integrated policy & charging

White Paper

Integrated Policy & Charging:

The Road to Data Monetization

Prepared by

Graham Finnie

Chief Analyst, Heavy Reading

www.heavyreading.com

on behalf of

www.comverse.com

August 2014

http://www.heavyreading.com/

http://www.comverse.com/

HEAVY READING | AUGUST 2014 | WHITE PAPER | INTEGRATED POLICY & CHARGING: THE ROAD TO DATA MONETIZATION 2

Executive Summary Policy management is at a crossroads. After an initial buildout driven by traffic man-

agement use cases such as quota management and congestion control, our most

recent surveys of network operators show that most have shifted their attention to

a new kind of policy deployment in which the main objective is to facilitate service

differentiation, to help operators monetize data services more effectively.

But shifting the focus of policy management to service differentiation raises many

new questions. Not least, since a key objective here is the monetization of data

services, it will most likely require integration of policy servers with charging systems.

And as many network operators have found, that is no simple matter.

The paper is divided into four sections:

In Section 1, we look briefly at the key business drivers for the integration of policy

and charging, including the drive to data monetization and a wider range of ser-

vice plans and options. Impelled to find new sources of revenue and to reduce

churn (as well as increase market share), network operators are inevitably moving

toward a more personalized, granular set of services and service options for sub-

scribers, and this is causing the business value of policy control to radically change,

with consequences for the whole policy architecture.

Section 2 shows that putting in place the architecture required to support this new

policy environment has been fraught with problems, not least in the integration of

policy and charging. Heavy Reading surveys have consistently shown that the inte-

gration of policy servers with charging systems and other back-office functions has

been among the most difficult obstacles to progress.

In the light of these issues, Section 3 examines the technical options available to

operators when connecting policy systems and charging or billing systems. It looks

at what exactly is needed to achieve key objectives, and evaluates the various

potential solutions.

In particular, we consider the 3rd Generation Partnership Project's (3GPP) new Sy

interface linking the Policy & Charging Rules Function (PCRF) and Online Charging

System (OCS); and show that, while it is a major step forward, it may fall short of all

the functionality necessary to meet the growing need of operators to support rapid

service plan innovation. Enhancements to Sy will often be required, and for many

operators, pre-integration of policy and charging, supported by a single product

catalog and a single subscriber view, will best meet the new requirements.

Finally, Section 4 shows how some operators are leading the way with new types of

service plans that draw on the capabilities of policy, charging and related functions

to broaden the appeal of the operators' service portfolios. The past year or two has

seen a big increase in new types of service plans, showing how important it is for

operators to be able to quickly launch new service plans to remain relevant.


Business Drivers for Policy & Charging Integration Policy management has been in networks for ten years, although most deployments

have occurred in the past two to three years. Initial deployments were driven by

traffic management. Typical use cases included identifying and throttling high-

bandwidth applications and users, and (as mobile operators eliminated "all you can

eat" plans) data tier quota management. These use cases were often intended as

"fair usage" measures and were designed mainly to control congestion; they did not

usually require integration of billing or charging systems.

Over the past few years, however, we have seen a major strategic shift in the use

of policy management. Network operators realized that since policy servers are all-

purpose rules engines, they can make use of a far broader range of information to

make classic "if/then"-type decisions based on some

chain of logic. Thus policy could be used to deliver busi-

ness value beyond traffic management.

Why has this change occurred? From a business point of

view, the key driver is a board-level shift in strategy at

many operators to focus on top-line data service reve-

nue growth – a.k.a., data monetization. Everyone recog-

nizes that revenue from the core legacy services (voice

and, in mobile networks, messaging) is in long-term decline, while broadband and

data services revenue is failing to keep pace with growth in traffic. As a result, service

revenue is falling in mature markets such as Western Europe, as Figure 1 shows.

Yet this is occurring at a time, according to ETNO, when capex is increasing to cope

with new demand. For example, European network operator capex rose from €43.6

billion in 2009 to €46 billion in 2012, according to ETNO's Annual Economic Report. In

this environment, simply focusing on cutting costs is likely to become a classic "race

Figure 1: Total Telecom Service Revenues in Europe

Source: The European Telecommunications Network Operators' Association (ETNO)

The key driver is a board-

level shift in strategy at

many operators to focus

on top-line data service

revenue growth

https://www.etno.eu/datas/publications/economic-reports/ETNO_Financial_Report_2013_Def-Lands.pdf


to the bottom." If revenue is to not decline indefinitely, operators need to find new

revenue sources, and fast.

As a consequence, a service differentiation strategy that aims to provide a much

wider range of services and service options to end users – and ideally includes third-

party service and content providers as partners in this effort – is now a key objective.

Many network operators have realized that policy servers could play a key role in

that strategy, as Figure 2 shows. And among respondents who identified themselves

as working for cellular service providers, the result was almost unanimous, with nearly

90 percent saying that the primary purpose of policy management was "to help

introduce new services, price plans and options."

In interviews conducted for the same survey, we found that operators generally

were fully aware of policy's potential to enable service differentiation. For example,

one large operator with multiple mobile properties put it this way:

At the commercial level our strategy [is] to create the ability to have differ-

entiated service packages, with good time to market [for these packages].

Differentiated by access, congestion level, shared accounts, type of con-

tent or application, specific company (e.g., a third party such as Coca

Cola paying for the access to its site/content), and probably other stuff we

haven't thought of yet. There are lots of plans at the commercial level. There

will be new data packages for 4G, promotional tariffs for e.g. people visiting

particular video sites, where we'll need to count things separately from the

main account, perhaps depending also on time of day, or whether access

is on 2G, 3G, 4G or Wi-Fi.

In practice, however, as we shall see in the next section, until fairly recently progress

has been quite slow in achieving these aims.

Figure 2: Service Differentiation Is Now the Main Reason to Deploy Policy

Question: Over the next two years, what is the PRIMARY motivation for your company to deploy

or add to a policy management solution?

Source: Heavy Reading survey of 71 network operators, 2013


Leveraging Policy in Monetization Initiatives In the preceding section, we saw that many operators now see policy manage-

ment as a key enabler of service differentiation and data service monetization.

However, translating theory into practice has been far from straightforward. Many

policy deployments handle only a small number of use cases, often still focused

around fair usage, despite an ambition to broaden the use of the policy platform.

Probing into the reasons for this in our 2013 survey, we found that there are many

issues and challenges, but the number one problem is integration with charging and

billing systems, as shown in Figure 3.

Even with this awareness, it has proven difficult to resolve these issues. In each of the

four policy management surveys conducted by Heavy Reading between 2010 and

2013, integration of policy with charging and billing systems has been the number

one barrier to achieving corporate objectives. It's also worth noting that in our view,

the top three barriers in Figure 3 are linked in a kind of vicious circle: The difficulty of

integrating these key elements, combined with the lack

of coordination among key departments, has made it

nearly impossible to make the business case.

There is a substantial disconnect between the network di-

vision that "owned" the policy area initially; the IT depart-

ment that must be involved when IT elements are con-

cerned; and the marketing team tasked with coming up

Figure 3: Key Barriers to Achieving Objectives in Policy Management

Question: On a scale of 1 to 5, where 5 is "a huge problem" and 1 is "not a problem at all," please rate the

following potential barriers to achieving your company's objectives in policy control & management.


In each of the four policy management

surveys conducted by Heavy Reading

between 2010 and 2013, integration of

policy with charging and billing systems

has been rated the #1 problem


with new service ideas. This was a common theme in the interviews we conducted

for our 2013 survey. For example, the divisional CTO with one major operator stated:

This really all depends on marketing – until they come to us with new ideas,

there is no incentive to invest [in a more sophisticated product]. We were

talking with them about turbo buttons, extra bandwidth for enterprises, and

so on, but it came to nothing. There's plenty of technology out there, but

sales and marketing won't take risks, and don't understand what technol-

ogy can now bring. There are a lot of silos, and a lot of fear.

Marketers could point their fingers right back, complaining that their "new" ideas are

always met with unacceptable cost and timeframe to implement. The problem is a

difficult one to disentangle, because the core issue has been that most "legacy"

policy servers were created by major equipment vendors or by network-oriented

specialists using standards that were created with little input from the IT or market-

ing/business side of the house.

The most important of these standardized architectures is the 3GPP's Policy & Charg-

ing Control (PCC) architecture, which evolved through various releases (R7-R11)

of the 3GPP's overall architecture for 3G and 4G networks from 2007 onward. In

Releases 7-10, ratified between 2007 and 2011, there was no direct standardized

interface between the PCRF and the Online or Offline Charging System (OCS/

OFCS), although there were specified

interfaces from the Policy Enforcement

Function (PCEF) to OCS and OFCS (see

Figure 4). Although there is now a direct

interface, Sy, it was formally ratified only

in 2013, and while most vendors now

claim to support it, hardly any of the ex-

isting policy deployments use it today.

As a result, there is continuing dissatis-

faction among network operators, with

51 percent of respondents in our 2013

survey rating problems integrating with

charging and billing a "huge" or "signifi-

cant" problem, and more than half say-

ing (in answer to a different question)

that the performance of their policy

platform had been "poor" or "fair" on

policy/charging integration. Note that

many of those who did not rate it as a

problem are operators that have so far

avoided the issue by not attempting use

cases that require integration – mean-

ing that among those who have at-

tempted such integration, the great

majority have run into difficulties.

In the next section, we consider the po-

tential solutions and remedies.

Figure 4: 3GPP Architecture, Prior to Sy Interface

Source: 3GPP


Technology Options for Policy & Charging To understand what the options are for integration of policy and charging, opera-

tors must first look at their own situation, and answer some key questions:

Who "owns" charging and billing internally? Where the network department

owns it all, integration may be simpler. Network departments often do their

own online charging, though offline (i.e., contract customers with monthly

bills) is often owned by IT. Organizationally, the integration process is simpler

if a single department owns it all, or if IT and networks have been merged.

What are the key use cases, now and in the future? The greater the com-

plexity, the more likely it is that proprietary or pre-integrated approaches

will be necessary. In any case, success requires good cooperation and un-

derstanding during the selection process between the network and/or IT

departments that specify policy platforms and the product marketing

teams that specify the service plans that run on those platforms.

How often are service plans likely to change? Rapid change implies very

tight integration among policy, charging and other IT functions, especially

the product catalog and subscriber profile information, in order to speed

up implementation of these changes.

Who supplied the existing policy servers and charging or billing systems,

and when? Where deployment was recent, operators may be reluctant to

replace existing systems; otherwise, they may be in a position to consider

pre-integration as a viable option, from a single supplier.

In general, use cases (i.e., service plans) are becoming more complex and chang-

ing more rapidly, and this is likely to require tighter integration of policy and charging

over time, as well as integration with other IT elements. This will be especially true

where policy and charging are triggered by real-time events, based on network

state (e.g., local cell congestion), subscriber state (e.g., location, device in use), or

account state (e.g., remaining data quota or currency balance). Increasingly, too,

policy conditions may be concatenated (e.g. IF subscriber is platinum AND cell is

congested AND application in use is video, THEN apply the following policy).

Figure 5: Telco Plans for Integration of Policy & Charging Systems

Question: Over the next two to three years, which of the following best describes the likely rela-

tionship between your company's policy server and its OCS or billing system?

Source: Heavy Reading survey of network operators, 2013; N = those with plans for integration


Figure 5 shows that of those who were planning to integrate policy and charging,

62 percent said that they would opt for an enhanced proprietary interface or for

pre-integration, against 38 percent looking for a standard interface. In view of the

strong support in general among network operators for use of standards where they

exist, this implies plenty of skepticism about whether Sy is ready to meet all of the

real needs of operators.

The Case for Sy

The Sy standard is part of 3GPP Release 11, which was ratified in June 2013, and

enables the PCRF to base policy decisions on real-time subscriber spending infor-

mation (e.g., balances and spending limits) that are held in the OCS. Compared to

the previous situation, the availability of Sy is a clear step forward for policy and

charging integration that should give the whole area a boost over time.

With Sy, the OCS can maintain policy counters and notify the PCRF when spending

limits are reached, enabling it to take appropriate actions, such as applying

changes to QoS parameters, or data throttling. Sy allows for a number of balances

(e.g., related to different services, devices or customers) to be maintained in various

formats, including money, volume, time or events, with the ability to reset balances

and thresholds (e.g., every day at midnight). As elsewhere in the 3GPP control ar-

chitecture, signaling is based on Diameter.

An example of how this new capability could be used is shown in Figure 6, where

policy counters are held in the OCS, and requested by the PCRF when a subscriber

profile indicates that this should be done.

Figure 6: A Use Case for Sy – Information Flow for Policy Based on Spending Limit

Source: 3GPP


Sy has a number of useful features:

Eliminates redundancy and double-tracking of quotas in PCRF and OCS:

usage thresholds may be maintained in the OCS and used by the PCRF

Reduces synchronization issues: subscriber spending lookup on demand/in

real time by PCRF

Provides ability to shape/influence active sessions in real time

Potentially every/any subscriber billing event can be exposed to policy,

with counters maintained in OCS

Utilize counters for marketing schemes: counters may be used for "limits" or

upsell deals to increase loyalty

Reduces integration time and costs between PCRF and OCS: facilitates use

cases that have a monetization component

Roamer balance validation: enables the PCRF to check whether the out-

bound roamer has a relevant balance for roaming before authorizing the

connection

Use cases for Sy envisaged by the 3GPP include:

Management of volume-based usage tiers, including application of new

policies when certain usage thresholds are reached

Free or discounted pricing based on advertisements, high consumption,

etc.

Promotional services such as "free" usage for limited period or volume

Revenue sharing with third-party applications and content providers

As with any standard, Sy-compliant elements from different vendors may still require

integration work and interoperability testing. For example, different vendors may in-

terpret Diameter standards differently, and some OCSs may not support all of the

required Diameter commands (e.g., re-authorization). Data models may also differ,

making it difficult to add new information elements, and new charging models may

be difficult to deploy.

Unlike other parts of the PCC standard, Sy does not define the actual events. Sy

defines a way for the OCS to notify the PCRF that an event happened, but not what

the event was. The standard doesn't define a set of predefined events that could

be agreed upon between the PCRF and the OCS. The meaning of the events must

somehow be synchronized between the two systems, which can result in synchroni-

zation and integration issues.

Sy Pre-Integration

The fact that the new Sy interface was not ratified until 2013 means that the most

widely used approach to date has been proprietary integration of one vendor's

policy server with another vendor's charging or billing systems. Although no firm data

exists, we believe that while some network operators use the same vendor for both,

the majority use different vendors for each of these. The two products – policy serv-

ers and charging systems – may also be at different stages in terms of end-of-life, or

be owned by different departments, or both, and this may rule out a pre-integrated

approach, at least initially.


Until recently, pre-integration by a single vendor using its own products has been

relatively rare, but this approach has recently been on the rise. This is partly because

more (and better) pre-integrated solutions are available from more suppliers, but

also because a pre-integrated solution may be better suited to a more sophisti-

cated strategy that is focused on supporting a grow-

ing and rapidly changing range of service plans and

options. Sy pre-integration can ensure that rapid ser-

vice innovation is better met, and that future en-

hancements are simplified. This can shorten the de-

ployment time and reduce costs – both common

complaints in our surveys of network operators.

Complements to Sy

Whether pre-integrated or not, Sy alone may not be sufficient; additional comple-

ments are required to fully support operators' monetization efforts. These solutions,

which can be mostly offered as part of a pre-integrated approach, increase the

number of BSS-PCRF touch points in an attempt to deliver greater operational and

marketing benefits. Some of the main complements are described below.

Unified Product Catalog

In particular, pre-integration in some cases supports the use of a unified product

catalog with a shared data model. Product catalogs define in a structured fashion

what individual products consist of, but it's by no means unusual for operators to

have multiple catalogs for different parts of their ecosystem, with no common defi-

nitions. With a unified product catalog, operators can initiate new policies from

within either policy or charging products, and changes (including configuration and

provisioning) flow through automatically, accelerating new service deployment.

Changes can be made in real time, and data inconsistencies are avoided. As op-

erators move to create plans that cross network boundaries (e.g., 3G, 4G and fixed),

this need is likely to increase.

In our 2013 survey, we asked operators whether they were looking to have a unified

database and product catalog across the OCS and PCRF (Figure 7).

Figure 7: Strong Support for Unified Product Catalog

Question: How important will it be for your company to have a unified database or product

catalog across OCS and PCRF for unified product management?


A pre-integrated solution may be better

suited to a policy strategy that is focused on

supporting a growing and rapidly changing

range of service plans and options


Although current 3GPP standards do not include this capability, 40 percent of re-

spondents said this was vital to achieving business objectives, with a further 49 per-

cent saying it was desirable; only 10 percent said it was not required.

Unified Analytics

It's also worth noting here that the interfaces between network and IT functions are

likely to become more complex as the new emphasis on service innovation and

differentiation strengthens. For instance, there will be an increasing need to link pol-

icy creation directly to analytics platforms that seek out patterns, analyze the results

of changes, and recommend creation of new policies based on this analysis.

In our 2013 survey, almost 80 percent of respondents said they intended to link policy

management and analytics by 2015, suggesting the strength of interest in this topic.

Already, we are seeing a closer connection between policy and analytics using

network-side information extracted from DPI software. Integration of BSS and PCRF

should open the way for another level of analytics – providing operators with a uni-

fied view of both network and subscriber behavior, and thereby contributing to

smarter and more effective data offerings.

Unified Subscriber View

Equally, there will be stronger linkages between policy and CRM or CEM so that, for

instance, CRM units are directly informed in real time as policy decisions impact

subscribers directly. For example, a policy decision that reduces a customer's con-

nection speed in the presence of congestion may prompt the subscriber to call

customer care. The customer care representative armed with the ability to see this

in real time has an opportunity to upsell the customer to improve their experience.


Service Innovation in Practice Ultimately, there must be a business justification for the integration of policy and

charging, and this justification takes the form of service plans that enable operators

to differentiate their services from competitors. Increasingly, operators are moving

forward, or say that they plan to do so. Figure 8 provides an indication of the kind

of plans now being deployed.

Figure 8: Service Plan Ideas, 2013-2015

USE CASE DEPLOYMENT COMMENTARY

Bandwidth

throttling

Widely

deployed

Linked to quota usage, monetary balance or other factors. Being replaced or

supplemented by use cases that e.g., give users time to upgrade or add quota.

Roaming bolt-

on & similar

products

Widely

deployed

Many operators, especially in Europe, have added these products, typically based

on a per-day or per-MB charge.

Application-

based

charging

Widely

deployed

Especially in emerging markets, but increasingly elsewhere. Approaches continue to

evolve; most commonly, this entails zero-rating certain apps – especially social net-

working, but apps such as music and video are being added, often for a small fee.

Shared usage

Now being

widely

deployed

Especially in the form of family plans, but also in the form of (small) enterprise plans.

Growing interest also in multiple device plans and multi-network plans, though these

are little deployed so far.

Turbo boost Limited, but

strong interest

Mostly driven by video, but also gaming (a niche application, but one with greater

need); may be linked to specific types of devices; may be temporary or permanent.

QoS-based

prioritization In development

Prioritizing certain applications (e.g., VoLTE) or subscribers (e.g., platinum subscribers)

in real time at cell level is attracting growing interest.

M2M services Limited Typically based on different charging and policy principles, with many variants to

meet different kinds of M2M needs.

Parental control

or other filtering

Limited, but

growing

Recent increase in interest is a result of the rapidly growing ownership of portable

devices by children; sometimes monetized, sometimes bundled into service; more

dynamic and customizable features are a key recent trend.

Cloud storage Spreading fast May be provided free or for a small fee, sometimes in partnerships.

Data sponsor-

ship & revenue

Limited, but

growing interest

The much-vaunted “two-sided business model" has been hard to build, but in the

past year there are more examples of successful cooperation, and some high-profile

efforts by operators to build partnerships.

Rolling quotas Limited, but

spreading fast

Charging is based on automatic renewal offers (can be based on opting in) when

quota is running out, rather than just user-initiated or time-based (e.g., monthly). Can

be linked to charging balance.

Loyalty bonuses,

quota carry-

forward

Limited, but

spreading fast

A churn reduction scheme that is staging to spread more quickly, offering customers

automatic upgrades, extra quota, prioritization and so forth – e.g., after a year with

an operator, on the subscriber’s birthday, etc.

Yield manage-

ment Limited

Special offers based on low usage in particular places or at particular times, or both.

One simple use case entails not metering data traffic during certain off-peak hours.

Cross-service

bonuses Limited

Especially relevant in emerging markets, where the user may be encouraged to use

data services by receiving a defined quota for certain levels of usage.

Source: Various


Figure 9 lists some of the schemes that have been deployed by named carriers. This

is simply a sample from an increasingly long list of new service plans and options

being deployed, with plan innovation accelerating rapidly during 2014.

Figure 9: Examples of New Service Plans

COMPANY PLAN[S] PRICING BASIS

Airtel Africa (17 countries)

Radio subscription, partnering with Radio Express Free; commercial arrangement with Radio Express unknown

Airtel India Google Free Zone Use of Google (Search, Gmail, Google+) not counted against data volume; commercial terms unknown; other operators are also participating

AT&T MobileShare family plan Five smartphones/lines share one plan with 10GB

data (and unlimited talk/text) for $175 per month

AT&T Sponsored Data Content owners pay for data delivered to customers; no pricing information released

Claro Brazil Free Facebook and Twitter Free; no commercial deal in place

Comcast Improved video quality for Netflix customers Paid for by Netflix; terms undisclosed

DT Germany Spotify service bundle (unlimited use premium quality), Premium Speed Pass, automatic re- purchase outside normal billing cycle

Spotify: Several tariffs available from €9.95 per month

Etisalat Try before you buy – 15MB of free data Free up to limit

IDM Lebanon 3G/DSL bundles, single tariff with plans that include free social media traffic at weekend, free messag-ing services, free local news service/apps

Various

Maxis Maxis Bites: Exclusive offer to certain customers of free use of Facebook, Twitter and WhatsApp

Various packages; unlimited browsing and chat on Facebook, Twitter and WhatsApp is RM8 per month

Mobilink Pakistan

Mobilink Web Pass 10 minutes of free Internet use, unlimited use of Facebook and Twitter, data compression

Movistar Usage limited to only one or two application types Lower monthly tariff for restricted services

MTN Uganda "Coke Connect" free data promotion with Coca Cola

Sponsored data (10MB free to users); other operators in Africa have run this promotion; Samsung also involved in some cases

MTN Uganda Charging plan based on African movies or music N/A

MTS Ukraine Free usage of Yandex Maps and Navigator Traffic not counted against allowance; commercial terms not known

O2 Ireland "Oonair"; mobile video sharing Premium cloud-based secure video sharing service; €5 per month

Oi Brazil Maps & navigation service (Oi Mapas) Free; commercial terms with partner NDrive not known

Orange Tunisie Points-based loyalty program (Orange Fidelite) linked to spending

10 points per 1dt spent, can be cashed in for services and products from Orange

Source: Various


Figure 9: Examples of New Service Plans (Continued)

COMPANY PLAN[S] PRICING BASIS

Pelephone

Multi-device ("Multi-surf") plans (up to five devices

on one cellular plan); "double speed" add-on, free

for six months; Musix and SuperTV flat-rate add-ons

Various

Reliance India Unlimited use of WhatsApp and Facebook R16 per month; apps data volume not counted as

data

Sprint Cloud storage Unlimited cloud storage via partner PogoPlug for

$4.99 per month

Tata Docomo YouTube ReCharge 50% reduction in data fees; 100MB for R9, other

plans available

Telekom

Austria Parking application "Handy Parken"

Free app that manages parking throughout

Austria; also available in other TA countries

Telus Canada SharePlus Share data quota between both different devices

and family members

Telus Partnering with Microsoft to promote Skype Purchase Skype credit via Telus account; Skype-

ready phones also offered

Turkcell

Automatic add-on packs at quota limit, free data

from 2AM-6AM, Facebook data plan (flat fee,

unlimited use); Twitter Zero; turbo speed plan

Facebook pack is 6 lira per month; paid for unlim-

ited Twitter and Twitter+Facebook also available

Ucell Unlimited access to both global and local social

network sites $0.10 per day

Vivo Brazil Access to cloud-based digital books (classics,

atlases, dictionaries, etc.) 3,000 works, free for first month, then 0.99 BRL

Vodafone Fiji Daily data passes, speed boosts, loyalty awards

(planned) Daily data passes: 180MB for $1.80 per day

Vodafone

Greece

Internet4 Sharing – multiple devices on a single

account

Smartphone plus four other devices, €35 for 20G;

other tariffs available

Vodafone

Greece Napster by Vodafone

Unlimited access to Napster plus 250MB for €5 per

month

Vodafone Italy Parental control and anti-malware package Free for first three months, then €2 per SIM per

month

Vodafone NZ Vodafone Music (Top 40 chart hits) Four weeks free, then $1.50 per week

Vox Telecom Wildfire gaming service Gaming ports prioritized; free 40GB taster, then

R350 per 20GB; other packages available

Source: Various


Summary: The Road Ahead Practically speaking, the situation for operators has improved in the past 12-18

months, partly as a result of the entry into policy management of new players with

a heritage in IT and BSS, as well as a shift among almost all vendors to focus more

intensively on integration between policy and charging (albeit with varying suc-

cess). Operators are realizing that having a single view of products and customers

increases flexibility, improves accuracy and can lower costs as well.

This is reflected in our surveys, with the proportion of respondents rating integration

of policy management and charging/billing systems as a major challenge falling

from 59 percent in 2012 to 51 percent in 2013. This does not mean that the challenge

is no longer there; there is still a long way to go for most operators. As noted above,

this challenge is exacerbated where operators are struggling to build a policy busi-

ness case based on service innovation, or where there are low levels of cooperation

between network and product marketing divisions.

Operators have come a long way since the early mobile data market of "all you

can eat" services, metered data and simple quota-based services. As shown in the

previous section, the past year or two has seen a flowering of new service ideas and

plans, with some operators now offering dozens of new service packages and

options. There is every indication that plans and options will become ever more

complex, as early success encourages operators to become ever more innovative

in how they serve customers. And as Figure 10 shows, these new service ideas can

(and increasingly are) implemented by tightly integrating policy and BSS elements.

Figure 10: An Example Linking PCRF & BSS

Source: Comverse


However, there is a long way to go if operators are really to make the big strategic

shift required to overcome the slide in revenues and margins. Some operators have

barely begun the journey, and many new business cases and service packages

remain largely in the planning stages. Furthermore, operators need to recognize

that while they need to be progressing toward specific short-term business objec-

tives, there will always be another goal ahead. There needs to be a commitment to

continual innovation.

Keys to success include the following:

Removal of internal barriers between departments

Appropriate integration of policy with charging and other back-office systems

Reorientation of policy away from traffic management to service innova-

tion, with possible change in suppliers

Closed loop with analytics to aid service innovation – analytics that is not

just network-oriented, but a true blend of network and subscriber analytics

Properly specified, a policy management platform can be the central element in

this revolution, but operators must recognize that while the Sy interface between

PCRC and OCS is an important advance, it may not be enough. Sy alone does not

allow a full and complete integration, and any two PCRF and OCS entities must

leverage it to create a complete set of event terminology. Beyond Sy, data mone-

tization requires smooth communication between PCRF and OCS, for example in

the form of unified catalogs and a single subscriber view.

A single-vendor approach may best achieve this, but will not be appropriate for all

operators, not least because it may not fit with existing product lifecycles, or may

not be handled by a single division within the network operator. But whether using

one or multiple vendors, it is clear that operators can no longer afford to maintain

separate silos. To achieve the kind of complex and ever-changing service innova-

tions described in this paper, operators must find ways to automate communication

between BSS and PCRF. It may be no easy task, but is surely essential if network

operators are to retain their relevance in the Web applications era.


Background to This Paper

About the Author

Graham Finnie

Chief Analyst, Heavy Reading

Graham has been working as an analyst and consultant in the telecommunications

sector for more than 20 years. He joined Heavy Reading in 2004, following a ten-

year tenure at the Yankee Group, and has since been responsible for a wide range

of research, focusing primarily on next-generation broadband networks, services

and applications. He became Chief Analyst of Heavy Reading in 2007.

Graham's most recent report for Heavy Reading is RAN Congestion Control & the

Road to QoE, published in September 2012. He is also the author of our semiannual

Policy Control & DPI Market Tracker. Graham has also hosted numerous Webinars

and Live events for Light Reading, and is a regular speaker at other major industry

events. Before becoming an analyst, he was editor-in-chief of the award-winning

industry paper Communications Week International.

Graham is based in the U.K. and can be reached at [email protected].

About Heavy Reading

Heavy Reading, the research division of Light Reading, offers deep analysis of

emerging telecom trends to network operators, technology suppliers and investors.

Its product portfolio includes in-depth reports that address critical next-generation

technology and service issues, market trackers that focus on the telecom industry's

most critical technology sectors, exclusive worldwide surveys of network operator

decision-makers that identify future purchasing and deployment plans, and a rich

array of custom and consulting services that give clients the market intelligence

needed to compete successfully in the global telecom industry.

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