Telecom Asia today quoted Gulzar Azad, Mobile Partnerships Lead – India and APAC at Google during this week’s LTE Asia event in Singapore (where Tekelec has made partnership and customer-win announcements).

Azad stressed that mobile operators need to think in terms of service delivery, not data plans, meaning they have to go beyond monthly subscription fees and add value to the types of services OTT players, content providers and others are currently driving.

He suggested operators expand their thinking on limiting their networks so they can better capitalize on the likes of Facebook, Google Plus and others by using them as platforms on top of which they can build multiple channels for not only local or regional audiences, but also global ones. By aggregating, augmenting and adding their own content, mobile operators can do more to create and monetize services tied to their own brands.

All mobile operators pushing for success will have to start thinking of themselves as “digital lifestyle providers,” and with that comes a need to work harmoniously with OTT, M2M, cloud, mobile advertising and mobile payment services.

Making It Happen
Mobile operators moving toward this type of business model will be required to work with third parties (whether social networks, OTT or mobile advertisers). That means orchestration, and lots of it, will be needed to expose policies, subscriber data, charging data, and analytics – all critical to LTE services.
Additionally, it will require operators scale for the millions of new devices populating LTE networks, and accommodate the multi-session nature of new devices.

These challenges all point to a need for a new Diameter network (NDN), as Diameter is the protocol that facilitates policy and charging rules for new business models and the protocol that ensures secure interconnection among partners and privacy for subscriber information.

As revealed last week in the Tekelec LTE Diameter Signaling Index®, global signaling traffic will grow more than three times faster than mobile data traffic over the 2011-2016 period, reaching nearly 47 million Diameter messages per second (MPS) by 2016 (a 252% CAGR over the forecast period).

Roaming, concurrent data sessions, video streaming, QoS guarantees and behavioral changes via social networking over mobile devices will all account for these tremendous surges in Diameter signaling traffic and will mean DSRs and other elements of an NDN will grow in importance.

Ever wonder what Lily Tomlin was doing when she would say “one ringy dinghy, two ringy dinghy”? Or how about Sarah in Mayberry RFD when Andy would pick up the phone, turn the crank a few times, and ask her to connect him to Aunt Bea? These are all examples of signaling being used to connect calls in the days before electronic switching. When you wanted to make a call, you turned a crank on the side of the phone, which then triggered “signaling” in the form of a light illuminating and a bell ringing on a switchboard.

The operator would then ask a series of questions so she knew how to connect your call (signaling again), after which she would manually plug a cord into a jack on the switchboard, completing the circuit to the destination, or to another operator in another city.

Signaling has changed drastically through the years, with everything involved now fully automated. Signaling allows the various elements within a network to communicate with each other regarding a specific connection. But nowadays, signaling takes many forms, depending on its purpose. There is signaling between a mobile device and the cell tower. There is signaling between the cell tower and the core network. And there is signaling within the core of the network. Regardless of its purpose, signaling up to now has been nothing more than pure overhead, contributing little to service provider revenue.

Though signaling has taken many forms over the years, the industry is now making a concerted effort to consolidate technologies and reduce the number of signaling methods used in networks to just two: Session Initiation Protocol (SIP) for connecting voice and video, and Diameter protocol for authorizing and authenticating subscribers and their devices.

Not only is Diameter used to access subscriber databases authorizing network access, but it also is used for charging as well. Most importantly, Diameter is used by network elements to communicate with the Policy and Charging Rules Function (PCRF).

It is the PCRF in the Evolved Packet Core (EPC) that allows service providers to personalize services they deliver to their subscribers, whether tiered service plans, parental controls or others. The role of policy in the network continues to grow as service providers get more and more creative with the rules they can generate to control the traffic in their networks and define new services.

The PCRF not only contributes to the bottom line on the balance sheet, but it generates new revenue streams for service providers such as mobile advertising and over-the-top (OTT) application subsidies.

Never before has one function in the network represented so many new opportunities for service providers, which are literally redefining the role that they play in the mobile ecosystem. They can now offer to their subscribers more intelligent choices tailored to their lifestyles, while also engaging new partners previously seen as competitors for the purpose of creating more compelling services.

OTT players such as Google, Facebook, and YouTube depend heavily on the network to reach their subscribers, but until now have contributed little to nothing back to the service providers as compensation for the network costs. But that can change as OTT players come to realize the value of becoming partners. As that happens, signaling will continue to move to the spotlight as a revenue generator rather than a pure cost of doing business.

As that happens, Diameter will be the signaling protocol that makes monetization of OTT services possible, and it might possibly be the one technology that will change the face of service provider business models forever.

It’s no secret that OTT players have successfully decoupled applications and services from the underlying networks responsible for driving the all-important “customer experience.” As a result, service providers should consider how OTT players like YouTube, Facebook, Amazon and Google can become a critical link back to what has become the disintermediated “traditional” customer” – the end consumer of communications and data services.

For example, in the “Verizon versus AT&T: Whose iPhone is better?” debate, end users care about the quality of experience enabled by the device and the apps available on the device. Their loyalties will sway according to which network optimizes their devices’ performance.

Since the telco brand is not directly tied to the devices and apps, but rather indirectly, it is important to cultivate that “indirect” link and open it to monetization by nurturing the OTT relationship. After all, service providers have the technological and business know-how to enrich OTT apps and services with differentiating capabilities (like speed boosts during gaming or video downloads).

Service providers have an opportunity to monetize the service level agreement (SLA)- and quality of service (QoS)-driven capabilities OTT players would otherwise struggle to create on their own.

There exists a universe of untapped services for both consumers and enterprises if operators consider OTT players their new “customers” as opposed to their competitors.

To read more about nurturing the OTT players as a revenue-rich customer base, go to the Tekelec white paper “New Diameter Network: Over-the-Top, Clouds and Machines.“

Tekelec is a Bronze sponsor and speaker at this year’s LTE Latin America conference, held April 17-18 at the Windsor Barra Hotel, Rio de Janeiro, Brazil.

Tekelec will participate in two sessions:

• “Managing Data Traffic and Monetizing the LTE Network: The Importance of Diameter Signaling and Policy Control”
  • Houck Reed, vice president, product management and operations, will discuss the New Diameter Network, the foundation for a successful mobile data business on April 17th at 4:55 p.m. The New Diameter Network is comprised of control elements – policy servers, charging systems, subscriber databases, gateways, and session and mobility management equipment – that rely on the Diameter protocol to exchange network, subscriber, policy, and charging information.
• “OTT and Operators Partnership and Cooperation Potential for the Latin American Market”
  • Travis Russell, technologist, strategic marketing, will speak on a panel about how over-the-top providers such as Facebook and Netflix and mobile operators can collaborate for future mobile data revenue opportunities. His panel takes place April 17 at 2:40 p.m.

Operators are facing the classic challenge of shifting from being a network and device provider to being a service and content enabler. This includes being able to leverage the rich network and subscriber data and analytics they have to personalize services while respecting privacy through opt-in provisions. Also, this means offering customer-centric service rather than device-centric.

However, this challenge can present some key revenue generating opportunities for operators. Here are examples of how operators can monetize their networks and get subscribers on their side.

1)     Offer personalized services tiers that link usage and preferences to pricing

This approach is becoming critical in helping operators better align mobile data traffic growth with revenue growth. It requires policy to define usage rules and subscriber data management to segment subscribers and track usage and behaviors on a subscriber basis, as well as analytics to determine how services are performing and to use that information to evolve services.

Service tiers can be based on bandwidth, application usage, speed, time or device type, and they can be customized for different market and subscriber segments such as business users or students. Providing customers with notifications and messages about their usage and how it relates to what they are being charged will be critical to ensuring customer loyalty and preventing bill shock. 

2)     Personalize the Over-The-Top Experience

Operators need to add value to over-the-top applications by personalizing them with subscriber profile, usage, location, and analytics information. An example of this is enriching mobile advertising by targeting certain subscribers who opt in based on their location. The operator could charge the mobile advertiser for the location data they are providing and for analytics on the effectiveness of the advertisement.

For operators to realize the value in over-the-top applications, they need:

• A real-time view of the customer such as their location, applications and devices;
• The ability to offer quality of service guarantees;
• Analytics to enhance applications by measuring customer usage, performance, and application trends; and
• Open application interfaces that expose information to advertisers and application providers such as video quality of service, customer data and analytics

3)     Simplify Data Plans

Consumers with multiple devices are plagued with the headache of juggling multiple bills. By offering one plan that can encompass many devices, service providers can encourage greater uptake of devices including smartphones and tablets, as well as machines such as home energy management systems. This approach combines subscriber and device data management to assign multiple device identities to one customer profile. It also uses policy to share one quota across multiple devices and performance analytics to track and analyze customer and group usage.

4)     Capitalize on Casual Usage and Loyalty Programs

Casual usage and loyalty programs such as roaming or application day passes, birthday and service anniversary bonuses are another opportunity for revenue. These casual usage and loyalty programs require policy combined with subscriber data management to meter multiple usage limits per customer and to zero-rate services that are free based on application, time, and bandwidth. Performance analytics are also used to track usage, assess the impact of different programs, and evolve services.

For additional information, listen to our recent Webinar: Four Use Cases for Monetizing Mobile Broadband.