The growing demand for personalized broadband services is revolutionizing the mobile market. Mobile operators can monetize their networks and spur multimarket growth with dynamic policy control systems that combine flexibility, ease of use, and scalability.
Today’s challenges: Augment revenue, reduce churn
Mobile operators welcome the rising interest in mobile broadband services. The increasing demand for bandwidth, signaling resources and airtime boosts their revenues. Unfortunately, the high cost of serving up data limits profitability. Operators can’t afford to continue on a ‘business as usual’ path. They need to find new ways to monetize networks and kick-start new revenue growth.
Today’s mobile operators face 2 fundamental business challenges:
- Profitability: Data revenues are growing but voice and text revenues are tailing off. The current services revenue growth curve is getting flatter, pointing to potential long-term profitability issues. Mobile operators want to reverse this trend so they can build a foundation for growth.
- Managing customer churn: In some markets, up to 25% of mobile broadband customers switch operators every year.[1] Mobile operators are trying to move forward. But first, they must figure out how to keep customers on board.
Over-the-top application and content providers (ACPs) complicate these issues. Their offerings capture consumer mind- and wallet-share and fuel market growth. Operators have to keep pace and avoid relegation to dumb-pipe status. It’s time for operators to reinvent themselves with a renewed focus on personalized broadband experiences driven by mobile customer demand.
A fresh look at policy management
Operators can move forward by blurring the lines between prepaid and postpaid models. One key step is to unify subscribers around a real-time model that focuses on superior personalization, performance and is contextual. Another is to adopt a simple and flexible approach to charging, billing and interacting with customers. All of this can be achieved through a new approach to policy management.
Traditional policy management strategies focus on operational goals such as enhancing resource use or network performance. The shift toward personalized broadband services calls for an integrated approach that tightly blends policy management, charging requirements with real-time flexibility, scalability and performance to support service velocity.
This emerging approach integrates policy management with charging to provide personalized service options with the required operational performance.
Creating personalized service options
Operators can address personalized service options by meeting customer needs. Customer experiences are shaped by having specific content and services tailored to their specific tastes and requirements and delivered with the associated required performance. Each service experience — Web surfing, social networking, and video streaming may require its own specific level of performance. If subscribers don’t get the performance they expect, they’ll turn to competing offers.
Addressing operational performance
Increasingly, operator performance is measured in transactions per second. Mobile broadband demands more from policy engines and charging systems. As transaction rates grow — on the average 10% compounded monthly, according to Stratecast | Frost & Sullivan[2] — operators find it tougher to deliver on operational objectives.
Mobile operators have to deliver on both personalized service options and operational performance to remain competitive. To grow revenues, they need business-driven policies that address the new experiences customers want. To handle fast-rising transaction volumes, they need scalable and modular policy platforms that support pain-free expansion.
The flexibility advantage
There’s no such thing as a one-size-fits-all policy management solution. Each mobile operator has specific operational and competitive challenges. Despite their differences, all mobile operators can benefit from solutions that give them the flexibility to create policies that fit their unique business needs.
Flexible policy solutions can also improve customer relationships. Operators are under increasing pressure to address the needs of different types of subscribers. Policy solutions can ease this pressure by allowing operators to fine tune policies and business models for specific applications, devices and subscribers. Ideally, these solutions will allow operators to create and implement policies that don’t require additional integration with billing and charging systems. It’s really about policy enabling new business models that will be different for each operator and having the flexibility to modify and expand them quickly and easily.
Ease of Use
In this new mobile broadband era, reacting to new service opportunities quickly and efficiently is essential. There’s no time to wait for software upgrades or input from consultants. Operators need the freedom to tailor their policies to what’s happening now.
As operators shift their focus to revenue and churn, their sales and marketing teams will seek a more active role in defining policies. By making it easy for sales and marketing teams to define service policies, operators can cut costs and increase their business velocity.
Scalability
Mobile operators need policy platforms and solutions that can scale in step with their ambitions. Any move toward a transactional model demands a similar move toward a transactional control infrastructure. With solutions that can readily scale to support more transactions, more wireless infrastructures and more access technologies, operators can deliver the next-generation experiences their customers and partners demand.
Transaction-based models drive business growth
As operators extend their focus beyond basic operational performance, traditional service tiers are evolving to include speed parameters, lifestyle add-ons, as well as other service options that can be made available to subscribers. As such, operators need to develop transaction-based models that can monetize their network capabilities and drive business growth in a dynamic and personal way. For example:
- Contextual offers help operator’s upsell or cross-sell based on real-time customer behavior. When a customer downloads a movie on a tablet, an operator could automatically offer an HD streaming package or a trial with an ACP partner. With contextual offers, operators gain access to virtually limitless opportunities for partnership and monetization.
- Yield management use cases help operators promote ideal customer behavior and optimize network resources. With the right policy driven service offerings, an operator can increase profitability and revenue while building customer loyalty.
- Self-care applications help operators keep customers informed without increasing support costs. For example, on-device dashboards can use a dynamic rating, charging and policy system to provide customers with real-time service usage details. Customers can use these dashboards to inform and manage their usage patterns to match their mobile lifestyles.
Each of these examples calls for policies that can optimize yield while offering choice and value to customers. These policies modulate demand with economic incentives and capacity constraints. And they influence behavior by giving customers the choice to match their usage to their lifestyle. The end reward is increased value for the customer and the mobile operator.
To contact the authors or request additional information, please send an email to techzine.editor@alcatel-lucent.com.