Strategic Drivers for Early

to Market Policy

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

2009 2010 2011 2012 2013 2014 2015 2016Mo

bil

e b

roa

db

an

d (

WC

DM

A,

TD

-SC

DM

A,

HS

PA

, C

DM

A 1

xE

V-

DO

, L

TE

, M

ob

ile

WiM

AX

) c

on

ne

cti

on

s (

00

0s

)

Small-screen (handsets) Big-screen (USB modems, datacards, laptops, netbooks, tablets)

Big-screen reaches

724m in 2016 (20%

CAGR 2011-16)

Small-screen reaches

3.2bn in 2016 (24%

CAGR 2011-16)

Growth overtakes big-

screen from 2013

Source: Ovum

Mobile Broadband Market Status & Outlook

The opportunity: Connection growth continues

Source: Ovum

Mobile Broadband Market Status & Outlook

The impact on the customer: Data, data everywhere

Source: Ovum

Mobile Broadband Market Status & Outlook

The impact on the customer: A shift in the way we consume content

Source: Ovum

Mobile Broadband Market Status & Outlook

The impact on the customer: Data tariffs everywhere

Source: Ovum

• 'Global mobile data traffic grew 2.6-fold in 2010, nearly tripling for the third year in a row' – 'Mobile data traffic [in 2009] was three

times the size of the entire global Internet in 2000‘

• 'Global mobile data traffic will increase 26-fold between 2010 and 2015' – 'Two-thirds of the world's mobile data

traffic will be video by 2015'

– 'Mobile-connected tablets will generate as much traffic in 2015 as the entire global mobile network in 2010'

Mobile Broadband Market Status & Outlook The impact on operators: Every silver lining has a cloud

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2009 2010 2011 2012 2013 2014 2015 2016Mo

bil

e b

roa

db

an

d (

WC

DM

A,

TD

-SC

DM

A,

HS

PA

, C

DM

A 1

xE

V-

DO

, L

TE

, M

ob

ile

WiM

AX

) re

ve

nu

es

($

mil

lio

n)

Small-screen (handsets) Big-screen (USB modems, datacards, laptops, netbooks, tablets)

Big-screen reaches

$50bn in 2016 (12.6%

CAGR 2011-16)

Small-screen reaches

$167bn in 2016 (18.1%

CAGR 2011-16)

Source: Ovum

Mobile Broadband Market Status & Outlook The impact on operators: Revenues not growing at the same rate as connections

• Differentiators are hard to find, so pricing will remain key

• Operators are only able to charge an LTE premium over 3G/3.5G for a while

– < 20% in Asia / >100% in Europe • Plans emphasize high data speeds,

esp. Europe

– Quality & consistency of user experience are powerful differentiators, but it is difficult for users to compare

• Devices offer differentiation in the short-term

• Segmentation by peak speed encourages take-up

– E.g. Vodafone Germany

36 3843

79

95

87119%

129%

121%

0

10

20

30

40

50

60

70

80

90

100

Tele2 Telenor Telia

Mo

nth

ly f

ee

(U

S$

)

0%

20%

40%

60%

80%

100%

120%

140%

% p

rem

ium

ch

arg

ed

fo

r 4

G

Monthly fee of high-end 3G package up to16Mbps (US$)Monthly fee of high-end 4G package up to80Mbps (US$)Premium charged for 4G (%)

Source: Ovum

Mobile Broadband Market Status & Outlook The impact on Operators: LTE is no ‘killer app’ & competition is already intensifying

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

2009

2010

2011

2012

2013

2014

2015

2016

Mo

bil

e o

pera

tor

serr

vic

e r

even

ues (

$ m

illi

on

)

2G data access Mobile broadband

Value-added services Messaging

9% of data revenues

in 2009, falling to 6%

in 2016 (0.65% CAGR

2011-6)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2009

2010

2011

2012

2013

2014

2015

2016

En

d-u

ser

reven

ues f

rom

paid

-fo

r d

ow

nlo

ad

s

(no

t in

clu

din

g a

dvert

isin

g)

($ m

ilio

n)

- D

RA

FT

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

To

tal

paid

fo

r ap

pli

cati

on

do

wn

load

s (

000s)

-

DR

AF

T

End user revenues from paid for downloads(not including advertising)Total paid for application downloads

Total ops & 3rd

parties revenue

hits 8.4bn in

2016 (CAGR

2011-6 16%)

Source: Ovum

Mobile Broadband Market Status & Outlook The impact on Operators: Operators won’t benefit from content & apps growth

Source: Ovum

The impact on Operators: Complex ecosystems

Regulator telecoms banking

Device Vendors

Mobile Operators

MNOs MVNOs

Banks

Government aid

agencies

Technology vendors

Specialist research bodies

Agents & Resellers

Charities/ NGOs

Enablers /

intermediaries

Mobile

Industry

associatns

Mobile

Industry

associations

Enablers /

intermediaries

Mobile Broadband Market Status & Outlook The impact on Operators: Business models must change

Excessive data usage must be paid for

Service bundling is becoming

critical

Fair Usage Policies

Mobile revolution

The end of unlimited?

Key Messages

• There is undoubted demand for mobile data

• Network investment must increase

• Customers can look elsewhere

• LTE is not a panacea

• Long-term & Evolution are the key words

• New Business models & ecosystems

Technology & Network Evolution

2G

GSM

3G+

HSPA+

3G+

HSDPA

3G

UMTS

2.5G

Edge

4G

LTE

9.6k

11M

100M

5.8M

384k

Internet browsing

Web search Email Read blogs

Social

networking

IM News online

Streams video

Streams

music

Web search

1M

File sharing

Download

movies

Play online

games

Internet

banking

Access

speed

Mobile Data Consumption Drivers

Three main drivers

• Customers expect a seamless

experience regardless of device

• Online services worldwide are

increasing cutting deals with

content providers

• The ‘capacity crunch‘ is recognized by most operators

• Growth in demand for capacity has exceeded the growth in supply

• Revenue is no longer connected to the cost model; flat rate is no longer a viable option

• User expectation of mobile broadband is set by their experience with fixed broadband

• OTT providers are launching bandwidth intensive applications

• Mobile networks are experiencing more capacity issues

• Anticipating traffic patterns & building traffic models

• Managing traffic load while increasing service personalization

• Striking a balance between network & pricing policies

• Ensuring QoE for the increasing demand for quality video experience & enhanced monetization

Current Challenges in Mobile Data Supply

Policy Management Objectives

What’s Policy all about

• Differentiated access to services

• Allocation of network resources to

better manage congestion burdens

Dynamic

decisions

• Subscriber profile, location, equipment

• Network capacity

• Source & type of traffic

Decisions

based on

• Any IP application

• Mobile, wireless & cable/broadband

Applicable

for

Policy

Enterprise/

Parental Control

Fair Usage

Congestion

Mgnt

Bill shock

Charging

Content Charging

Location Based

Charging

Spending

rewards

Service

personalization

QoS

Premium

services

Policy Management

From network-centric to subscriber-centric approach

Control

Fair Usage

Congestion

Management

Parental

control

Bill shock

Prioritization

Subscriber self

care and

personalization

Application

bundles

Service

limited pass

• Complex spend control

• Resource prioritization

• Dynamic up-selling

• Congestion control

• Load balancing

• Optimized routing

Monetization Differentiation

Evolving Services

New requirements

By Subscriber profile

By Access method

Gamers Business

Heavy

users Basic

Blackberry IPhone

Key

applications

Parental

control

Allocate

number

Set

priorities

Premium services

Spending

reward Bill control

By Application

By Device

By Volume

By Time

New Business Models

Consumer electronic devices – future growth of mobile comms

Policy Management

Emerging Markets – Need for Congestion free Networks and Traffic Monetization

Network Pricing

Mobile data

usage

Policy Management

Emerging Markets Status

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2010 2011 2012 2013 2014 2015 2016

Glo

bal m

ob

ile b

road

ban

d c

on

necti

on

s (m

illi

on

s)

of which big-screen

of which small-screen

• Transition to 3G and LTE begun

• Limited CAPEX to increase coverage

• Internet penetration in emerging markets:10%

• Data services cost at least twice in emerging markets comparing to mature markets

• Broadband pricing is low

• In several emerging markets data services are already charged using usage based models

• Reduced data delivery costs evolving to 3G/4G, implementing policy control & optimizing the network

• Need for tiered, dynamic, usage based pricing and charging

• Tiered services

• Mobile advertising & mobile commerce on the corner

• Challenges in terms of product innovation, infrastructure investment monetization & costs optimization

• Growing 3G/LTE penetration

• Lowe cost Smartphone and high concentration in urban areas

• Increasing bandwidth demand

• Popular mobile applications and flat rates

Policy Management

Mature markets – Need to reduce data delivery costs

Strategic drivers for policy adoption

Functional footprint

POLICY

Subscriber Intelligence

Personalised subscriber service

experience

Assured Monetisation

Revenue assured & flexible

service charging

Marketing Improvements

Increase ARPU with tiered

and evolved data services

• Proven experience and references

• Cost effective alternative

• Multivendor operability

• Established solution roadmap

• Focused on innovation

• Willing to offer knowledge sharing opportunities and training

• 3GPP compliant

• Can offer a best of breed, tailored made pre-integrated solution

Policy Management

Vendor evaluation

– Carrier-grade, highly extensible and configurable solution, enabling you to adapt it easily to changing business needs

– Established roadmap and evolution path to 4G/LTE and for policy convergence across both fixed and mobile

– Independent of network infrastructure

– Full 3GPP compliant

– Contextual, supported by subscriber awareness

– Become an active member of VAS and content from the network value chain

– Engage in beneficial partnerships

– Easily charge for OTT services

Policy Management

Recommended approach: implement today a scalable solution

Take Away Ideas

• Policy management goes beyond managing the supply capacity & should be subscriber centric

• New business ecosystems require an entirely new approach – early adoption of a policy management will bring a competitive advantage

• To generate new revenue streams, policy needs to be deeply integrated with BSS - particularly with the charging components

Mobile Data Accessibility

Mobile Broadband Users Growth: 2010-16

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2010 2011 2012 2013 2014 2015 2016

Africa

Middle East

Asia-Pacific

Eastern Europe

Western Europe

South & Central America

North America

Source Ovum

• Mature markets are driving innovation, but emerging markets are driving volumes. According to an Ovum forecast, overall mobile broadband users will grow at a CAGR of 28% by 2015.

• While growth will continue to be robust in Western Europe and North America, the strongest growth is forecasted to occur in the emerging markets of Asia-Pacific, the Middle East & Africa, with compound annual growth rates exceeding 35%.

How is the future profiling?

• Video traffic is doubling every 12 months

• By 2015 there will be in use approximately

one mobile-connected device for each

person from the planet

• Smartphone's user consume more than

twenty times more data than traditional

handsets users

• 48 million people around the globe have

mobile phones even though they don’t have

electricity at home

Policy Management

Mobile data monetization use cases

Policy, Charging & Traffic Control

Use cases

Market Offer

Tiered Priced Quotas

Time Based Services

On-Demand Capacity

Rich Communication Services

Machine to Machine Services

Cloud Computing Services

Per Usage Based Services

Service Control

Backhaul Reduction

Roaming

Application Filtering

Application Bandwidth Control

Application Store Partnerships

Pre-pay Control

Fixed to Mobile Convergence

Device Based Control System Function

3GPP PCRF

3GPP OCS/OFCS

Active Mediation

Network Edge Rating

3GPP PCEF (Service Level)

Deep Packet Inspection

WIMAX CSN Node

Customer Experience

Bill Shock Control

Advice of Services & Charge

Application Quality of Service

Service Personalization

On Demand Activation

Employee/Parental Control

Loyalty Rewards

Service Self-Care

• Monitoring and metering applications

• Prioritize, shape and block traffic flows to control congestion

• Dynamic resource allocation

• Exploit highly valuable information such as:

− Most popular applications for each service plan, period, region

− Top users per service plan, period

− Quota usage

• Enforce or restrict OTT applications traffic

• Subscriber awareness and quota management

Policy Management

DPI – When and Why Do You Need it?

− Greater personalization and user control

− Enhance management and monetization

− Real time network intelligence

− Content usage patterns

− High value customers

Policy Management

Strategic drivers

Broadband Usage Protection Market Segmentation Extend Business Paradigm

Bill Shock

Fair Usage, FMC &

Capacity Mngmt.

Tiered Quota

/ Usage Mngmt.

On Demand Application

QoS Capacity&Control

Managed Services

(VoIP, IMS,RCS, M2M)

2-Slided Business Models

(Apps Store QoS & Telco 2.0)

Policy Management (Gx)

& Monitoring

Policy Management

(Gx), Charging (Ro),

Monitoring &

Enhancement

Policy Management

(Gx&Rx), Charging

(Ro&Gy), DPI,

Monitoring &

Enhancement

Policy Management (Gx,

Rx, S9) & Charging

(Ro&Gy), Monitoring &

Enhancement, DPI

Applicable

Mobile 3GPP

Standards 2.5G/3G PCRF &DPI

2.5G/3G PCRF, PCEF and

OCS/OFCS

2.5G/3G/LTE Visiting/Home PCRF,

OCS/OFCS, PCEF, IMS, GAN and

AF

Finance Minimizing Network CAPEX

And Customer Care OPEX

Network Investment and

Reducing ARPU Erosion

ARPU Improvement through

improved value proposition

Mobile Service Evolution

Systems

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