
    o   It would also include Acme Packet, if only that company had a policy control product. Vendors in this segment are
        expanding into the product categories that make up the network (most often mobile) operator control plane—not just
        policy and charging, but also Packet Exchange Controllers (PECs)/Diameter routing, session border controllers (SBCs),
        subscriber profile repository (SPR) and Home Subscriber Server (HSS).
    o   One of the virtues of this market segment is that the MNO has a history of purchasing these products from best-of-breed
        vendors as well as from their traditional system vendors.



•   IP vendors such as Cisco and Juniper. Lead on PCRF / PCEF / Other
    o   They are different from the large system vendors because their product strategy is still largely influenced by their routing
        products, not, as in the case of the large system vendors, by a radio, signaling and EPC product set.
    o   Like the system vendors, Cisco and Juniper have not been impressed enough by the policy control market to place
        significant development focus on it in the past.
    o   Today, these vendors acknowledge the strategic importance of the policy market and the carrier control plane in general.
        However, their strategies for addressing the market, while different from each other’s, are still largely driven by their data
        plane focus.
                                             © 2012 Alan Quayle Business and Service Development                                    9
Vendor Types Part 3 of 3

•   DPI Vendors: Lead on PCEF
    o   Cisco, Genband, Sandvine,
    o   Combine enforcement and control into one box


•   Gateway / Optimization Vendors: Focus on their control points
    o   ByteMobile, Acision, ACME Packet, Openwave, Juniper
    o   Use their platform that controls content in some way to implement
        policies


•   Other
    o   OpenCloud
    o   Diameter signaling routers and other mediation devices

                              © 2012 Alan Quayle Business and
                                                                            10
                                   Service Development
PCC Landscape
         PCRF                                                         BSS




         PCEF                                                         Other




                © 2012 Alan Quayle Business and Service Development           11
Yield Management Background
•   Yield Management is used in many service industries to describe techniques to allocate limited resources,
    such as airplane seats or hotel rooms, among a variety of customers, such as business or leisure travelers.
    o   Since these techniques are used by firms with extremely perishable goods, or by firms with services that cannot be stored
        at all, these concepts and tools are often called perishable asset revenue management or simply revenue management.

•   Yield management, including overbooking and dynamic pricing, has been an enormously important
    innovation in the service industries.
    o   American Airlines credits yield management techniques for a revenue increase of $500 million/year and Delta Airlines
        uses similar systems to generate additional revenues of $300 million per year.
    o   While the airlines are the most sophisticated users of yield management, these practices have begun to appear in other
        service industries. For example, Marriott hotels credits their yield management system for additional revenues of $100
        million per year.
    o   All of these revenue increases have been achieved with relatively small increases in capacity and costs.

•   My aim here is to describe yield management's basic concepts and provide details about a particular
    application.
    o   Real-world example is provided by the Hyatt Regency hotel at 125 East Main Street in Rochester, NY.
    o   The hotel has 210 King/Queen rooms used by both business and leisure travelers.
    o   The hotel must decide whether to sell rooms well in advance at a relatively low price (i.e. to leisure travelers), or to ‘hold
        out’ and wait for a sale at a higher price to late-booking business travelers.


                                                © 2012 Alan Quayle Business and Service Development                              12
Where and Why Firms Practice Yield Management
•    Business environments with the following five characteristics are appropriate for the
     practice of yield management (in parentheses we apply each characteristic to the
     Hyatt hotel):
1.    It is expensive or impossible to store excess resource (we cannot store tonight’s room for use by
      tomorrow night’s customer).
2.    Commitments need to be made when future demand is uncertain (we must set aside rooms for
      business customers – “protect” them from low-priced leisure travelers -before we know how
      many business customers will arrive).
3.    The firm can discriminate among customer segments, and each segment has different demand
      curves (purchase restrictions and refundability requirements help to segment the market
      between leisure and business customers. The latter are more indifferent to the price.).
4.    The same unit of capacity can be used to deliver many different products or services (rooms are
      essentially the same, whether used by business or leisure travelers).
5.    Producers are profit-oriented and have broad freedom of action (in the hotel industry,
      withholding rooms from current customers for future profit is not illegal or morally
      irresponsible. On the other hand, such practices would be questionable in emergency wards or
      with organ transplants).


                                  Sounds a lot like Telecoms!                                         13
                                    © 2012 Alan Quayle Business and Service Development
Operator Survey




© 2012 Alan Quayle Business and Service Development   14
Demographics (97 Operators Surveyed)




                © 2012 Alan Quayle Business and Service Development   15
Why are you deploying policy management
infrastructure?




                 © 2012 Alan Quayle Business and Service Development   16
What are the barriers to deploying policy?




                 © 2012 Alan Quayle Business and Service Development   17
End Customer Survey




© 2012 Alan Quayle Business and Service Development   18
Demographic Profile




                © 2012 Alan Quayle Business and Service Development   19
Age Distribution




                   © 2012 Alan Quayle Business and Service Development   20
Geo-Distribution




                   © 2012 Alan Quayle Business and Service Development   21
Has your mobile phone bill ever shocked you?




           Bill shock is 2012 Alan Quayle Business and
                       © a normal customer experience
                                                         22
                         Service Development
What matters most about your mobile phone service and
bill?




The importance of value and simplicity / clarity came up many times. Value is a
                              © 2012 Alan Quayle Business and
tough issue as its perception based and web-services are influencing perception.
                                   Service Development
                                                                              23
Would you buy Quality of Service?

         Do you understand what Quality of Service means?




                     After a explanation: What do you think of Quality of Service?




QoS is going to
 be a difficult
     sell!




                          © 2012 Alan Quayle Business and Service Development   24
What Matters…




           Value &
          Simplicity
   We’ve got to focus policy on what matters to the customer not to us.   25
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights
Policy Control and Charging 2012 Conference Highlights

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Policy Control and Charging 2012 Conference Highlights

  • 1. Policy Control and Charging 2012 Conference Highlights 24th-26th April 2012 at the Krasnapolsky Hotel, Amsterdam
  • 2. A Few Highlights from my Post Conference Workshop
  • 3. The Classic Telecom Mistake: Technology Focus Yield and Revenue Management & Cost Management Policy Management © 2012 Alan Quayle Business and Service Development 3
  • 4. Structure Part 1 of 3 • 09:00 Registration • 09:30 Market Status: What’s Driving All This Activity Around PCC? o Examining the situations in mobile (3G, LTE and 4G), fixed and cable. For example as mobile operators are deploying LTE, they’ve finally deployed IMS, putting in the capabilities to support PCC so they’ve got to do something with what they’ve just bought. • 10:15 Understanding the business basics: Yield and Revenue Management • 10:45 Coffee Break • 11:00 Standards and Regulation: You can never have enough of them! o Understanding 3GPP PCC o Then understanding all the other activities in this space: 3GPP/3GPP2, Cable Labs, Internet Engineering Task Force (IETF), BBF, TeleManagement Forum (TMF), European Telecommunications Standards Institute (ETSI) Telecommunications and Internet converged Services and Protocols for Advanced Networking (TISPAN), International Telecommunications Union- Telecommunication (ITU-T), ATIS IPTV Interoperability Forum (IIF), ATIS PTSC, and ATIS SON Forum o Brief revenue of the regulatory environment © 2012 Alan Quayle Business and Service Development 4
  • 5. Structure Part 2 of 3 • 11:30 Solution Categories o The vendors list is long, and it’s only a partial list. Before we dive into all the vendors we’ll discuss the different solution categories to help in mapping out the vendor landscape. • 12:00 Vendors: Understanding who does what and why there are so many PCC Vendors. o Allot Communications, Alcatel Lucent, Alepo, Amdocs, Aptilo, BroadHop, ByteMobile, Cisco, Comarch, Comptel, Comverse, Convergys, CSGi, DigitalRoute, Ericsson (Telcordia), FTS, HP, Huawei, IBM, Intec, Matrixx, Microsoft, Nokia Siemens Networks, OpenCloud, Openet, Oracle, Orga Systems, Qosmos, Redknee, Sandvine, SAP, Tango Telecom, Tekelec, Vedicis, Volubill + plus many more including the Sis o Understanding the differences between the vendors’ PCC solutions, architectural strategies, integration with billing • 13:00 Lunch • 14:00 Case Studies o Independent review of case studies from America, Europe and APAC, across developed and developing markets, across mobile, fixed and cable. o Examining the business case for an integrated policy and charging control (PCC) solution o Subscriber profiling in the PCC architecture current limitations and ways forward. o How to support various mobile radio interfaces (2G, 3G, 4G, WIMAX, WIFI) and PCC solutions that can help facilitate offload o Managing device proliferation: implementing policy solutions based on device types, e.g. smartphones vs. mobile broadband © 2012 Alan Quayle Business and Service Development 5
  • 6. Structure Part 3 of 3 • 15:30 Quick Coffee Break • 15:30 Market Survey o What are operators actually doing? o What are the results so far? o What have they learned? o What are their plans? • 16:00 End Customer Survey o What do real customers think of some of the new charging models? o Survey covers North America and Europe across the consumer segment. • 16:30 Reality Set, Recommendations and Discussion • 17:00 End of Workshop © 2012 Alan Quayle Business and Service Development 6
  • 7. Why Implement Policy? US, APAC LTE (developed) Most developed Congestion markets Europe (roaming Regulatory data spending controls) Africa, LATAM, Eastern Europe, Service Innovation APAC (developing) © 2012 Alan Quayle Business and Service Development 7
  • 8. Vendor Types Part 1 of 3 • Charging / BSS vendors: such as Oracle, Volubill and Redknee. Lead on BSS o These vendors believe that a tightly integrated policy and charging solution offering will provide them with a competitive edge. o Key is the charging product leads the sale, not the policy product, in fact Redknee does not sell a PCRF o The charging market is as populous as the policy market, with 90 percent of the companies commanding revenues under $300 million. o The segment will experience significant consolidation in the next three to five years. • Large system vendors: such as Ericsson, ALU and Nokia Siemens Networks (NSN). Lead on PCRF o These vendors’ revenues are driven on the product side by a comprehensive product portfolio that includes a radio, signaling and Evolved Packet Core (EPC) offerings. o They have robust PCRF product offerings that are part of an overall control plane strategy. However, until now the policy market has not been large enough or strategic enough to draw the focus of these vendors. o They still lag in market share compared to the best-of-breed vendors o This vendor segment will gain in market share, particularly as the best-of-breed category is absorbed (through acquisition) into the following vendor segment. © 2012 Alan Quayle Business and Service Development 8
  • 9. Vendor Types Part 2 of 3 • Control plane vendors such as Tekelec, Openet and Amdocs (Bridgewater): Lead on PCRF o This is an emerging and coalescing vendor segment focused on the complex and unique requirements of the control plane of the MNO. o Policy vendors in this segment hail from different corners of the network market including B/OSS (Amdocs), performance and subscriber data management (Tekelec), and billing and charging (Openet). o It would also include Acme Packet, if only that company had a policy control product. Vendors in this segment are expanding into the product categories that make up the network (most often mobile) operator control plane—not just policy and charging, but also Packet Exchange Controllers (PECs)/Diameter routing, session border controllers (SBCs), subscriber profile repository (SPR) and Home Subscriber Server (HSS). o One of the virtues of this market segment is that the MNO has a history of purchasing these products from best-of-breed vendors as well as from their traditional system vendors. • IP vendors such as Cisco and Juniper. Lead on PCRF / PCEF / Other o They are different from the large system vendors because their product strategy is still largely influenced by their routing products, not, as in the case of the large system vendors, by a radio, signaling and EPC product set. o Like the system vendors, Cisco and Juniper have not been impressed enough by the policy control market to place significant development focus on it in the past. o Today, these vendors acknowledge the strategic importance of the policy market and the carrier control plane in general. However, their strategies for addressing the market, while different from each other’s, are still largely driven by their data plane focus. © 2012 Alan Quayle Business and Service Development 9
  • 10. Vendor Types Part 3 of 3 • DPI Vendors: Lead on PCEF o Cisco, Genband, Sandvine, o Combine enforcement and control into one box • Gateway / Optimization Vendors: Focus on their control points o ByteMobile, Acision, ACME Packet, Openwave, Juniper o Use their platform that controls content in some way to implement policies • Other o OpenCloud o Diameter signaling routers and other mediation devices © 2012 Alan Quayle Business and 10 Service Development
  • 11. PCC Landscape PCRF BSS PCEF Other © 2012 Alan Quayle Business and Service Development 11
  • 12. Yield Management Background • Yield Management is used in many service industries to describe techniques to allocate limited resources, such as airplane seats or hotel rooms, among a variety of customers, such as business or leisure travelers. o Since these techniques are used by firms with extremely perishable goods, or by firms with services that cannot be stored at all, these concepts and tools are often called perishable asset revenue management or simply revenue management. • Yield management, including overbooking and dynamic pricing, has been an enormously important innovation in the service industries. o American Airlines credits yield management techniques for a revenue increase of $500 million/year and Delta Airlines uses similar systems to generate additional revenues of $300 million per year. o While the airlines are the most sophisticated users of yield management, these practices have begun to appear in other service industries. For example, Marriott hotels credits their yield management system for additional revenues of $100 million per year. o All of these revenue increases have been achieved with relatively small increases in capacity and costs. • My aim here is to describe yield management's basic concepts and provide details about a particular application. o Real-world example is provided by the Hyatt Regency hotel at 125 East Main Street in Rochester, NY. o The hotel has 210 King/Queen rooms used by both business and leisure travelers. o The hotel must decide whether to sell rooms well in advance at a relatively low price (i.e. to leisure travelers), or to ‘hold out’ and wait for a sale at a higher price to late-booking business travelers. © 2012 Alan Quayle Business and Service Development 12
  • 13. Where and Why Firms Practice Yield Management • Business environments with the following five characteristics are appropriate for the practice of yield management (in parentheses we apply each characteristic to the Hyatt hotel): 1. It is expensive or impossible to store excess resource (we cannot store tonight’s room for use by tomorrow night’s customer). 2. Commitments need to be made when future demand is uncertain (we must set aside rooms for business customers – “protect” them from low-priced leisure travelers -before we know how many business customers will arrive). 3. The firm can discriminate among customer segments, and each segment has different demand curves (purchase restrictions and refundability requirements help to segment the market between leisure and business customers. The latter are more indifferent to the price.). 4. The same unit of capacity can be used to deliver many different products or services (rooms are essentially the same, whether used by business or leisure travelers). 5. Producers are profit-oriented and have broad freedom of action (in the hotel industry, withholding rooms from current customers for future profit is not illegal or morally irresponsible. On the other hand, such practices would be questionable in emergency wards or with organ transplants). Sounds a lot like Telecoms! 13 © 2012 Alan Quayle Business and Service Development
  • 14. Operator Survey © 2012 Alan Quayle Business and Service Development 14
  • 15. Demographics (97 Operators Surveyed) © 2012 Alan Quayle Business and Service Development 15
  • 16. Why are you deploying policy management infrastructure? © 2012 Alan Quayle Business and Service Development 16
  • 17. What are the barriers to deploying policy? © 2012 Alan Quayle Business and Service Development 17
  • 18. End Customer Survey © 2012 Alan Quayle Business and Service Development 18
  • 19. Demographic Profile © 2012 Alan Quayle Business and Service Development 19
  • 20. Age Distribution © 2012 Alan Quayle Business and Service Development 20
  • 21. Geo-Distribution © 2012 Alan Quayle Business and Service Development 21
  • 22. Has your mobile phone bill ever shocked you? Bill shock is 2012 Alan Quayle Business and © a normal customer experience 22 Service Development
  • 23. What matters most about your mobile phone service and bill? The importance of value and simplicity / clarity came up many times. Value is a © 2012 Alan Quayle Business and tough issue as its perception based and web-services are influencing perception. Service Development 23
  • 24. Would you buy Quality of Service? Do you understand what Quality of Service means? After a explanation: What do you think of Quality of Service? QoS is going to be a difficult sell! © 2012 Alan Quayle Business and Service Development 24
  • 25. What Matters… Value & Simplicity We’ve got to focus policy on what matters to the customer not to us. 25