The days when
the mobile phone was only used for voice calls are rapidly coming to an end in
Asia. With 3G starting this year in countries like China, India, Vietnam, and
Thailand-building on the high penetration rates already achieved, for example in
Malaysia-data services will become just as essential as voice for significant
segments of the mobile market; and are a major factor in their choice of
operator, tariff plans, and device. This is good news for mobile operators, but
it also creates some challenges.
While billing for traditional voice and text services on a
time and distance basis is well understood by customers, things get a little
more problematic when it comes to offering high bandwidth services oriented
around content. It's fast becoming clear that mobile operators need far more
flexibility and control when it comes to these type of services if they are to
make the most of them. Additionally, they also need tools to help them fulfill
and successfully manage the initiatives underway by the governments, such as
those in India and Australia to drastically cut roaming fees.
Today, especially for the mobile sector facing an
explosive demand for content, social networking, and entertainment services-it's
fast becoming clear that a much more intelligent, adaptive, and flexible
approach to the issue of balancing customers and resources is desperately
required. Without the ability to manage access to services, content, and
applications at ever-finer levels of detail, customers face the risk of
experiencing the mobile data equivalent of electricity 'brownouts', or the
unpleasant experience of suddenly receiving unexpectedly huge bills for content
downloads.
At the heart of the problem lies the increasing demand on
network and air-path capacity that are being made around the world by users of
many different types, as they take advantage of the new generation of data
centric devices and services now available. It's generally estimated that a
smartphone uses around thirty times the bandwidth of an ordinary handset, while
a laptop pushes this to a massive 450 times. In the longer term, it's expected
that mobile data traffic will roughly double each year through to 2012; while
the general industry sources also indicate that revenues from mobile data in the
US and China are growing at around 50% per year. According to another report,
it's expected that by 2014, around 47% of Asia's mobile devices will be Internet
capable. By contrast, revenues from voice services remain largely static,
pushing mobile data center stage in any mobile operator's plans for growth and
innovation.
While mobile operators can respond to this by increasing
the network capacity, this not only takes time and money-the latter currently
being in short supply-but also runs up against some inconvenient laws of physics
in terms of wireless spectrum capacity. Although, some Asian operator alliances
have introduced flat rate data roaming fees, if they impose blanket bandwidth
and download limits-or just offer 'best-effort' connectivity-they may run the
risk of alienating some of their potentially most profitable and high spending
customers with the 'brownout' scenarios as highlighted above. Alternatively, if
they try to throttle back the traffic through high tariffs and roaming charges,
they'll alienate customers even more. For customer communities already hit by
the global recession and watching every penny, such strategies will not win
operators any loyalty or encourage experimentation with new services.
Something must be done, but what?
The first thing is to realize that the crucial balancing
point for matching services, network availability and customer demand lies in
the policies applied to each customer's account. While policy control in its
broadest sense has always been an integral part of any mobile service, the tools
that have often been applied in the past have been far too heavy-handed for
operators to really turn them to either their own or their customer's true
advantage. Use of blunt generic pricing policies or caps on service access can
have a similar brutal effect on the customer's trust and their future spending
patterns.
What is really needed is an ability to apply a smart
policy approach to handle this increasingly complex and sensitive relationship
with the required levels of personalization. But what precisely do we mean by
'smart'?
There are essentially three components to applying such a
strategy:
Firstly, customers should be given access to self service
portals or automated alerts that allow them to send top-up or bandwidth boost
requests, change their service packages, get information on their usage and
calling patterns, and set individual limits on roaming or downloads. In
practice, this translates into a far higher degree of personalization for the
user, reduces customer support overheads, encourages experimentation and take-up
of additional services, and most importantly, prevents bill shock.
Secondly, there should be an increased control of the
reality of the customer experience that can be achieved through a far finer
granularity of detail. Both customer and operator can start to tailor policies
to support specific applications-video and music downloads, web browsing, email,
etc-while also taking into account the customer's own real-time behaviors and
preferences, as well as the wider network conditions at different times or in
different places.
Finally, a more flexible, real-time, and customer friendly
approach to the issue of setting bandwidth caps should be adopted, so as to
allow operators to act appropriately depending on whether they're facing heavy
or abusive users, or customers who inadvertently exceed a set limit by
downloading a movie. By optimizing and rationalizing the allocation of bandwidth
across customers, and prioritizing those prepared and able to pay for it; the
user gets a consistent, fair experience while the operator avoids the need for
expensive network upgrades to relieve network congestion.
In practice, a smart policy control strategy can add an
unprecedented richness and flexibility to each mobile operator's palette of
service and billing relationships, and keep the customer feeling that they're in
control of that relationship and the money that they are spending. The
complexity of the relationships between individuals and enterprises, and the
ever-lengthening content and applications value chain isn't going away, and can
only increase. Customers demand to be recognized as individuals. And only if we
have the systems and processes in place to support that individuality and
operators keep their loyalty, then only it will result in their revenues coming
in.
David Sharpley
The author is senior vice president, Bridgewater Systems
vadmail@cybermedia.co.in
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