With the UK’s 4G auction a distant memory, it is clear the early 4G land grab is set to take place in the corporate market; and the emphasis on quality of service, network availability and corporate specific data mining will become a critical component in service differentiation.
The UK is now tasked with making 4G a success and first mover advantage will be essential. The Telco that can swiftly gain insight into both network performance and customer behaviour can achieve rapid market differentiation that will enable essential revenue generation.
4G changes the game for Telcos. In addition to providing rapid access to content, it allows far more elaborate content, such as mobile video, to be delivered. It provides operators with the chance to compete on quality of service for the first time, offering new differentiation opportunities with corporate clients; and it opens the door to a raft of new tariffing options for consumers and corporates – evolving from all you can eat data plans to all you can eat per app, similar to pay TV.
The challenges are also immense. With each Telco investing an estimated £5 billion in the 4G network, including spectrum purchases, network upgrades, market and LTE handset subsidies, generating revenues fast – and preferably faster than the near decade it took to generate robust 3G revenues – is essential.
And in a market that will, in the early days at least, be dominated by corporate customers, that means ensuring quality of service. It means understanding network performance and network usage. And it means building a robust network monitoring solution can seamlessly and consistently manage voice, 3G and 4G services.
4G also provides deeper access to extraordinary insight into network usage and customer behaviour. In an era where global mobile traffic is already 13% of all Internet traffic according to KPCB and mobile Internet exceeded desktop Internet traffic in 2012 in India, 4G network usage and adoption will evolve at a rapid rate. Indeed, just 25% of the 5 billion mobile phones in use globally today are smart phones. The explosion in potential demand is huge and by 2015 an estimated 80% of data will be uncertain – from wikis and blogs to video.
At the same time, 4G itself will deliver new data, with intelligent devices – from handsets to network components – providing rich metadata about the way the network is being used. To deliver a consistent and relevant quality of service, network operators need to rapidly create a strategy for capturing and exploiting this insight. Indeed, repackaging this information for Mobile Virtual Network Operators is set to become another key component of 4G revenue streams.
With existing 3G network monitoring creaking under the strain, the step up to 4G is not insignificant. Telcos need to extract data from network traffic to improve insight into network health, ensure quality and security of the service. They also need to consider the longer term value of this data to provide new advertising and marketing opportunities as well as options to evolve beyond flat rate data plans into more complex tariffs that reflect evolving usage trends.
The new network management solution requirements are, therefore, extremely complex. The issue is not simply tracking network performance but creating self-organising networks. By enabling intelligent policy decision making within the network, exploiting both improved insight and automation to prioritise delay-sensitive apps, such as video, network operators will be able to ensure the delivery of a high-quality service to premium subscribers.
The new solution must have the ability to handle multiple technologies – voice, 3G, 4G, and broadband. It has to cater for multiple devices – smartphone, tablets, smart devices; and multiple data types – voice, text, and video; and allow the the more complex deployments that can be enabled by 4G. And it must track the way users move seamlessly between networks to ensure quality of service.
Critically, by creating an end to end approach to centralised network policy control, operators can gain the fourfold cost benefits, as demonstrated by Ericsson in its 2011 study.
This new investment has to be made immediately. Given the huge expense associated with acquiring 4G spectrum, network monitoring has to be funded differently because Telcos cannot afford to miss out on chances to enhance services, due to lack of capital investment.
With new technology reducing deployment times and the barriers to entry coming down, a new OPEX approach will become essential. By paying for the infrastructure and software systems, providing this management service on a rental basis, operators will have far more flexibility to respond to both market forces and new demands on the network.
Furthermore, the technology deployment must be as flexible as the financing. Whilst first mover advantage cannot be underestimated, network operators cannot afford to repeat the mistakes of past network monitoring solutions that have constrained innovation and resulted in minimal use of network data to improve service provision. A fully integrated solution that combines infrastructure, software and hardware, preferably in a plug and play form, will enable organisations to rapidly exploit technology innovation without undertaking prolonged component procurement or integration.
No room for mistakes
Despite the huge budgets that are being allocated to 4G, network operators are struggling to prioritise spend and predict income streams. While some revenue will be generated by providing 4G networks in rural communities to fill the gap in fixed line broadband provision, the main emphasis must be on creating 4G services that deliver quantifiable value to corporate customers.
In this market, there is no leeway for mistakes; no justification for recreating the complicated, poorly integrated monitoring solutions that have failed to scale in 3G; and no way of creating a competitive offering without exploiting the new data resources available. With the incredible complexity in network topology that will be created by the addition of 4G networks, operators require not only a totally integrated solution but one that enables component parts to be swapped in and out to exploit innovation in data capture, mining and analytics.
It is only by adopting a complete solution, based on a managed model, that operators can gain the insight into network performance and customer behaviour required to drive new revenues and, critically, create a flexible business model that can evolve rapidly in response to the new data landscape.