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The LTE balancing act – value or price?

By May 3, 2013 No Comments

The dream of high-speed mobile data is reality. LTE is being rolled out across the world. Now the focus must turn to managing the opportunities that the speed of true mobile broadband brings. And we must do it urgently if we are to avoid the same reactive pricing and management that we did with fixed broadband. The age of value must emerge. The trouble is that amongst the promises and marketing ideas that seem to be everywhere there is a feeling that it is not quite that easy. Not only do we understand the enormous pressures that CTOs and CIOs are under – they are still too busy fighting fires to buy a new fire engine – there are other issues.

In a recent survey, referenced in Openet’s whitepaper, ‘Building the Foundation for LTE Revenue’ they found that billing systems, far from being the Marketing Supporting Systems they should be are actually standing in the way of progress. Fully 80 percent of operators surveyed by Telecoms.com on behalf of Openet said that existing systems were the main reason for delaying new service launches. Changes are expensive and time consuming; integration with other systems takes too long; new business models are not easily supported and new price plans are too complicated for the system. These were all quoted as problems for that 80 percent.

Against this background of challenges and the perception that upgrading or retiring IN platforms is a costly item, a couple of things should be borne in mind. The ability to act, react and analyse in real time is a significant revenue generating opportunity. The flip side of this is that if operators do not implement real time capabilities, and the inherent responsiveness, the only real competitive tool they will have is price. And the one thing that will ultimately make communications (and CSPs) a commodity market is a price war. Capturing the revenue opportunities presented by LTE is not an option, it is now a priority.

In the whitepaper, Openet discusses use cases for high-speed data and describes an architecture for ‘revenue generating infrastructure’ that will deliver those revenue making opportunities. To deliver dynamic services, such as roaming data passes, quality of service based offerings, shared data plans, Voice over LTE charging and control and application specific pricing, a real time platform is clearly a necessity. And to take full advantage, it is not just real time charging that needs to be implemented. Real time charging is, however, the foundation of this revenue generating infrastructure (the Five Pillars in the whitepaper) but it must be tied in to other elements. Linking real time charging to real time policy control is critical in order to fully understand – and therefore predict and cater for – the needs of customers. Further, real time or online mediation enables an even more compelling set of services to be offered to customers. By knowing where they are and what they are doing allows outbound marketing systems to react instantly and offer relevant, useful services. For instance, if a customer switches data off while roaming, an SMS can be sent offering a roaming data pass for, say, €3. Finally, giving control to customers in real time on their devices provides opportunities for truly personalized services, essentially providing them with a remote control device. Whilst the last step may be a little way off, the first steps should be taken now.

To succeed, convergence and interoperability should be priorities. Without a holistic view of customers across all systems, it is not possible to provide completely relevant and context sensitive services. Indeed, a gap in the profile or information of customers might lead to the reverse happening.

The debate about how best to implement real time charging is on-going. What is not debatable for those operators who want to provide compelling, relevant services for customers and want to build profitable partnerships with Over the Top players is that real time infrastructure needs to be a priority. Otherwise we will see a price war and not the emergence of true value based – profitable –next generation communications services.

A Guest Post by Alex Leslie of www.billingviews.com To learn more, please download our White Paper titled Building the Foundation for LTE Revenue.