Integrated policy & charging

White Paper
Integrated Policy & Charging:
The Road to Data Monetization
Prepared by
Graham Finnie
Chief Analyst, Heavy Reading
www.heavyreading.com
on behalf of
www.comverse.com
August 2014

HEAVY READING | AUGUST 2014 | WHITE PAPER | INTEGRATED POLICY & CHARGING: THE ROAD TO DATA MONETIZATION 2
Executive Summary
Policy management is at a crossroads. After an initial buildout driven by traffic man-
agement use cases such as quota management and congestion control, our most
recent surveys of network operators show that most have shifted their attention to
a new kind of policy deployment in which the main objective is to facilitate service
differentiation, to help operators monetize data services more effectively.
But shifting the focus of policy management to service differentiation raises many
new questions. Not least, since a key objective here is the monetization of data
services, it will most likely require integration of policy servers with charging systems.
And as many network operators have found, that is no simple matter.
The paper is divided into four sections:
In Section 1, we look briefly at the key business drivers for the integration of policy
and charging, including the drive to data monetization and a wider range of ser-
vice plans and options. Impelled to find new sources of revenue and to reduce
churn (as well as increase market share), network operators are inevitably moving
toward a more personalized, granular set of services and service options for sub-
scribers, and this is causing the business value of policy control to radically change,
with consequences for the whole policy architecture.
Section 2 shows that putting in place the architecture required to support this new
policy environment has been fraught with problems, not least in the integration of
policy and charging. Heavy Reading surveys have consistently shown that the inte-
gration of policy servers with charging systems and other back-office functions has
been among the most difficult obstacles to progress.
In the light of these issues, Section 3 examines the technical options available to
operators when connecting policy systems and charging or billing systems. It looks
at what exactly is needed to achieve key objectives, and evaluates the various
potential solutions.
In particular, we consider the 3rd Generation Partnership Project's (3GPP) new Sy
interface linking the Policy & Charging Rules Function (PCRF) and Online Charging
System (OCS); and show that, while it is a major step forward, it may fall short of all
the functionality necessary to meet the growing need of operators to support rapid
service plan innovation. Enhancements to Sy will often be required, and for many
operators, pre-integration of policy and charging, supported by a single product
catalog and a single subscriber view, will best meet the new requirements.
Finally, Section 4 shows how some operators are leading the way with new types of
service plans that draw on the capabilities of policy, charging and related functions
to broaden the appeal of the operators' service portfolios. The past year or two has
seen a big increase in new types of service plans, showing how important it is for
operators to be able to quickly launch new service plans to remain relevant.

Business Drivers for Policy & Charging Integration
Policy management has been in networks for ten years, although most deployments
have occurred in the past two to three years. Initial deployments were driven by
traffic management. Typical use cases included identifying and throttling high-
bandwidth applications and users, and (as mobile operators eliminated "all you can
eat" plans) data tier quota management. These use cases were often intended as
"fair usage" measures and were designed mainly to control congestion; they did not
usually require integration of billing or charging systems.
Over the past few years, however, we have seen a major strategic shift in the use
of policy management. Network operators realized that since policy servers are all-
purpose rules engines, they can make use of a far broader range of information to
make classic "if/then"-type decisions based on some
chain of logic. Thus policy could be used to deliver busi-
ness value beyond traffic management.
Why has this change occurred? From a business point of
view, the key driver is a board-level shift in strategy at
many operators to focus on top-line data service reve-
nue growth – a.k.a., data monetization. Everyone recog-
nizes that revenue from the core legacy services (voice
and, in mobile networks, messaging) is in long-term decline, while broadband and
data services revenue is failing to keep pace with growth in traffic. As a result, service
revenue is falling in mature markets such as Western Europe, as Figure 1 shows.
Yet this is occurring at a time, according to ETNO, when capex is increasing to cope
with new demand. For example, European network operator capex rose from €43.6
billion in 2009 to €46 billion in 2012, according to ETNO's Annual Economic Report. In
this environment, simply focusing on cutting costs is likely to become a classic "race
Figure 1: Total Telecom Service Revenues in Europe
Source: The European Telecommunications Network Operators' Association (ETNO)
The key driver is a board-
level shift in strategy at
many operators to focus
on top-line data service
revenue growth

to the bottom." If revenue is to not decline indefinitely, operators need to find new
revenue sources, and fast.
As a consequence, a service differentiation strategy that aims to provide a much
wider range of services and service options to end users – and ideally includes third-
party service and content providers as partners in this effort – is now a key objective.
Many network operators have realized that policy servers could play a key role in
that strategy, as Figure 2 shows. And among respondents who identified themselves
as working for cellular service providers, the result was almost unanimous, with nearly
90 percent saying that the primary purpose of policy management was "to help
introduce new services, price plans and options."
In interviews conducted for the same survey, we found that operators generally
were fully aware of policy's potential to enable service differentiation. For example,
one large operator with multiple mobile properties put it this way:
At the commercial level our strategy [is] to create the ability to have differ-
entiated service packages, with good time to market [for these packages].
Differentiated by access, congestion level, shared accounts, type of con-
tent or application, specific company (e.g., a third party such as Coca
Cola paying for the access to its site/content), and probably other stuff we
haven't thought of yet. There are lots of plans at the commercial level. There
will be new data packages for 4G, promotional tariffs for e.g. people visiting
particular video sites, where we'll need to count things separately from the
main account, perhaps depending also on time of day, or whether access
is on 2G, 3G, 4G or Wi-Fi.
In practice, however, as we shall see in the next section, until fairly recently progress
has been quite slow in achieving these aims.
Figure 2: Service Differentiation Is Now the Main Reason to Deploy Policy
Question: Over the next two years, what is the PRIMARY motivation for your company to deploy
or add to a policy management solution?
Source: Heavy Reading survey of 71 network operators, 2013

Leveraging Policy in Monetization Initiatives
In the preceding section, we saw that many operators now see policy manage-
ment as a key enabler of service differentiation and data service monetization.
However, translating theory into practice has been far from straightforward. Many
policy deployments handle only a small number of use cases, often still focused
around fair usage, despite an ambition to broaden the use of the policy platform.
Probing into the reasons for this in our 2013 survey, we found that there are many
issues and challenges, but the number one problem is integration with charging and
billing systems, as shown in Figure 3.
Even with this awareness, it has proven difficult to resolve these issues. In each of the
four policy management surveys conducted by Heavy Reading between 2010 and
2013, integration of policy with charging and billing systems has been the number
one barrier to achieving corporate objectives. It's also worth noting that in our view,
the top three barriers in Figure 3 are linked in a kind of vicious circle: The difficulty of
integrating these key elements, combined with the lack
of coordination among key departments, has made it
nearly impossible to make the business case.
There is a substantial disconnect between the network di-
vision that "owned" the policy area initially; the IT depart-
ment that must be involved when IT elements are con-
cerned; and the marketing team tasked with coming up
Figure 3: Key Barriers to Achieving Objectives in Policy Management
Question: On a scale of 1 to 5, where 5 is "a huge problem" and 1 is "not a problem at all," please rate the
following potential barriers to achieving your company's objectives in policy control & management.
In each of the four policy management
surveys conducted by Heavy Reading
between 2010 and 2013, integration of
policy with charging and billing systems
has been rated the #1 problem

with new service ideas. This was a common theme in the interviews we conducted
for our 2013 survey. For example, the divisional CTO with one major operator stated:
This really all depends on marketing – until they come to us with new ideas,
there is no incentive to invest [in a more sophisticated product]. We were
talking with them about turbo buttons, extra bandwidth for enterprises, and
so on, but it came to nothing. There's plenty of technology out there, but
sales and marketing won't take risks, and don't understand what technol-
ogy can now bring. There are a lot of silos, and a lot of fear.
Marketers could point their fingers right back, complaining that their "new" ideas are
always met with unacceptable cost and timeframe to implement. The problem is a
difficult one to disentangle, because the core issue has been that most "legacy"
policy servers were created by major equipment vendors or by network-oriented
specialists using standards that were created with little input from the IT or market-
ing/business side of the house.
The most important of these standardized architectures is the 3GPP's Policy & Charg-
ing Control (PCC) architecture, which evolved through various releases (R7-R11)
of the 3GPP's overall architecture for 3G and 4G networks from 2007 onward. In
Releases 7-10, ratified between 2007 and 2011, there was no direct standardized
interface between the PCRF and the Online or Offline Charging System (OCS/
OFCS), although there were specified
interfaces from the Policy Enforcement
Function (PCEF) to OCS and OFCS (see
Figure 4). Although there is now a direct
interface, Sy, it was formally ratified only
in 2013, and while most vendors now
claim to support it, hardly any of the ex-
isting policy deployments use it today.
As a result, there is continuing dissatis-
faction among network operators, with
51 percent of respondents in our 2013
survey rating problems integrating with
charging and billing a "huge" or "signifi-
cant" problem, and more than half say-
ing (in answer to a different question)
that the performance of their policy
platform had been "poor" or "fair" on
policy/charging integration. Note that
many of those who did not rate it as a
problem are operators that have so far
avoided the issue by not attempting use
cases that require integration – mean-
ing that among those who have at-
tempted such integration, the great
majority have run into difficulties.
In the next section, we consider the po-
tential solutions and remedies.
Figure 4: 3GPP Architecture, Prior to Sy Interface
Source: 3GPP

Technology Options for Policy & Charging
To understand what the options are for integration of policy and charging, opera-
tors must first look at their own situation, and answer some key questions:
 Who "owns" charging and billing internally? Where the network department
owns it all, integration may be simpler. Network departments often do their
own online charging, though offline (i.e., contract customers with monthly
bills) is often owned by IT. Organizationally, the integration process is simpler
if a single department owns it all, or if IT and networks have been merged.
 What are the key use cases, now and in the future? The greater the com-
plexity, the more likely it is that proprietary or pre-integrated approaches
will be necessary. In any case, success requires good cooperation and un-
derstanding during the selection process between the network and/or IT
departments that specify policy platforms and the product marketing
teams that specify the service plans that run on those platforms.
 How often are service plans likely to change? Rapid change implies very
tight integration among policy, charging and other IT functions, especially
the product catalog and subscriber profile information, in order to speed
up implementation of these changes.
 Who supplied the existing policy servers and charging or billing systems,
and when? Where deployment was recent, operators may be reluctant to
replace existing systems; otherwise, they may be in a position to consider
pre-integration as a viable option, from a single supplier.
In general, use cases (i.e., service plans) are becoming more complex and chang-
ing more rapidly, and this is likely to require tighter integration of policy and charging
over time, as well as integration with other IT elements. This will be especially true
where policy and charging are triggered by real-time events, based on network
state (e.g., local cell congestion), subscriber state (e.g., location, device in use), or
account state (e.g., remaining data quota or currency balance). Increasingly, too,
policy conditions may be concatenated (e.g. IF subscriber is platinum AND cell is
congested AND application in use is video, THEN apply the following policy).
Figure 5: Telco Plans for Integration of Policy & Charging Systems
Question: Over the next two to three years, which of the following best describes the likely rela-
tionship between your company's policy server and its OCS or billing system?
Source: Heavy Reading survey of network operators, 2013; N = those with plans for integration

Figure 5 shows that of those who were planning to integrate policy and charging,
62 percent said that they would opt for an enhanced proprietary interface or for
pre-integration, against 38 percent looking for a standard interface. In view of the
strong support in general among network operators for use of standards where they
exist, this implies plenty of skepticism about whether Sy is ready to meet all of the
real needs of operators.
The Case for Sy
The Sy standard is part of 3GPP Release 11, which was ratified in June 2013, and
enables the PCRF to base policy decisions on real-time subscriber spending infor-
mation (e.g., balances and spending limits) that are held in the OCS. Compared to
the previous situation, the availability of Sy is a clear step forward for policy and
charging integration that should give the whole area a boost over time.
With Sy, the OCS can maintain policy counters and notify the PCRF when spending
limits are reached, enabling it to take appropriate actions, such as applying
changes to QoS parameters, or data throttling. Sy allows for a number of balances
(e.g., related to different services, devices or customers) to be maintained in various
formats, including money, volume, time or events, with the ability to reset balances
and thresholds (e.g., every day at midnight). As elsewhere in the 3GPP control ar-
chitecture, signaling is based on Diameter.
An example of how this new capability could be used is shown in Figure 6, where
policy counters are held in the OCS, and requested by the PCRF when a subscriber
profile indicates that this should be done.
Figure 6: A Use Case for Sy – Information Flow for Policy Based on Spending Limit
Source: 3GPP

Sy has a number of useful features:
 Eliminates redundancy and double-tracking of quotas in PCRF and OCS:
usage thresholds may be maintained in the OCS and used by the PCRF
 Reduces synchronization issues: subscriber spending lookup on demand/in
real time by PCRF
 Provides ability to shape/influence active sessions in real time
 Potentially every/any subscriber billing event can be exposed to policy,
with counters maintained in OCS
 Utilize counters for marketing schemes: counters may be used for "limits" or
upsell deals to increase loyalty
 Reduces integration time and costs between PCRF and OCS: facilitates use
cases that have a monetization component
 Roamer balance validation: enables the PCRF to check whether the out-
bound roamer has a relevant balance for roaming before authorizing the
connection
Use cases for Sy envisaged by the 3GPP include:
 Management of volume-based usage tiers, including application of new
policies when certain usage thresholds are reached
 Free or discounted pricing based on advertisements, high consumption,
etc.
 Promotional services such as "free" usage for limited period or volume
 Revenue sharing with third-party applications and content providers
As with any standard, Sy-compliant elements from different vendors may still require
integration work and interoperability testing. For example, different vendors may in-
terpret Diameter standards differently, and some OCSs may not support all of the
required Diameter commands (e.g., re-authorization). Data models may also differ,
making it difficult to add new information elements, and new charging models may
be difficult to deploy.
Unlike other parts of the PCC standard, Sy does not define the actual events. Sy
defines a way for the OCS to notify the PCRF that an event happened, but not what
the event was. The standard doesn't define a set of predefined events that could
be agreed upon between the PCRF and the OCS. The meaning of the events must
somehow be synchronized between the two systems, which can result in synchroni-
zation and integration issues.
Sy Pre-Integration
The fact that the new Sy interface was not ratified until 2013 means that the most
widely used approach to date has been proprietary integration of one vendor's
policy server with another vendor's charging or billing systems. Although no firm data
exists, we believe that while some network operators use the same vendor for both,
the majority use different vendors for each of these. The two products – policy serv-
ers and charging systems – may also be at different stages in terms of end-of-life, or
be owned by different departments, or both, and this may rule out a pre-integrated
approach, at least initially.

Until recently, pre-integration by a single vendor using its own products has been
relatively rare, but this approach has recently been on the rise. This is partly because
more (and better) pre-integrated solutions are available from more suppliers, but
also because a pre-integrated solution may be better suited to a more sophisti-
cated strategy that is focused on supporting a grow-
ing and rapidly changing range of service plans and
options. Sy pre-integration can ensure that rapid ser-
vice innovation is better met, and that future en-
hancements are simplified. This can shorten the de-
ployment time and reduce costs – both common
complaints in our surveys of network operators.
Complements to Sy
Whether pre-integrated or not, Sy alone may not be sufficient; additional comple-
ments are required to fully support operators' monetization efforts. These solutions,
which can be mostly offered as part of a pre-integrated approach, increase the
number of BSS-PCRF touch points in an attempt to deliver greater operational and
marketing benefits. Some of the main complements are described below.
Unified Product Catalog
In particular, pre-integration in some cases supports the use of a unified product
catalog with a shared data model. Product catalogs define in a structured fashion
what individual products consist of, but it's by no means unusual for operators to
have multiple catalogs for different parts of their ecosystem, with no common defi-
nitions. With a unified product catalog, operators can initiate new policies from
within either policy or charging products, and changes (including configuration and
provisioning) flow through automatically, accelerating new service deployment.
Changes can be made in real time, and data inconsistencies are avoided. As op-
erators move to create plans that cross network boundaries (e.g., 3G, 4G and fixed),
this need is likely to increase.
In our 2013 survey, we asked operators whether they were looking to have a unified
database and product catalog across the OCS and PCRF (Figure 7).
Figure 7: Strong Support for Unified Product Catalog
Question: How important will it be for your company to have a unified database or product
catalog across OCS and PCRF for unified product management?
A pre-integrated solution may be better
suited to a policy strategy that is focused on
supporting a growing and rapidly changing
range of service plans and options

Although current 3GPP standards do not include this capability, 40 percent of re-
spondents said this was vital to achieving business objectives, with a further 49 per-
cent saying it was desirable; only 10 percent said it was not required.
Unified Analytics
It's also worth noting here that the interfaces between network and IT functions are
likely to become more complex as the new emphasis on service innovation and
differentiation strengthens. For instance, there will be an increasing need to link pol-
icy creation directly to analytics platforms that seek out patterns, analyze the results
of changes, and recommend creation of new policies based on this analysis.
In our 2013 survey, almost 80 percent of respondents said they intended to link policy
management and analytics by 2015, suggesting the strength of interest in this topic.
Already, we are seeing a closer connection between policy and analytics using
network-side information extracted from DPI software. Integration of BSS and PCRF
should open the way for another level of analytics – providing operators with a uni-
fied view of both network and subscriber behavior, and thereby contributing to
smarter and more effective data offerings.
Unified Subscriber View
Equally, there will be stronger linkages between policy and CRM or CEM so that, for
instance, CRM units are directly informed in real time as policy decisions impact
subscribers directly. For example, a policy decision that reduces a customer's con-
nection speed in the presence of congestion may prompt the subscriber to call
customer care. The customer care representative armed with the ability to see this
in real time has an opportunity to upsell the customer to improve their experience.

Service Innovation in Practice
Ultimately, there must be a business justification for the integration of policy and
charging, and this justification takes the form of service plans that enable operators
to differentiate their services from competitors. Increasingly, operators are moving
forward, or say that they plan to do so. Figure 8 provides an indication of the kind
of plans now being deployed.
Figure 8: Service Plan Ideas, 2013-2015
USE CASE DEPLOYMENT COMMENTARY
Bandwidth
throttling
Widely
deployed
Linked to quota usage, monetary balance or other factors. Being replaced or
supplemented by use cases that e.g., give users time to upgrade or add quota.
Roaming bolt-
on & similar
products
Widely
deployed
Many operators, especially in Europe, have added these products, typically based
on a per-day or per-MB charge.
Application-
based
charging
Widely
deployed
Especially in emerging markets, but increasingly elsewhere. Approaches continue to
evolve; most commonly, this entails zero-rating certain apps – especially social net-
working, but apps such as music and video are being added, often for a small fee.
Shared usage
Now being
widely
deployed
Especially in the form of family plans, but also in the form of (small) enterprise plans.
Growing interest also in multiple device plans and multi-network plans, though these
are little deployed so far.
Turbo boost
Limited, but
strong interest
Mostly driven by video, but also gaming (a niche application, but one with greater
need); may be linked to specific types of devices; may be temporary or permanent.
QoS-based
prioritization
In development
Prioritizing certain applications (e.g., VoLTE) or subscribers (e.g., platinum subscribers)
in real time at cell level is attracting growing interest.
M2M services Limited
Typically based on different charging and policy principles, with many variants to
meet different kinds of M2M needs.
Parental control
or other filtering
Limited, but
growing
Recent increase in interest is a result of the rapidly growing ownership of portable
devices by children; sometimes monetized, sometimes bundled into service; more
dynamic and customizable features are a key recent trend.
Cloud storage Spreading fast May be provided free or for a small fee, sometimes in partnerships.
Data sponsor-
ship & revenue
Limited, but
growing interest
The much-vaunted “two-sided business model" has been hard to build, but in the
past year there are more examples of successful cooperation, and some high-profile
efforts by operators to build partnerships.
Rolling quotas
Limited, but
spreading fast
Charging is based on automatic renewal offers (can be based on opting in) when
quota is running out, rather than just user-initiated or time-based (e.g., monthly). Can
be linked to charging balance.
Loyalty bonuses,
quota carry-
forward
Limited, but
spreading fast
A churn reduction scheme that is staging to spread more quickly, offering customers
automatic upgrades, extra quota, prioritization and so forth – e.g., after a year with
an operator, on the subscriber’s birthday, etc.
Yield manage-
ment
Limited
Special offers based on low usage in particular places or at particular times, or both.
One simple use case entails not metering data traffic during certain off-peak hours.
Cross-service
bonuses
Limited
Especially relevant in emerging markets, where the user may be encouraged to use
data services by receiving a defined quota for certain levels of usage.
Source: Various

Figure 9 lists some of the schemes that have been deployed by named carriers. This
is simply a sample from an increasingly long list of new service plans and options
being deployed, with plan innovation accelerating rapidly during 2014.
Figure 9: Examples of New Service Plans
COMPANY PLAN[S] PRICING BASIS
Airtel Africa
(17 countries)
Radio subscription, partnering with Radio Express
Free; commercial arrangement with Radio Express
unknown
Airtel India Google Free Zone
Use of Google (Search, Gmail, Google+) not
counted against data volume; commercial terms
unknown; other operators are also participating
AT&T MobileShare family plan
Five smartphones/lines share one plan with 10GB
data (and unlimited talk/text) for $175 per month
AT&T Sponsored Data
Content owners pay for data delivered to
customers; no pricing information released
Claro Brazil Free Facebook and Twitter Free; no commercial deal in place
Comcast Improved video quality for Netflix customers Paid for by Netflix; terms undisclosed
DT Germany
Spotify service bundle (unlimited use premium
quality), Premium Speed Pass, automatic re-
purchase outside normal billing cycle
Spotify: Several tariffs available from €9.95 per
month
Etisalat Try before you buy – 15MB of free data Free up to limit
IDM Lebanon
3G/DSL bundles, single tariff with plans that include
free social media traffic at weekend, free messag-
ing services, free local news service/apps
Various
Maxis
Maxis Bites: Exclusive offer to certain customers of
free use of Facebook, Twitter and WhatsApp
Various packages; unlimited browsing and chat on
Facebook, Twitter and WhatsApp is RM8 per month
Mobilink
Pakistan
Mobilink Web Pass
10 minutes of free Internet use, unlimited use of
Facebook and Twitter, data compression
Movistar Usage limited to only one or two application types Lower monthly tariff for restricted services
MTN Uganda
"Coke Connect" free data promotion with Coca
Cola
Sponsored data (10MB free to users); other
operators in Africa have run this promotion;
Samsung also involved in some cases
MTN Uganda Charging plan based on African movies or music N/A
MTS Ukraine Free usage of Yandex Maps and Navigator
Traffic not counted against allowance;
commercial terms not known
O2 Ireland "Oonair"; mobile video sharing
Premium cloud-based secure video sharing
service; €5 per month
Oi Brazil Maps & navigation service (Oi Mapas)
Free; commercial terms with partner NDrive not
known
Orange Tunisie
Points-based loyalty program (Orange Fidelite)
linked to spending
10 points per 1dt spent, can be cashed in for
services and products from Orange
Source: Various

Figure 9: Examples of New Service Plans (Continued)
COMPANY PLAN[S] PRICING BASIS
Pelephone
Multi-device ("Multi-surf") plans (up to five devices
on one cellular plan); "double speed" add-on, free
for six months; Musix and SuperTV flat-rate add-ons
Various
Reliance India Unlimited use of WhatsApp and Facebook
R16 per month; apps data volume not counted as
data
Sprint Cloud storage
Unlimited cloud storage via partner PogoPlug for
$4.99 per month
Tata Docomo YouTube ReCharge
50% reduction in data fees; 100MB for R9, other
plans available
Telekom
Austria
Parking application "Handy Parken"
Free app that manages parking throughout
Austria; also available in other TA countries
Telus Canada SharePlus
Share data quota between both different devices
and family members
Telus Partnering with Microsoft to promote Skype
Purchase Skype credit via Telus account; Skype-
ready phones also offered
Turkcell
Automatic add-on packs at quota limit, free data
from 2AM-6AM, Facebook data plan (flat fee,
unlimited use); Twitter Zero; turbo speed plan
Facebook pack is 6 lira per month; paid for unlim-
ited Twitter and Twitter+Facebook also available
Ucell
Unlimited access to both global and local social
network sites
$0.10 per day
Vivo Brazil
Access to cloud-based digital books (classics,
atlases, dictionaries, etc.)
3,000 works, free for first month, then 0.99 BRL
Vodafone Fiji
Daily data passes, speed boosts, loyalty awards
(planned)
Daily data passes: 180MB for $1.80 per day
Vodafone
Greece
Internet4 Sharing – multiple devices on a single
account
Smartphone plus four other devices, €35 for 20G;
other tariffs available
Vodafone
Greece
Napster by Vodafone
Unlimited access to Napster plus 250MB for €5 per
month
Vodafone Italy Parental control and anti-malware package
Free for first three months, then €2 per SIM per
month
Vodafone NZ Vodafone Music (Top 40 chart hits) Four weeks free, then $1.50 per week
Vox Telecom Wildfire gaming service
Gaming ports prioritized; free 40GB taster, then
R350 per 20GB; other packages available
Source: Various

Summary: The Road Ahead
Practically speaking, the situation for operators has improved in the past 12-18
months, partly as a result of the entry into policy management of new players with
a heritage in IT and BSS, as well as a shift among almost all vendors to focus more
intensively on integration between policy and charging (albeit with varying suc-
cess). Operators are realizing that having a single view of products and customers
increases flexibility, improves accuracy and can lower costs as well.
This is reflected in our surveys, with the proportion of respondents rating integration
of policy management and charging/billing systems as a major challenge falling
from 59 percent in 2012 to 51 percent in 2013. This does not mean that the challenge
is no longer there; there is still a long way to go for most operators. As noted above,
this challenge is exacerbated where operators are struggling to build a policy busi-
ness case based on service innovation, or where there are low levels of cooperation
between network and product marketing divisions.
Operators have come a long way since the early mobile data market of "all you
can eat" services, metered data and simple quota-based services. As shown in the
previous section, the past year or two has seen a flowering of new service ideas and
plans, with some operators now offering dozens of new service packages and
options. There is every indication that plans and options will become ever more
complex, as early success encourages operators to become ever more innovative
in how they serve customers. And as Figure 10 shows, these new service ideas can
(and increasingly are) implemented by tightly integrating policy and BSS elements.
Figure 10: An Example Linking PCRF & BSS
Source: Comverse

However, there is a long way to go if operators are really to make the big strategic
shift required to overcome the slide in revenues and margins. Some operators have
barely begun the journey, and many new business cases and service packages
remain largely in the planning stages. Furthermore, operators need to recognize
that while they need to be progressing toward specific short-term business objec-
tives, there will always be another goal ahead. There needs to be a commitment to
continual innovation.
Keys to success include the following:
 Removal of internal barriers between departments
 Appropriate integration of policy with charging and other back-office systems
 Reorientation of policy away from traffic management to service innova-
tion, with possible change in suppliers
 Closed loop with analytics to aid service innovation – analytics that is not
just network-oriented, but a true blend of network and subscriber analytics
Properly specified, a policy management platform can be the central element in
this revolution, but operators must recognize that while the Sy interface between
PCRC and OCS is an important advance, it may not be enough. Sy alone does not
allow a full and complete integration, and any two PCRF and OCS entities must
leverage it to create a complete set of event terminology. Beyond Sy, data mone-
tization requires smooth communication between PCRF and OCS, for example in
the form of unified catalogs and a single subscriber view.
A single-vendor approach may best achieve this, but will not be appropriate for all
operators, not least because it may not fit with existing product lifecycles, or may
not be handled by a single division within the network operator. But whether using
one or multiple vendors, it is clear that operators can no longer afford to maintain
separate silos. To achieve the kind of complex and ever-changing service innova-
tions described in this paper, operators must find ways to automate communication
between BSS and PCRF. It may be no easy task, but is surely essential if network
operators are to retain their relevance in the Web applications era.

Background to This Paper
About the Author
Graham Finnie
Chief Analyst, Heavy Reading
Graham has been working as an analyst and consultant in the telecommunications
sector for more than 20 years. He joined Heavy Reading in 2004, following a ten-
year tenure at the Yankee Group, and has since been responsible for a wide range
of research, focusing primarily on next-generation broadband networks, services
and applications. He became Chief Analyst of Heavy Reading in 2007.
Graham's most recent report for Heavy Reading is RAN Congestion Control & the
Road to QoE, published in September 2012. He is also the author of our semiannual
Policy Control & DPI Market Tracker. Graham has also hosted numerous Webinars
and Live events for Light Reading, and is a regular speaker at other major industry
events. Before becoming an analyst, he was editor-in-chief of the award-winning
industry paper Communications Week International.
Graham is based in the U.K. and can be reached at finnie@heavyreading.com.
About Heavy Reading
Heavy Reading, the research division of Light Reading, offers deep analysis of
emerging telecom trends to network operators, technology suppliers and investors.
Its product portfolio includes in-depth reports that address critical next-generation
technology and service issues, market trackers that focus on the telecom industry's
most critical technology sectors, exclusive worldwide surveys of network operator
decision-makers that identify future purchasing and deployment plans, and a rich
array of custom and consulting services that give clients the market intelligence
needed to compete successfully in the global telecom industry.
Heavy Reading
P.O. Box 1953
New York, NY 10156
+1 212-600-3000
www.heavyreading.com

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