Consumer behavior of gsm users in telecom industry
Utilizing Policy Management To Support New Business Models June 10 2010
1. Utilizing Policy Management to Support New Business
Models
Patrick Kelly
Research Director
Analysys Mason
June 10, 2010
2. 2
Panel Members
Allan Jerrett, Director Product Management Network and Service Management IP Division
Alcatel-Lucent
Nigel Upton, General Manager of BSS products in HP‟s Communications, Media and
Entertainment group at HP
Parham Momtahan, Vice President, Advanced Technologies, Bridgewater Systems
Marc Price, Vice President of Technology – CTO for the Americas, Openet
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Confidential
3. 3
Agenda
Mobile media and consumer behavior trends
Network traffic growth and impact on mobile network
Policy management evolution
Use case studies
Points of view
Q&A
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Confidential
4. Mobile consumer survey: the mobile Internet and application usage Executive summary
4
We conducted a recent survey on the use of mobile media and the
services consumed based on a sample size of more than 4,000 users
Of the 4178 respondents to our survey, 1251 Figure 1: Usage of mobile media services1 [Source: Analysys
stated that they were „regular‟ users of mobile Mason, 2010]
media services: slightly less than 30% of all 4500
4000
Number of respondents
survey respondents. 3500
3000
At this level of penetration, it is clear that mobile 2500
media services, the mobile Internet and 2000
1500
application usage are mainstream activities. 1000
500
In particular, our survey included the responses 0
of between 184 and 640 users of specific mobile Total respondents Mobile media service users
media services, which provides insight into the
consumption patterns of those groups and Figure 2: Usage of mobile media services, by service type2
[Source: Analysys Mason, 2010]
demonstrates that a range of mobile media
700
Number of respondents
services are attractive to substantial market 600
segments. 500
400
300
200
100
0
TV Video clips Music Games Internet Application
(VoD) access stores
1 Question: “Which of the following services do you currently use on a regular basis
(at least once within the last three months)?”; all countries; all respondents; n = 4178.
2 Question: “Which of the following mobile media services have you used within the lastno
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year?”; all countries; all respondents; n = 1251. Confidential
5. Mobile consumer survey: the mobile Internet and application usage Executive summary
5
The main factors that influence usage of mobile media services are:
age and access to a touchscreen phone
Approaching 50% of survey respondents in the Figure 3: Usage of mobile media services, by age range1
18–24 age range indicate that they use mobile [Source: Analysys Mason, 2010]
media services regularly. 50%
Percentage of respondents
While survey respondents in the 55+ age group 40%
are significantly less likely to use mobile media 30%
services than their younger counterparts, it is
20%
worth noting that a substantial 20% of
respondents in this category say that they use 10%
mobile media services regularly. 0%
18–24 25–34 35–44 45–54 55+
Touchscreen phone users are approximately 2.5
times as likely to use mobile media services of all Figure 4: Usage of mobile media services, by phone type1
[Source: Analysys Mason, 2010]
types as non-touchscreen phone users.
60%
Perhaps unsurprisingly, a greater proportion of
Percentage of respondents
50%
respondents in younger age groups have access
to a touchscreen phone. 40%
30%
20%
10%
0%
Touchscreen Non-touchscreen
1 Question: “Which of the following services do you currently use on a regular basis
(at least once within the last three months)?”; all countries; all respondents; nNBED ref no
= 4178.
Confidential
6. Mobile media and entertainment in Western Europe Executive summary 6
MME service revenue will grow to EUR6.9 billion in 2013, but will still
account for only a small share of mobile revenue
Analysys Mason forecasts that mobile media and
Figure 1: MME revenue by service category and as a
entertainment (MME) service revenue will grow to
proportion of mobile service revenue in Western Europe,
2008–2013 [Source: Analysys Mason, 2009] EUR6.9 billion in 2013, up from EUR3.2 billion in
2008, and will register a CAGR of 16.4% during
7 5% the forecast period.
Revenue as a proportion of
mobile service revenue
6
Revenue (EUR billion)
4% However, MME services will continue to account
5 for a relatively small proportion of mobile service
4 3% revenue during the next five years, at 4.1% in
2013, up from from 2.2% in 2008.
3 2%
Embedded, downloadable and online
2
1% games, as well as entertainment applications
1 from application stores, will account for the
0 0% largest share of MME revenue in 2013, at
2008 2009 2010 2011 2012 2013 20.1%, when they will generate EUR1.4 billion.
Paid information Personalisation Personalisation services‟ dramatic loss of
revenue share to other services – from 43.3% in
Games TV
2008 to 19.1% in 2013 – can be attributed to the
VoD Music maturity of the personalisation services
Gambling Adult content market, the declining demand for ringtones and
Social networking MME revenue as a proportion wallpapers, and downward pressure on pricing.
of mobile service revenue
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Confidential
7. 7
4G will increasingly gain in importance from 2015
Given the massive importance of data in driving
traffic growth there is little wonder that 3G and 4G
Global Wireless Traffic by Generation networks will account for the lion‟s share of traffic
growth from 2009 to 2016.
35,000 100%
From 44% of traffic in 2009, 3G and 4G networks
90% will increase their share of total wireless traffic to
30,000
80% 96% by 2016.
Petabytes per annum
25,000 70%
Share of traffic
4G devices in particular will gain massive
60% prominence due to their usage by high data
20,000
50% users. By 2016 their share of total traffic will grow
15,000 40% to 42%.
10,000 30% As a result of the growing importance of
20% 4G, traffic carried on 3G networks will peak in
5,000
10% 2012 at 68% of total traffic before declining to
0 0% 54%.
09
10
11
12
13
14
15
16
20
20
20
20
20
20
20
20
2G 3G 4G
% 3G % 3G+ % 4G
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Confidential
8. 8
But the data era requires control of network resources
MNOs must adjust their tariff plans and provide
tiered network services to offer premium services
Comparison of the network economics of legacy and LTE
networks [Source: Analysys Mason, 2010] Speed and coverage is now table steaks for
MNOs in developed economies
Real-time convergent services for policy and
charging will be necessary to compete in the
Network cost marketplace
(existing network)
Traffic volume
MNOs must find effective ways to reduce their
costs if they are to profitably carry the increasing
Loss volumes of data traffic.
Revenue
Profit Operators that do not implement a policy solution
will become wholesale suppliers or go out of
Cost of new network
business through mergers or acquisitions.
(e.g. shared network)
Time
Dominated by voice Dominated by data
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Confidential
9. 9
Policy is widely deployed today to implement a traffic
management strategy
DPI Element
Mgr
DPI DPI
Appliance Appliance
GGSN GGSN
Internet
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Confidential
10. 10
A policy framework consist of the following components
Policy and Charging Rules Function (PCRF) or Policy Server that stores the individual
policies, defining network, application, and subscriber rules that must be met to deliver a
predetermined quality of service.
The Policy and Charging Enforcement Function (PCEF) is responsible for enforcing policies
with respect to authentication of subscribers, authorization to access and services, and
accounting mobility. Current deployments today make use of deep packet inspection
technology.
Subscriber profile repository (SPR) – this provides information to the policy control and
charging systems and is a logical entity that includes information such as entitlements, rate
plans and usage caps. This may be a standalone database or integrated into an existing
subscriber database such as a home subscriber server (HSS).
Although charging it closely aligned with a policy management architecture, it is outside the scope of
discussion in evaluating policy management solutions. The Charging Function includes Online Charging
(OCS) and Offline Charging (OFCS). The OCS provides real-time credit control and quota management for
subscriber data sessions. The OFCS collects call data records from network elements after the subscriber
incurs network resource usage.
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Confidential
11. 11
Using data from the network and knowledge of the subscriber the
policy server enables MNOs to bring new services to market and
control service delivery
Subscriber HLR Market and sell services based
Data HSS on tiers of service
Apply QoS or bandwidth
controls per subscriber or
IMS control plane application
CSCF
Optimize application usage by
Policy Server time of day and grant users
Mobile broadband discounts in off – peak periods
SGSN core network
GGSN
Monitor applications and
admit/deny sessions to avoid
wide scale service disruption
Alert post paid subscribers
when data traffic exceeds
Mobile broadband
service plan (regulatory)
RNC
radio access network
RBS
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Confidential