the future of data rating and charging redknee position paper
TRANSCRIPT
REDKNEE THE FUTURE OF DATA RATING, CHARGING AND POLICY
Redknee ’The Future of Data Rating and Charging’ © 2010 All Rights Reserved Page 2
The Future of Data Rating,
Charging and Policy
The wireless industry is in the midst of a
transformative phase. While it is true that
it has always been in a state of constant
growth, the progress we are seeing today is
more disruptive than anything seen since
the introduction of the first handheld
wireless handset in 1973.
As with any industry transformation, there
will be companies who plan for change, and
those who resist. New technologies and
new business models will need to be
embraced. This paper is about how service
providers can best prepare to ensure they
have the systems in place to fully leverage
the benefits of new 3G and 4G networks.
Real-time rating, charging and policy play an
important role in the new ecosystem,
helping to protect your network and enable
new charging models, better quality of
service, and greater customer loyalty.
A Change in Mindset
With the introduction of 4G services and
LTE networks, the wireless business model
is rapidly changing. Flat rate data plans are
being replaced by a multitude of new tiered
pricing models that will end up being
beneficial, and in many ways more cost
effective, for most subscribers. Under flat
rate plans, the majority of subscribers have
been subsidizing the heavy data use of a
few; paying high fees for a data plan they
may actually use very little of. Today’s
problem is that many of the low volume
users are now becoming heavy users
themselves, so this model is no longer
efficient. New data-intensive devices such
as smartphones, Apple’s iPhone and iPad,
along with services such as mobile
broadband and YouTube have made almost
all subscribers ‘data-hogs’.
Watching an hour of YouTube clips is the
equivalent in terms of data usage to
sending a million text messages.
Downloading a movie over a mobile device
equals almost 400,000 emails. And laptops
that surf the Internet over a mobile
network are further taxing network
capacity. With the growing field of machine
to machine (M2M) communication around
the corner, soon practically every device-
from the vehicle you drive, the gas meter
outside your home, and even your
refrigerator - will be tapping into data
networks. This sudden uptake in data
demand has left operators scrambling to
increase capacity, dumping millions of
dollars into building out their networks in
hopes of keeping up with today’s
unquenchable demand for data.
In order to combat this problem, many of
today’s operators have been using methods
to target their heaviest users; purposely
slowing their network speeds and reducing
Redknee ’The Future of Data Rating and Charging’ © 2010 All Rights Reserved Page 3
the quality of service for the heaviest users.
Redknee believes this is the wrong
mindset. Service providers should be in the
business of providing service- not limiting it.
Our data rating, charging and policy
management solution enables operators to
support new pricing models that encourage
increased usage and better quality of
service – while boosting average revenue
per user (ARPU) and protecting the network
from capacity strains.
Changing Business Models
Unwired Insight reports that mobile Web
traffic will increase more than 20 times over
the next four years. To prepare for this,
many of the world’s leading operators are
upgrading their network architecture to
Long Term Evolution (LTE). This provides
the much needed increased capacity and
speeds to help accommodate today’s new
devices, and will change some long standing
business models.
One of the most significant changes will be
the increase in third party partnerships
between operators and content providers,
including mobile advertising. In the past,
mobile content was limited to ringtones
and photo sharing. Since the introduction
of the iPhone and other smartphone
devices, a new world of content including
movies, mobile ‘apps’ and access to
Facebook and Twitter have changed the
game plan. Because this new content
comes from new partnerships and requires
quick on-boarding to an operator’s
network, it is imperative that service
providers establish back-office support
systems (OSS/BSS) that can adapt to this
environment. The importance of an open
architecture and APIs cannot be overstated.
Furthermore, the ability to support service
level agreements (SLAs) and QoS standards
puts added responsibility on the service
provider. At Redknee, all of our solutions
have been built on these standards, and will
aid in supporting the growing list of SLAs
resulting from new partnerships.
Redknee’s Three Pillars of Success
1. Rating and Charging Flexibility
With today’s ever-increasing demand for
data, traditional all-you-can-eat payment
plans are no longer practical from the
service provider’s perspective, and it is clear
that operators are moving towards tiered
pricing for data services. Tiered pricing
plans are actually more beneficial to all
subscribers. Low volume users no longer
will be subsidizing the use of heavy users,
and new ‘bundles’ will be introduced that
will give subscribers the types of services
they are most interested in- and willing to
pay for.
Although paying for what you use is
certainly a concept most subscribers can
understand, tiered pricing puts new
demands on an operator’s rating and
charging solution. Instead of a simple flat
rate, now various packages and tiers of
service need to be individually rated,
Redknee ’The Future of Data Rating and Charging’ © 2010 All Rights Reserved Page 4
charged and enforced. Redknee’s Next
Generation Rating and Charging (NGRC)
enables operators to track, rate and charge
for data usage in real-time. It enforces
tiered pricing levels and supports single use,
or ‘bolt-on,’ services.
Redknee’s NGRC provides the flexibility
required to support almost any type of
bundled offering. Service providers can
help build customer loyalty by offering
more personalized packages. For instance,
a Facebook bundle that supports enhanced
social networking apps and services aimed
at high school and college aged subscribers;
or for the business user, an instant
messaging/email bundle. For long road
trips, parents can opt for a ‘bolt-on’
package that allows for unlimited movie
downloads so their kids can be entertained
on the long car ride.
The same type of pay-for-what-you-use
concept has been fairly standard in the
prepaid market, which has seen an upsurge
as the quality of prepaid handsets has made
this type of service more appealing.
Prepaid Blackberry’s and 3G Smartphones
now provide the types of services and
content to a prepaid market that only
postpaid subscribers used to enjoy.
Redknee believes that payment type
shouldn’t dictate service availability.
Subscribers should be able to get whatever
type of service they want, and pay for it
whichever way works best for them. To do
this, service providers need a rating and
charging system with the flexibility to
dynamically track quotas, usage, rates, and
individual profiles - all in real-time.
2. Integrated Policy Control
With flat-rate pricing, there is no incentive
to promote heavier usage of data. Instead,
service providers have been using policy
management to police their networks and
dissuade the heaviest users – even going to
the lengths of degrading service and
sending out warning notices. With tiered
pricing and prepaid plans growing in
popularity, Policy Control, or PCRF, shifts
from controlling costs and degrading
service, to generating revenue and ensuring
quality of service.
Redknee considers this the second pillar of
success. Policy Control, especially when
integrated to the charging layer, helps to
enhance the user experience. It can track
when subscriber’s data use goes beyond a
certain threshold so the operator can send
balance notification alerts – and help avoid
the dreaded ‘bill shock’. User profiles and
preferences can be supported, creating a
more personalized user experience and
helping to engage and empower the
subscriber. In a recent survey, Light
Reading predicts service providers will add a
new ‘policy’ every six to eight weeks.
Polices set around service delivery will
impact various triggers, including location,
network type, device, the subscriber’s tier,
URL, type of application, time of day,
subscriber preferences, etc. The list is
practically endless, bringing a new level of
personalization and quality to the mobile
Redknee ’The Future of Data Rating and Charging’ © 2010 All Rights Reserved Page 5
subscriber, greater customer loyalty, and
more revenue to the service provider.
Yet in order to gain these benefits, back
office systems must be closely aligned. In
fact, Light Reading also states that,
“…service providers need to use policy in a
new way and work to integrate it with back-
office operations and support systems and
with other functions such as charging.”
Redknee’s NGRC is a fully integrated rating,
charging and policy solution that is in
production at some of the world’s largest
mobile networks.
3. Personalization
The third and final pillar of success is about
subscriber personalization. Today’s
subscribers have more control over their
entire mobile experience. Service providers
can better segment their market and deliver
highly targeted promotions, including 3rd
party advertisements and incentives based
on all types of criteria- from the type of
handsets subscribers have, to their current
location and demographic data, along with
historical usage patterns.
For instance, if ‘Joe’ regularly uses the GPS
function on his handset, the operator will
want to notify him when a new GIS app
comes out, or send promos for the latest
GPS enabled handset if his two year
contract is about to expire. And perhaps
Joe would like to opt in to receive SMS
coupons for his favorite coffee shop when
he’s in the vicinity. Family plans also benefit
from personalization options. Parents can
assign bandwidth policies to their individual
family members, ensuring that 13 year old
Sarah can’t access Facebook during school
hours, but still provides her with access to
her school’s online homework portal.
Why Redknee
Today’s new services and technologies
require a flexible rating and charging engine
that is pre-integrated with an industry
compliant Policy Management solution, or
PCRF. This powerful trio helps to ensure
service providers can remain competitive in
a world where the old rules no longer apply.
Redknee’s focus on innovation and
technology leadership has led to more than
50 issued patents or patent-pending
applications, many in the area of real-time
transaction management.
The fact is, data has changed everything –
and Redknee’s NGRC is the fully compliant,
flexible, real-time solution that will help you
not only survive, but prosper, in today’s
new data-centric environment.
Below are just a few recent examples of
how some of our customers have benefited
from Redknee’s award winning NGRC
solution.
Zain Kuwait
CEO Khalid Al Omar commented, “Since the
launch of our first 3G connectivity cards in
2006, our data services have gained in
popularity with our youth, Arab expatriate
Redknee ’The Future of Data Rating and Charging’ © 2010 All Rights Reserved Page 6
and inbound roaming market segments. By
launching new flexible, tiered pricing plans,
we are able to bring the benefits of mobile
broadband in a manner that is attractive to
new markets segments, such as the cost-
conscious and light-usage customers, as we
continue to concentrate on driving data
revenue.”
Telefonica O2
Chief Technology Officer, Pat Moynihan of
O2 Ireland, commented about their prepaid
mobile broadband offering, and how
Redknee’s NGRC played a key role.
“It was a priority for O2 to deliver a prepaid
mobile broadband offering to our customers
in 2009. Redknee was selected to deliver the
project based on their technical NGRC
solution that enables our customers to have
real time and flexible charging capabilities.
There was a very strong commitment
throughout the project to deliver on our
customers’ expectations and the feedback
from our customers since launch has been
very positive”.
Bakrie Telecom
At Bakrie Telecom, where the operator is
launching mobile broadband, NGRC is the
solution of choice. “The competitive
landscape that we operate in means that
we are continuously looking to our partners
to provide us with the tools to maximize our
competitive advantage. Our further
investment in Redknee will enable us to
enhance the customer experience, deliver
fresh and innovative services and capture
market share,” stated Muhammad
Buldansyah, Bakrie Telecom’s Deputy
President Director.
VivaCell-MTS
VivaCell-MTS in Armenia also recently
launched a mobile broadband service,
becoming the first internet connection to
many of the regions underserved. Ralph
Yirikian, VivaCell-MTS General Manager,
stated, “The number of VivaCell-MTS’
wireless broadband subscribers has grown
tremendously since the Company launched
its HSPA/UMTS-based 3.5G network,
reflecting the intensifying demand for
wireless broadband access in Armenia.
Therefore, the priority for VivaCell-MTS now
is to be able to support future data traffic
growth. Due to our extremely competitive
market, we are focused on always
outstripping our competitors by providing
differentiated products that appeal to our
customers. Redknee’s support has been
instrumental to our successful launch of the
most innovative mobile broadband services
to the people of Armenia.”
Redknee ’The Future of Data Rating and Charging’ © 2010 All Rights Reserved Page 7
About NGRC
NGRC is a real-time rating, charging, and
policy management solution for mobile
data services. Recognized in 2010 by Billing
and OSS World as the ‘Best Service
Enablement Tool’, NGRC is based on
patented technology and offers
communications service providers the
flexibility and scalability to launch new
services, while creating new revenue
streams based on diverse pricing options
for both prepaid and postpaid subscribers.
NGRC enables operators to rate and charge
for all their data services, including in-
demand offerings such as mobile
broadband and mobile TV, helping them to
monetize these new services and drive
ARPU growth. It gives service providers the
flexibility to charge for these services in
ways that work best for their subscribers,
whether prepaid, postpaid, or a hybrid of
both – and based on time or bandwidth
consumed.
Redknee’s NGRC offers service providers a
flexible and scalable solution that
seamlessly integrates into existing systems,
maximizing the current network
infrastructure and differentiating its
services from the competition. For more
information, please visit www.redknee.com
For more information on Redknee’s rating and charging solutions, visit: www.redknee.com/products
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