Policy management is designed to both overcome the challenges on the network side and reconstitute offerings on the service side. Customizable policy management solutions allow for the implementation of real-time rules that service providers can set, enabling subscribers to consume predefined services based on their profiles. Operators can also define bandwidth allocation for particular services, giving operators the tools to differentiate their services, be more creative and protect their own interests by distributing and controlling scarce network resources more effectively.
At the same time, operators can focus on greater targeting of service tiers to drive new revenue. Capitalizing on the enhanced intelligence and control that policy management and deep-packet inspection afford, operators can personalize service tiers and revenue models to speak to particular customer needs and, in doing so, closely align services with revenue.
Yankee Group sees two major developments as the foremost drivers in pushing mobile operators toward policy management solutions.
- The proliferation of smartphones will increase subscribers' appetite for bandwidth-intensive services. Smartphones vastly improve the web surfing experience and increase consumption of media and content-based services. Without effective policy controls, smartphones will overtax the network and as a result, users will endure a poor network experience.
- The speed and capacity of 3G networks will enable adoption of media- and content-based services. In our survey of network operators, respondents across the board pointed out their focus on the plethora of new consumer services made possible due to the greater speed and capacity of 3G networks. Wireless operators strongly believe that consumer-directed multimedia services, data access packages, contactless payments and multiuser gaming services will prove to be keys in maximizing the revenue opportunity among mobile subscribers.
If a flat-rate model is truly unsustainable, then what model should take its place? Intelligent bandwidth caps may provide an answer. By intelligent bandwidth caps, we mean allocations that can be set by the subscriber or the operator, are customizable in real time and can be adjusted based on factors such as the parameters of the application in use, roaming conditions and network congestion levels. This type of bandwidth cap solution can achieve the cost and bandwidth savings that operators sorely need, while avoiding subscriber backlash by constructing bandwidth allocations in a manner that is conducive to creating the highest possible customer experience.
Based on a global survey conducted by Yankee Group last July, the table to the left reinforces the fact that operators indeed have the customer experience at top of mind when assessing bandwidth cap implementations.
Intelligent bandwidth caps can also be instrumental in preventing subscribers from accruing unexpectedly inflated bills. This concept has gained steam lately because it is closely tied with the notion of heightened customer satisfaction: bill shock can result in customer service complaints, customers turning off advanced services to curtail data usage, and ultimately, increased churn. Despite demand in theory, however, our survey results indicate operators are still unclear about the required components for an anti-bill-shock solution. This presents an opportunity for policy management and billing vendors to undertake targeted market education to inform operators about the best tools to prevent this problem. Yankee Group thinks that real-time usage visibility and notifications are logical places to start.
Ari Banerjee is VP of next-generation software systems at Yankee Group