the data dilemma

© 2010 IBM Corporation

The Data Dilemma Global Telco BAO CoE

Global Telco BAO CoE

Version: 1.0 Date: May 2010

Analytics for

Smarter Telecom

Sara Philpott, Global Telco BAO CoE 2 © 2010 IBM Corporation

The Real Value of Analytics for Telcos

 Market Forecasts  Great news for operators  Managing capacity  Flat rate pricing   Investment decisions  Operator Challenges  Capabilities required  Advanced Analytic Solutions

Content


Data usage forecast to grow and grow………..

  There will be 5.8 billion mobile subscribers worldwide by 2013 (Portio Research). Nearly 25% of total mobile subscribers worldwide will be participating in mobile social networking by 2013, (Informa)

  29% of all cell phones will be smartphones by 2014 (Ovum)

  60% of the world’s population is now covered by a next-generation high speed mobile network. Mobile Internet users will be sending and receiving more data in one month than in the whole of 2008 (ABI Research).

  Globally, mobile data traffic will double every year through 2014, increasing 39 times between 2009 and 2014. (Cisco)

  Revenue from Data is expected to exceed voice revenue by 2011 (Pyramid Research)

  Almost 66% of the world's mobile data traffic will be video by 2014 (Cisco)

  Brand expenditure on mobile advertising will quadruple by 2014 (Juniper Research)..

The Data Dilemma

Source: ABI Research, 2009


The Data Dilemma

So, all great news for operators?

  At last return on investment for 3G and HSDPA infrastructure

  Data set to replace for declining voice ARPU

  New services and applications to drive new business expansion

  More adoption of mobile data based on high availability of high speed bandwidth, proliferation of affordable smartphones and a long tail of applications


The Data Dilemma

Mobile broadband traffic is increasing at such an alarming rate that the planned capacity benefits from LTE are now considered to be insufficient to tackle the traffic problem.

Attention is now shifting to the traffic loading problem on the existing 3G networks utilising alternative approaches*.

Operators are looking to optimise 3G and HSDPA infrastructure and are slow to invest in LTE/4G.

“Global mobile data traffic will roughly double each year from 2009 through 2014” Cisco 2010

*Source: Kieran Moynihan, IBM

Network is dimensioned for this peak traffic

Keeping up with the pace of data growth is now a key challenge for operators..

“Getting the right customer experience is not just a linear path of investment in networks” Desmond O’Connor, T Mobile


The Data Dilemma

Only problem – flat rate billing pricing models are now widely adopted and have helped to fuel data usage explosion……

Bandwidth availability

Data Growth

Time

Increase

Flat Rate pricing

It is imperative for Operators need to extract more return on investment required to support data traffic usage

But How?

By the end of 2010, 450 million, mobile broadband subscribers worldwide equating to 45% of the global broadband market.

“How many industry that are relatively capital intensive can live with a model that says ‘pay one fee and it doesn’t matter how much you consume’? People who are using multiple gigabytes each month are paying the same as somebody who’s using one megabyte. The key is to get a balance between the two, and that’s a live strategic debate for us at the moment.” Matthew Key, O2 Telefonica*

Source Telecoms.com March 2010


The Data Dilemma

  Manage the spiralling complexity of the operator network   Manage the growing demands for mobile broadband traffic,   Manage the physical constraints of spectrum   Meet carrier grade service requirements within a wireless IP

environment,   Meet the expectation of customers for a consistent experience   Manage 3rd party applications and various data services and

pricing models.

*Source: Kieran Moynihan, IBM

Challenges faced by operators require them to

“The Intelligent operator will have alternative options defined for traffic management and routing, intelligent throttling, for deploying compression and for moving traffic to partner/alternative networks.” Desmond O’Connor, T Mobile


The Data Dilemma

Investment required to offer tiered data services is substantial and operators unsure of business case

BTS BSC SGSN GGSN Content Server

G b G n G i

Deep Packet Inspection

Policy Management

  Deep packet inspection is required to differentiate between different types of data traffic – ie browsing versus large data downloads. This solution enables an operator to offer a differentiated data pricing model based on data service used and/or quality guaranteed. Cost to deploy solution is significant as it considerable software deployment across the entire access and network elements.

  Policy management solutions enable operator to control data usage based pricing models and to guarantee a quality of service for premium users. Again cost to deploy this solution is significant.


The Data Dilemma

“It’s an irony particular to the mobile data boom that wireless carriers, for so long motivated by drawing business away from the fixed line, are now scrambling to dump their own traffic back onto it wherever it’s available…” Mike Hibberd. Telecoms.com

Operators are looking at other solutions to manage network infrastructure investment costs

“Offloading to wifi is great for us and great for the customer,” says Matthew Key, CEO of Telefónica Europe. “The customer gets a better experience and it takes the traffic off of our network,” he adds, in the kind of statement that might almost have been unthinkable from a large cellular carrier just a few years ago.

Instead of continued investment of network rollout and focused network expansion strategies, Operators are investigating alternative solutions:

1.  Traffic offload – Wifi or Femtocells

2.  Network share solutions


The Data Dilemma

 Even if offloading to Wi-fi and Femtocells is used, managing the backhaul capacity is a concern for operators

 Growing concern on signalling consumption from smartphones data usage. “We found that there was this amazing acceleration in signalling traffic. On measuring it what we noticed was that while a dongle or data card was using 25 times more data than a smartphone, the signalling ratio was only three to one,” Dave Nowicki, Airvana

 Fiber, spectrum and signalling infrastructure could emerge as main bottlenecks for operators.

However mounting network costs is still a major concern…

“Fast dormancy" – Used by some operators to minimise the amount of battery power needed for iphones and so extend the life of the phone. This had the effect of (in some cases) tripling the signalling on networks - which lead to poor network performance and customer experience


The Data Dilemma

Smart Operators are deploying 1.  Packet dropping and shaping (not appropriate for video streaming however)* 2.  Traffic control by tariff & contract enforcement (static and dynamic policy control new

pricing models, traffic throttling)* 3.  Traffic Compression and acceleration (ie video traffic management)* 4.  QoS (differentiated quality of service based on service/customer priority)* 5.  Intelligent Traffic offload (sending traffic on alternative cost or performance optimised

network routes)* 6.  Optimisation of available network capacity deep packet inspection and policy control

solutions 7.  Tailor made promotions to better utilise available capacity and conditioning customer

usage during off peak periods 8.  Solutions that anticipate and predict traffic surges and respond appropriately through

network and customer care management 9.  Solutions that ensure a consistent customer experience regardless of location, device or

service type

A number of techniques are available to operators in addition to network expansion investment

Source: Telecoms.com webinar, May 2010


The Data Dilemma

Smart Operators are deploying 1.  Packet dropping and shaping (not appropriate for video streaming however)* 2.  Traffic control by tariff & contract enforcement (static and dynamic policy control new

pricing models, traffic throttling)* 3.  Traffic Compression and acceleration (ie video traffic management)* 4.  QoS (differentiated quality of service based on service/customer priority)* 5.  Intelligent Traffic offload (sending traffic on alternative cost or performance optimised

network routes)* 6.  Optimisation of available network capacity deep packet inspection and policy control

solutions 7.  Tailor made promotions to better utilise available capacity and conditioning customer

usage during off peak periods 8.  Solutions that anticipate and predict traffic surges and respond appropriately through

network and customer care management 9.  Solutions that ensure a consistent customer experience regardless of location, device or

service type

A number of techniques are available to operators in addition to network expansion investment

Source: Telecoms.com webinar, May 2010

Advanced Analytics can help operators with


The Data Dilemma

IBM

Advanced

Analytics

Solutions

IBM have the solutions and the integration capability

  Utilise available capacity by offering promotions and conditioning customer usage during off peak periods,

  Anticipate and predict traffic surges and respond appropriately through network and customer care management,

  Ensure a consistent customer experience regardless of location, device or service type.


For information regarding analytics solutions for any of the challenges described herein, please contact [email protected] from the Global Telco Business Analytics and Optimisation Centre of Excellence for more information, or visit our website:

Global Telco BAO CoE http://www-935.ibm.com/services/ie/gbs/telcobaocenterofexcellence/

Analytics for

Smarter Telecom

the data dilemma

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