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WHITE PAPER

EV-DO: CONTROLLING CHALLENGES

AND CREATING REVENUE OPPORTUNITIES

WITH TIERED SERVICES


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EV-DO: CONTROLLING CHALLENGES AND CREATING REVENUE OPPORTUNITIES WITH TIERED SERVICES 2

INTRODUCTION

EV-DO, the new high-speed wireless

technology, is coming fast to the market.

While offering significant speed improve-

ments and opening up a set of new

application opportunities for WirelessService Providers, EV-DO brings its own

set of challenges to the table, including

usage issues such as poor network

performance, additional costs, and user

complaints. Service Providers need to be

proactive about dealing with these issues

to fully leverage the benefits of EV-DO.

In this document well discuss the chal-

lenges that EV-DO presents and identify

a set of practices that Service Providers

can implement to help control costs and

leverage EV-DO to increase revenues.

EV-DO MEANS IMPROVED

OPPORTUNITIES AND BENEFITS

By implementing EV-DO, Service Providers

have the ability to improve speeds signifi-

cantly, in fact, essentially equivalent to that

of broadband. CDMA2000 1xEvolutionData Only (EV-DO) is a recently imple-

mented technology that optimizes the

radio network to provide high-speed data

services to wireless services. With base-

station upgrades, Wireless Service

Providers can deliver speeds of 300 to

600 Kbps with peak rates up to 2.4 Mbps

for downloads effectively accelerating

wireless device data speeds up to 10

times faster than whats available today.

EV-DO is already being implemented by

major Service Providers such as Verizon

Wireless and Sprint in the United States

and others worldwide. According to

the CDMA Development Group (CDG),

CDMA2000 1xEV-DO is leading in the

deployment of 3G broadband networks

worldwide, with 11 commercial networks,

18 additional systems to be deployed this

year, and an established subscriber base

exceeding 8.3 million users.1

With improved speeds, Service Providers

are able to provide superior application

performance to subscribers with handsets

or laptops equipped with EV-DO cards. It

opens up a whole new range of applications

that may not have been practical at slowerspeeds, including interactive gaming, down-

loads, and higher speed browsing, as well

as delay-sensitive applications such as

voice and video over IP.

For corporate customers, it means mobile

subscribers can use their corporate email

programs rather than maintaining an addi-

tional webmail account. Web pages will

load much faster, and subscribers will be

able to access and work with corporate

applications previously not practical with

slower speed wireless data services.

EV-DO ALSO MEANS CHALLENGES

With this increase in speed, wireless

networks will effectively face the same

performance challenges as broadband

networks: bandwidth is scarce and EV-DO

offers always-on high-speed services.This puts Service Providers at risk of an

over-consumption of available bandwidth

when it is offered at an unlimited flat rate

to subscribers.

In many broadband networks, experience

has shown that 5% of subscribers are

known to consume up to 60% of bandwidth

in resource-intensive applications such as

peer-to-peer (P2P) file sharing and gaming.

In some cases, the connection is maintained

indefinitely, tying up network resources. With

the widespread use of EV-DO, these same

issues will become a challenge for wireless

Service Providers.

Equally serious from a Service Providers

perspective is the loss of revenue from voice

services. EV-DOs higher speed makes it

attractive for subscribers to use Voice over

IP (VoIP) over the data network especially

if the data service is offered at a flat rate

with high bandwidth and reasonable low

latency. This jeopardizes the Service

Providers ability to sell voice minutes and

push-to-talk services.

This combination of unlimited flat-rate

access and always-on high-speed service

threatens carriers with revenue loss andincreased customer care. In spite of the

improved speed and because of it

subscribers can face poor quality service

and unpredictable network access.

1 Press Release CDMA2000 1xEV-DO IS LEADING THE DEPLOYMENT OF 3G BROADBAND NETWORKS WORLDWIDE, CDMA Development Group, September 7, 2004.


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MEETING EV-DO CHALLENGES HEAD ON

There is a solution to control costs, prevent

EV-DO traffic from devouring revenue, and

even increase revenue. This solution involves

creating tiers of services based on volume,

quality, and/or speed. To do this, ServiceProviders must meterusage limits and

use policy-based control to enforce tier

parameters based on subscriber usage.

CREATING TIERED EV-DO WIRELESS

DATA SERVICES

One of the advantages that the wireless

industry has is that subscribers are generally

accustomed to some form of limit, such as

limited calling minutes. As a result, it should

be a straightforward process to get cus-

tomers to adopt tiered services. Instead ofoffering flat-rate services, Service Providers

can create a set of tiered services that effec-

tively control usage and provide additional

revenue opportunities. Tiered services can

be based around volume of data consumed,

bandwidth, and quality of service.

VOLUME-BASED TIERS

In this type of service, a limit is set on the

volume of data that can be consumed over

a period of time, which can be effective at

controlling users that monopolize band-

width. Once the volume limit is reached,

service can be limited or discontinued. Forheavy-volume users, a self-serve portal can

be set up to allow them to increase their

volume for an additional premium charge,

either for a short period of time to the

end of the month, for instance or on a

continuous basis.

BANDWIDTH-BASED TIERS

Bandwidth-based tiers limit how much data

a user can pass in and out of the network.

An EV-DO network may support data rates

of 600 Kbps: for users who find normal

1xRTT slow but dont want or need the fullspeed of EV-DO, bandwidth tiers could be

set up to increase their maximum available

speed per second by two or three times.

This is similar to DSL models in which

subscribers have a basic or lite service

from which they can upgrade to subse-

quent levels for additional charges.

QUALITY-OF-SERVICE

(QOS)-BASED TIERS

Quality of Service becomes extremely

important in VoIP, video, and some enter-

prise services. Poor QoS for these types of

services means no latency or jitter guaran-

tees, which will result in the voice traffic

breaking up and video traffic being choppy

and difficult to watch. In general, best-effort

QoS will provide an inconsistent experience

for the subscriber, with the experience

being good on some occasions and bad

on others.

A premium QoS-tiered service will ensure

that subscribers do not experience these

issues and will ensure consistency in their

experience.

COMBINED TIERS FORMAXIMUM FLEXIBILITY

These three types of control can be mixed

and matched in almost limitless combina-

tions to give subscribers real flexibility in

their services. Here are a few examples:

> Basic tier email and browsing only:

unlimited volume, 256 Kbps bandwidth,

best-effort QoS

> Mid-tier service: 1 GB volume per

billing period, 400 Kbps bandwidth,

best-effort QoS

> High-volume tier: 3 GB volume perbilling period, full 600 Kbps bandwidth,

best-effort QoS

> Enterprise tier: 3 GB volume per

billing period, full 600 Kbps bandwidth,

premium QoS

IMPLEMENTING TIERED EV-DO SERVICES

To effectively implement tiered services,

Service Providers must be able to both

meter usage and apply policy-based

controls on subscribers to take necessary

actions to ensure the parameters of theservice tiers are being followed.

METERING USAGE

In order to offer and control tiered services,

Service Providers must be able to effectively

meter usage. Every subscriber has a usage

limit defined for their service tier: metering

tracks the amount of data a subscriber

transfers over a period of time normally

the subscribers billing period and verifies

usage against this limit. If the subscriber

exceeds allowed usage, policies in the policy

control system outline actions to be taken.

Metering works by totaling up the usage

information contained in the RADIUS

accounting messages generated by the

PDSN. These records are generated during

every session the user starts and are fed

through the AAA to the metering system.

The metering system adds the byte counts

from these messages to a running total

and saves it as a total in a usage profile

for the subscriber. Should the total in the

subscribers profile exceed the limit of the

service package, an action is initiated

against the subscriber by the control

system. Once a month, on a given date,the running total in the subscriber profile

is reset to zero.

POLICY-BASED CONTROL

To effectively and flexibly control sub-

scribers who have reached their usage

quota, the metering system must be

accompanied by a policy control system.

This system is responsible for managing

subscriber and action profiles to deal with

heavy users. Once quotas are reached,

the policy control system will provide

instructions to the PDSN to control a

subscribers path through the network.

When the subscribers usage exceeds

a service tier as defined by their profile,

this results in some type of action being

applied to the subscribers service. Several

different policy actions can be set to deal

with different tier scenarios:

TIERED

SERVICES

METERED

USAGE

POLICY-BASED

CONTROL


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BRIDGEWATER SYSTEMS

WWW.BRIDGEWATERSYSTEMS.COM

Copyright 2005 Bridgewater Systems

Corporation. Bridgewater and the Bridgewate

logo are registered trademarks of Bridgewate

Systems Corporation. All rights reserved.

> A subscriber that has used up the

allotted service usage for the month

can be disconnected from the service

until the following billing period begins.

> Alternatively, using a hotlining feature

available in the PDSN or Home Agent

(HA), the Service Provider can redirect

subscribers to a portal that offers contin-

ued service for the month at a pro-rated

fee. This presents convenience to the

subscriber and an excellent revenue

opportunity for the Service Provider.

> The Service Provider may wish to reduce

bandwidth back to 128 Kbps to discour-

age a subscriber from excessive usage.

Policy-based control provides an excellentopportunity to encourage subscribers to

upgrade services. Service Providers can

offer a try-before-you-buy plan allowing

subscribers to take a free trial of the next

tier for a limited time before again being

subjected to their service plan policies.

And with subscriber self-serve portals,

Service Providers give subscribers the

ability to make changes to their tiered

services in real time, offering flexibility

and convenience.

AAA / PDSN SUPPORT AND STANDARDS

Implementing tiered services in an EV-DO

network requires that the AAA and PDSN

or Home Agent are able to support band-

width profiling, bandwidth limiting, and user

redirection. Standards such as IS-835D arein development that will allow the definition

of service tiers within the AAA system and

the PDSN. Although this standard is not

yet available, there are vendor-specific

features available on many PDSNs and

HAs that can make this a viable solution

in the short term. With full support from

AAA servers, a complete system can be

put in place today with a simple migration

to standards-based solutions when they

become available. For PDSNs that do

not support bandwidth limiting, metering

can still be performed but with limited

options: once the subscriber exceedsallotted usage, the only option is to

purchase more usage.

CAPITALIZING ON EV-DO

Its not enough for Service Providers to

simply offer flat-rate EV-DO services. To

effectively capitalize on EV-DO, Service

Providers must be in a position to control

the small number of very heavy users

who add significantly to the operational

expenses of the network. They must also

be able to use tiered services to launch

new packages of different speeds, data

volumes, and quality levels to generate

new revenue streams over and above

basic flat-rate services.

To do this effectively, Service Providers

must meter subscriber usage and use

comprehensive policy-based controls to

manage their service tiers and extract

maximum value from EV-DO networks.

ABOUT BRIDGEWATER SYSTEMS

Bridgewater Systems develops the industrys

most advanced subscriber-centric policy

management software for IP-based services.

Its solutions help global Service Providers

maximize profits and launch new servicesfaster. Bridgewater does this by providing

Service Providers with a unified view of their

subscribers across all access technologies.

With Bridgewaters software, Service

Providers have an intelligent policy-decision

point for the management of subscribers,

applications, and network resources. The

Bridgewater Systems product suite delivers

high-performance policy management via its

market-leading authentication, authorization,

and accounting (AAA) and Dynamic Host

Configuration Protocol (DHCP) systems. It

also offers a range of modular products for

application support, mediation, and dynamicbroadband management. Bridgewater

Systems proven carrier-class products

deliver on-demand data services, extensive

revenue-capture capabilities, and out-of-the-

box value that can be deployed in weeks

instead of months.

More than 40 leading Service Providers

from around the globe (including Verizon

Wireless, Sprint PCS, Bell Mobility, and

Virgin Mobile USA) trust Bridgewaters

technology and business insight to help

them deliver world-class services. Founded

in 1997, Bridgewater Systems is a privately

held company.

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