TechZine – Alcatel-Lucent

Business

End-to-end LTE Opens Doors to New Business Models

Highlights

  • End-to-end LTE network capabilities drive profitable new business models
  • Proof-of-concept applications and services demonstrate end-to-end LTE possibilities
  • New partnerships and pricing plans are crucial for successful evolution

E2E LTE differentiates

As mobile operators evolve to end-to-end (E2E) LTE networks, a world of new business opportunities is unfolding before them. These opportunities bring mobile operators new customers and new ways to ensure healthy returns on E2E LTE network investments.

Two crucial E2E LTE network capabilities drive business opportunities:

  • Big bandwidth: E2E LTE networks are all-IP networks. And they feature the latest technology, both in terms of the wireless network elements (the radio part of the equation) and the supporting wireline network infrastructure. As a result, E2E LTE networks can deliver 3 to 4 times the bandwidth of a 3G network.
  • Low latency: We’ve all experienced latency – or delay – when accessing content on mobile devices. It’s not a good experience, and it’s particularly bad for real-time services such as multi-player video gaming and even voice. E2E LTE networks dramatically reduce latency; compared to 3G networks it’s almost non-existent.

With big bandwidth and low latency, mobile operators can offer applications and services that just aren’t practical on a 3G network infrastructure. Think about video. E2E LTE networks let mobile operators deliver high definition (HD) video, HD video teleconferencing, and a host of other video-based offerings with very high quality of experience (QoE). They also bring the mobile Internet experience up to par with the wireline Internet experience.

E2E LTE network capabilities are arriving as customer demands are increasing and changing. The numbers tell us we can expect 18 times more smartphones and 30 times more wireless traffic by 2015. [1] We’ve already seen consumers aggressively pursue what they want – switching operators without hesitation to get the latest and greatest mobile devices, applications and services.

3 interesting opportunities

The combination of E2E LTE network capabilities, changing customer demands, and profit pressures make it the ideal time for mobile operators to explore new business models. Three opportunities stand out:

  • Mobile video services
  • Commercial services
  • Real-time emergency services

Mobile video services: Adding value

Mobile video services help mobile operators attract new customers with advanced capabilities. Here are just a few examples that highlight why customers will pay for more advanced mobile video services:

  • Accelerating businesses: With video capabilities at remote locations, repair personnel can easily access multimedia instructions that accelerate their efforts. They can also establish HD teleconferencing sessions with experts to diagnose difficult problems and review solutions.
  • Connecting people: With real-time mobile video capabilities, people can share experiences – sports events, music recitals, birthday parties – as they happen.
  • Entertaining people: With the ability to quickly download multimedia content to mobile devices, LTE-enabled cars and trains, people can enjoy rich content everywhere.
  • Moving with people: With multiscreen services, video content follows people as they move and switch devices – from their home TV to their tablet, even to their LTE-enabled car.
  • Storing content: With a network “video vault,” people can store their content in the operators’ cloud and access it anytime, anywhere.

Commercial services: Delivering the future

Commercial services, such as interactive digital signs and virtual personal stylists, create new opportunities for mobile operators to collaborate and stake a claim in emerging market segments.

The potential for interactive digital signs is virtually unlimited. From personalized shopping services and interactive ads to government services and tourist information, digital signs help people connect with the world around them. In developing markets, LTE-enabled digital signs give people access to financial, health care and educational services and information – often for the first time.

E2E LTE offers the potential to fundamentally transform the retail experience, with capabilities like the Virtual Personal Stylist solution that was demonstrated at the 2011 Consumer Electronics Show. Most of us want to see what an outfit looks like on without actually trying it on – especially when shopping online. A personal avatar and an online profile let shoppers visualize a look and receive recommendations from style experts. Everyone in the value chain benefits:

  • Customer satisfaction increases
  • Merchandise returns decrease
  • Advertising effectiveness increases
  • Mobile operator revenue increases

 

Real-time emergency services: Providing a critical lifeline

Real-time emergency services put mobile operators at the heart of mission-critical communications. It’s an important position for mobile operators and even more important for society.

Right now, there’s a digital divide between in-office public safety personnel with fixed-line communications and front-line personnel with mobile communications. E2E LTE networks fill that gap and provide a powerful complement to land-mobile radio networks.

With E2E LTE, front-line public safety personnel can instantly access streaming video, photos, maps, blueprints and databases – anytime, anywhere, across jurisdictions and networks. This critical communications lifeline helps to accelerate emergency response times, enhance information sharing and improve the efficiency of day-to-day operations.

Seeing, evolving, profiting

To take full advantage of new business models, mobile operators must build relationships with content providers, application developers, device manufacturers and other players.

Seeing E2E LTE technology in action is often the best way for mobile operators to realize the “art of the possible.” Proof-of-concept applications and services show mobile operators how working with a variety of players from different industries leads to innovative and compelling offerings that redefine the wireless experience.

More granular pricing plans help operators profit from new business models. Mobile operators are evolving from “all you can eat” plans to fixed-price plans where every gigabyte beyond the plan limit comes with an additional charge. This is helping improve revenue and margins, but it’s only an interim step. The next step is a per-click pricing model. With this approach, customers can download or access any content they want, whenever and however they want it, and be charged for their precise usage.

Mobile operators are also exploring different ways to monetize the intelligence in their High Leverage Networks™ (HLNs). This includes securely exposing high-value network capabilities to trusted application developers. Mobile operators can then charge application developers when they incorporate these high-value network capabilities – for example, location, subscriber services and billing – in their apps. By helping application developers create more compelling offerings and access more potential customers, mobile operators can improve their position in the application and content value chain.

Seize the 1st mover advantage

We’re seeing 4G LTE activity underway in the United States with Verizon and AT&T. In India, where 4G LTE spectrum was released in 2010, mobile operators are striving to be first with 4G LTE services. In China, China Mobile and others are beginning pre-commercial network deployments. And in the Middle East, Etisalat is deploying the region’s first commercial 4G LTE network.

Mobile operators around the world are recognizing there’s a significant 1st mover advantage for those who are quick to offer advanced services on E2E LTE networks. They are better positioned to keep existing customers and attract new ones. And they can offer advanced services in new ways to increase average revenue per user (ARPU) and accelerate returns on E2E LTE network investments.

To contact the author or request additional information, please send email to techzine.editor@alcatel-lucent.com.

Footnotes

  1. [1] Source: Alcatel-Lucent Bell Labs