Making money on user-defined services

Cynthia Leung/Ovum
10 Mar 2008

Solicy and charging are critical to SLA assurance and subscriber service management in next-generation networks. With services becoming more IP-based, subscriber-centric policy represents a potential source of new revenue for operators where consumers shape the nature of their services and operators tailor services and plans to customers' needs.

The first generation of IP-centric services were essentially delivered by best-effort, flat-rate connectivity, as if the telcos were a public road system. Today, mobile network operators are employing few (if any) 'policy decision functions' and (very often) competing on the lowest price only.

However, the meaning and function of policy management are broadened to include the service- and subscriber-based policy control, which can be integrated with a service delivery platform for supporting telco-Web 2.0 services. In converged networks, service-based policy is needed for making much more sophisticated, versatile service delivery decisions by governing the behavior of services, applications and service enablers. Such deployment scenarios are enabled by applying independent policy rules to track resource usage and setting of priorities across the various applications.

Subscriber policy encompasses an open-ended array of user-defined preferences. For seamless mobility, a business user may choose to be switched among cellular, Wi-Fi or low-power microcell networks to maintain the highest quality transmission at all times. However, a teenager might be happy to sacrifice quality to be on the least expensive network at all times. This kind of network access policies can result in greater loyalty and lower churn.

Loyalty through awards

Another example is usage-based or cost-based spending controls, which can protect users from incurring unexpected or excessive charges, especially when trying new services and features. Service providers can also use allowances to encourage limited usage as a reward system. Alternatively, it can enforce usage limits in customized subscriber profiles to reduce fraud.
Subsidized advertising represents an emerging type of personalization that can benefit both users and operators. Operators can deploy applications that support paid calling plans, advertising plans and combination plans that automatically select and deliver ads based on consumers' interests and delivery preferences.

Operators can also filter content based on user preferences, network policy and legal requirements, such as protecting minors from adult material, restricting business users from unrelated or inappropriate downloads, and classifying which account pays for what content-types. Together with charging control, digital content and formats can be processed and rated. This becomes a new business driver for creating innovative promotions, competitive discounts and flexible pricing plans to achieve higher ARPU and margins.

Standards groups are already working on open interfaces to ensure interoperability with each other. For example, an important evolution and recent advancement in IMS Release 7 architecture is to merge charging and session-based QoS local policy to create a separate 'policy and charging control' (PCC) function for any IP connectivity access network.

In this way, PCC provides a real-time function for the determination of policy rules and enforcement points applicable to IMS services like VoIP and non-IMS services like streaming services, and the ability to integrate with rating, balance management and subscriber information in B/OSS applications.

Currently, the feature sets in many traditional prepaid and post-paid billing systems are either hard-coded or narrowly-defined. Network operators require new capabilities of charging and policy logic to cater for the enormous range of usage limits, controls, white-lists, blacklists, content delivery rules and other personal policies.

Related content

No Comments Yet! Be the first to share what you think!