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P09
POLICY CONTROL
How mobile operators are using policy control to target and generate new service revenue streams.
P34
on how new tools are being used to optimise the user experience.
P39
Accelerate your drive to the forefront. Be rst to market with up-to-date Agilent LTE-Advanced resources, expertise and test tools. Thats thinking ahead. Thats Agilent.
The LTE Advanced Portfolio h LTE-A rt Design libraries for LTE-A physical layer es ar o E Generate LTE-A signals to todays sta dards e gnals y stan and beyond beyo Analyze multiple LTE-A signals simultaneously alyze
U.S. 1-800-829-4444
Canada 1-877-894-4414
I need a high performance signal analyzer that will take me well into my wireless future.
Save up to 40% on measurement applications and view LTE ACLR, W-CDMA, Noise Floor Extension app notes at www.agilent.com/nd/future
*spurious free dynamic range 2010 Agilent Technologies
Accelerate your drive to the forefront. Be rst to market with up-to-date Agilent LTE-Advanced resources, expertise and test tools. Thats thinking ahead. Thats Agilent.
The LTE-A The LTE Advanced Portfolio rt Design libraries for LTE-A physical layer es gn ar o EGenerate LTE-A signals to todays standards gnals y s and beyond beyo Analy e multiple LTE-A signals simultaneously alyz
I need a high performance signal analyzer that will take me well into my wireless future.
Save up to 40% on measurement applications and view LTE ACLR, W-CDMA, Noise Floor Extension app notes at www.agilent.com/nd/future
*spurious free dynamic range 2010 Agilent Technologies
I need a high performance signal analyzer that will take me well into my wireless future.
Save up to 40% on measurement applications and view LTE ACLR, W-CDMA, Noise Floor Extension app notes at www.agilent.com/nd/future
*spurious free dynamic range 2010 Agilent Technologies
u.s. 1-800-829-4444
canada: 1-877-894-4414
The mobile operator journey from advertising to marketing, and how to navigate it.
INSIGHT REPORT
MOBILE
EUROPE
ALSO INSIDE:
ROAMING STRUCTURES TO CHANGE
BARCELONA!
P09
POLICY CONTROL
How mobile operators are using policy control to target and generate new service revenue streams.
P34
on how new tools are being used to optimise the user experience.
P39
Contents
August/September 2011
Results round-up from northern Europe.
REGULARS
EDITORIAL
FEATURES
VIDEO OPTIMISATION
What are the requirements for the optimisation of video streamed across mobile networks, and how should operators best optimise video content? (Sponsored article)
04 06
Keith Dyer says that while the Greek governments dash for the cash is understandable, it shouldnt be repeated.
32
NEWS
Ericsson, Nokia and Telenor results; Survey shows appetite for carrier provided WiFi calls; Olaf Swantee to take over at Everything Everywhere; O2 enters offers market; InMobi Europe shows mobile ad growth of 21% from Q1 to Q2 2011; EC outlines "profound" changes to roaming market; TeliaSonera joins FT-Orange and Deutsche Telekoms M2M; Legacy culture stifling change; Consumers ready to pay for better access and quality; Vodafone and 3 launch own app store channels; Turkcell launches Android NFC.
POLICY CONTROL
From bandwidth management to revenue generation, those selling the solutions are hoping to make the wider strategic case for policy within the operator.
34
NETWORK OPTIMISATION
With operators taking steps to gain a customer-centric approach, how does gaining a customer view impact upon network optimisation decisions and processes?
39
DIARY
A selection of the major mobile events and conferences in the weeks ahead and a glance at some of the stories to have missed the real news pages.
42
INSIGHT REPORT
Keith Dyer introduces this issues Insight Report into mobile advertising and marketing. The report points the way ahead for operators in this field, guided by new research and analysis.
15
SPONSOR S FOREWORD
Alex Moukas, CEO of report sponsor Velti, welcomes this Insight Report from mobileSQUARED, and says that the time is ripe for operators to take the step to the next level of mobile advertising and marketing.
16
Mobile Europe | 3
Comment
editor: keith dyer
Can the industry afford to look to the long term? Governments find it hard to turn down a short term buck at the expense of long term tax revenues at the best of times. When they are neck deep in the largest financial crisis to hit their country in modern memory, it is understandable that they take every opportunity they can to maximise short term gain. That appears to be what is happening in Greece, where the government is renewing 2G spectrum licenses for Wind Hellas and Vodafone Greece, whose license terms for 900MHz and 1800MHz spectrum expire next year. Cosmote, the incumbent operator that has much less spectrum at 900MHz than its rivals, does not see its license expire for a few more years. It will be keen to acquire more sub-1GHz spectrum as it then seeks to refarm it for 3G and 4G services. And so the Greek Government is fulfilling a dual purpose. It is determined to extract the maximum value possible from the spectrum, and it is hoping that by going for an auction it will attract bids for 900MHz spectrum from Cosmote, pushing up the price. The operators are crying foul, and one consultant has warned that there may even be a refusal to bid, in protest. Im not one of those who automatically assumes governments should give away spectrum. Operators are commercial entities that should expect to pay fair value for spectrum. Yet studies have repeatedly shown that loading the tax take on the front of a license term limits the long term returns. The Greek government may feel it has no choice, but its model of auction plus high reseve price, should not become a The Greek government may template for 2G spectrum renewals. Also coming down hard on the operators is Neelie Kroes, who is imposing her own double whammy on the industry imposing retail and wholesale price caps on data roaming as well as proposing a long term restructuring of how roaming will work within the European mobile industry. It appears she is offering the industry only pain, as the EC Digital Agenda insists there will be next to no roaming premium within the EU by 2015. Yet there is opportunity too. The imposition of rules allowing operators to offer separate roaming contracts, whilst users retain their existing SIM, number and handset, means that operators now have a case to go roaming where they have previously lacked either a group entity or a competitively priced roaming partner. The prospect of operators cutting each others throats for roaming revenue is precisely what the EC wants to see, of course, trusting to competition to do its work (with the braces of price caps still gripping hard). In response, the operators strongly hint that they will be forced to make up the shortfall elsewhere in domestic tariffs or non-EU roaming prices. They also hold up the scary prospect of being unable to invest in future networks. Its a similar story to the net neutrality debate. If we cant monetise bandwidth, we cant invest. As roaming revenues inexorably decline, I wouldnt be surprised if (The Netherlands aside!) we see the EC showing more flexibility on net neutrality. Stranger things have happened
MOBILE
EUROPE
Editor: Keith Dyer keithd@mobileeurope.co.uk Direct tel: +44 (0) 20 7933 8999 Production Manager: Tania King Sa l es Ma nage r: Shahid Ramzan shahid.ramzan@mobileeurope.co.uk Direct tel: +44 (0) 20 7933 8980 Commercial Director: Justyn Gidley justyn.gidley@stjohnpatrick.com Direct tel: +44 (0) 20 7933 8979 Publishing director: Chris Cooke ISSN: 1350 7362 Fr ee S u b s c r i p t i o n s Mobile Europe is a controlled circulation monthly magazine available free to selected personnel at the publishers discretion. If you wish to apply for regular free copies then please write to: Database Services St John Patrick Publishing Ltd PO Box 6009, Thatcham, Berkshire, RG19 4TT. Tel: +44 (0) 1635 879361 Email: mobileeurope@circdata.com or register free online at: www.mobileeurope.co.uk Paid Subscriptions Readers who fall outside the strict terms of control may purchase an annual subscription . UK 1 Year - 96. International 1 Year - 120. Subscription enquiries should be sent to: Saint John Patrick Publishers PO Box 6009, Thatcham, Berkshire RG19 4TT United Kingdom Tel: +44 (0)1635 879361 Fax: +44 (0) 1635 868594 Email: mobileeurope@circdata.com Web: wwwmobileeurope.co.uk
feel it has no choice, but its model of auction plus high reseve price, should not become a template.
The views expressed in Mobile Europe are not necessarily those of the editor or the publisher. Mobile Europe is published by Saint John Patrick Publishers Ltd, 6 Laurence Pountney Hill, London EC4R 0BL.
4 | Mobile Europe
News
results...results l Everything Everywhere
Norwegian Kroner in future technologies, in Norway alone, in the quarter. Then we had Nokia, completing the Norway - Sweden - Finland trinity. No doubt the overall nature of Nokia's results are well known. With Symbian being shunted aside, and MeeGo also in a holding pattern with its N9 phone being well received but given no mass channel to market, the company essentially had nothing new to sell. In Europe, unit sales were down 30% year on year and 21% quarter on quarter. In total, the company sold just over 18 million devices (all devices) across Europe in the quarter. Its networks unit, NSN, showed better results though. In Europe it saw net sales decline by just 1% year on year, and rise 12% quarter on quarter. On a global basis sales were up 20%, although this included results of the Motorola acquisition. Excluding the Moto sales, NSN equipment sales would have risen 8% quarter on quarter. As it was, with Moto included, sales rose 15% quarter on quarter. Moto's network sales would have had limited impact on NSN's European sales, one suspects. Nokia and Siemens also announced they would not be looking for a private equity buyer for the division.
6 | Mobile Europe
News
operator WiFi
Mobile Europe | 7
News
advertising & marketing
Caption
8 | Mobile Europe
News
roaming legislation l M2M roaming
Mobile Europe | 9
News
innovation l NFC in Turkey
10 | Mobile Europe
News
consumer survey l operator app channels
Vodafone and 3 launch own app store channels on Android and Ovi
Vodafone has launched a Vodafone content channel within Android Market. For Vodafone users the homepage of the app store now has a Vodafone icon, given equal prominence to Market's usual promo items of Apps and Games. A click on the channel takes a user to a Vodafone channel a store within a store that includes Vodafone apps as well as sponsored or discounted partner content. The channel at the moment has Vodafone Music Shop as its top listing, then follows a Vodafone Maclaren news feed app. After that, the channel aggregate apps from Vodafone partners, including Rough Guides, Shazam, and others. Vodafone says the channel is the first of its kind in Europe. Lee Epting, Vodafone Groups Content Services Director said, Together with Google, Vodafone has made it really simple for customers to get to the essential apps they can trust. More than 75 million Vodafone customers around the world are regularly using the mobile internet, and we are committed to giving them the best possible experience. This focus on quality over quantity helps deliver on that commitment. The own-brand channel is already live in the UK, Germany, Italy, the Netherlands and Spain. Vodafone said it would launch in Greece, Ireland and Portugal before long. The Vodafone channel is a further example of the ways in which operators are trying to remain relevant in the applications and content space. Instead of expecting users to come to a Vodafone branded portal, the operator has bundled its apps and content within an existing, OTT platform. Three UK followed Vodafone by also partnering with an app store provider to have a dedicated operator channel within the app store. This time the app store is Ovi, where there will now be a dedicated Threebranded page for the operators customers. The Three Likes page will include a choice of 40 apps recommended by Three and will be accessible to the operators customers using Nokia Symbian devices including the Nokia C7, Nokia E7 and Nokia N8. Three will recommend different apps every week. The new Nokia X7 will be the first handset to be integrated with the latest version of Ovi Store at launch this week. Charlotte Spencer, Director of Products and Services at Three, said, This partnership is another example of how Three is leading the smartphone revolution. By recommending apps that are relevant to our customers and allowing them to pay through their phone bill, customers will have a better, easier and faster experience.
Mobile Europe | 11
News
Vodafone and O2 results
grew by 24.5% to 1.5 billion, representing 13.7% of Group service revenue. Mobile internet revenues grew 44.2% in Europe, while European messaging revenues grew 6.9%. Germany Service revenue increased by 0.2%(*) driven by strong data and enterprise revenue growth offset by the impact of MTR cuts. Data revenue grew by 21.4% as a result of the increased penetration of smartphones and Superflat Internet tariffs. Enterprise revenue grew by 4.4% driven by fixed line revenue growth of 8.6% and mobile revenue growth of 3.3%, as a result of customer wins during the quarter and the previous financial year. Total mobile revenue remained stable in the first quarter despite the impact of an MTR cut effective from 1 December 2010. During the quarter 1.1 million mobile contract customers were migrated to a mobile virtual network operator following revised agreements with wholesale partners, resulting in an overall reduction in reported customers. Vodafone had 27,000 LTE customers at 30 June 2011, following the launch last year. Italy Service revenue declined by 1.5%, resulting from lower voice revenue which continued to be impacted by price competition and economic weakness. This was an improvement of 1.5 percentage points on the growth rate experienced in the previous quarter. Enterprise revenue performed strongly, driven by a higher customer base and Vodafone One Net, a converged, fixed and mobile one number service. An increase in the penetration of smartphones,
12 | Mobile Europe
News
German spectrum l Greek spectrum l Radisys acquisition
infrastructures in line with their business models. Last year's frequency auction was the key means by which all German mobile operators obtained new and additional frequencies. Such a spectrum package is unique in Europe. However, we are keen on setting the course for the next decades and to settle the issue of frequency use after 2016 at an early stage. A redistribution merely for a few years would entail considerable problems and from an economic viewpoint would certainly not lead to the desired results, Matthias Kurth, President of the Bundesnetzagentur, said. In its draft consultation the Bundesnetzagentur comes to the conclusion that competitive distortions resulting from the current spectrum packages are unlikely. No competitive distortions were identified when examining the 900-MHz range in isolation or when studying the totality of frequencies made available to the parties concerned for the provision of radio access networks for the offer of telecommunications services.
Radisys completes Continuous acquisition, promotes staff to senior roles in merged unit
Continuous Computings takeover over by Radisys is now complete. The deal sees Radisys pay $73 million in cash plus 3,666,667 shares of RadiSys common stock. In addition RadiSys will make earn-out payments based on revenues generated by a specified set of Trillium products over a three year period following the closing of the acquisition. Mike Dagenais, President and Chief Executive Officer of Continuous Computing, from 2006-2011, will be CEO of the merged operation. Mike Coward, a Continuous Computing veteran and former CTO, Vice President of Engineering, and General Manager at the company, scores a role as Vice President, Strategy and Innovation. Amit Agarwal will become Vice President/General Manager; Software and Professional Services. And Manish Singh, who came into Continuous Computing through Trillium, will now be Radisys CTO.
Mobile Europe | 13
MOBILE EUROPE
INSIGHT REPORT
REPORT AUTHOR:
NICK LANE Nick is Chief Strategy Analyst, mobileSQUARED mobileSQUARED provides specialist research which enables brands, agencies and the mobile industry to increase engagement with the mobile consumer. It delivers exclusive forward-looking data on mobile device usage, focusing on mobile web, app, commerce and marketing trends and usage, and mobile advertising responsiveness.
INSIGHT REPORT
SPONSORS FOREWORD
At Velti, we are fortunate to work with some of the worlds most innovative and exciting operators; operators who are committed to taking advantage of the increasing global mobile marketing spend. Our mission is to learn from, share and enhance the knowledge these operators hold already, and to enable all operators to take advantage of the opportunities that exist to build profitable revenues and increase customer loyalty. In a commoditised world, operators need to work extra hard to keep customers. The right mobile marketing strategy can increase average revenue per user, reduce subscriber churn, enhance brand loyalty and efficiently sell mobile advertising inventory. It is no wonder they are waking up to the proven, measurable impact of the channel. As well as marketing to customers for their own benefit, operators can also offer a compelling marketing product to brands. As brands seek to gain efficiencies and get more from their marketing budgets, targeting and measurement are becoming key strategic priorities. This creates a powerful opportunity for mobile operators, who have both a large customer base, about which they have an enormous amount of data and insight, and a way to reach these customers anywhere, any time. Permission-Based Marketing enables mobile operators to understand and monetise their customer relationships while providing a uniquely targeted and measureable channel for brands as well as added value for the customer. By creating and segmenting an opt-in customer database, you can deliver highly relevant, targeted offers to customers based on their own preferences, with their permission. This Mobile Europe Insight Report accords precisely with our aim to learn, enhance and share knowledge of mobile marketing. We know that there is great work going on across the region and operators can benefit from best practices. This report is about advancing mobile marketing expertise to the next level for the operator community and is a must keep.
SPONSORED INTERVIEW
Keith Dyer speaks to Stephen Upstone, VP of Sales and Development for Europe at Velti, about the channels available to mobile operators to increase customer loyalty and mobile revenues.
that's hardthe essence of variations, work. all When you are a carrier loyalty programmes is deploying thousands of to establish an ongoing macrocells,learning more context for element management is about customers, fundamentally different influencing their behavior, fromproviding them with and supporting tens or hundreds of in return. added value thousands of femtocells. You still The information gathered have all the complexity through loyalty of a 3G macrocell but programmes, including the opt-in one to two orders of magnitude larger. bothscale is profiles and user activity tracking, helps the The problem carriers need to solve is to have one company provide a more relevant and competitive platform managing all of this. Once again this plays experience, increasing retention and customer lifetime to our heritage of and media tens of millions the value. For operators supporting companies, with of carrier class CPE devices. right opt in permissions, this preference information
STEPHEN UPSTONE: Loyalty programmes play an do notably supporting AT&T's femtocell service. Why
you think important role in competitive markets, where increasinglyCisco is well-placed to meet carrier needs for femtocell deployment? the similarity of mobile offers makes differentiation hard to achieve, rising volume of advertising noise makes it JIM TAVARES: difficult for brands to stand out and it is not an option to We are very excited As mobile operators and other compete on price alone.about the market because we believe it work to increase customer retention and companies leverages so many key capabilities we have as a the leading operator is the have gone beyond value,company. First, therebrands long tradition of Scientific Atlanta to deliver carrier-grade CPE into the one-off tactical marketing initiatives to create ongoing home. And that connect customers with their brand programmes of course there is our position within in network infrastructure - uniquely differentiated ways. relevant, meaningful, and that has only been strengthened by the Starent acquisition. value of a After all, the first step toward increasing theFemtocell plays to base segments, and our strength in both customer both is to make customers happy. By giving segments mean we have the potential to support customers more of what they wantmore value for their massive more personalized and exciting money, agrowth in the mobile industry. customer Importantly, we believe we can provide end-toexperience, more opportunities to engage in the content end femtocell infrastructure as one company, from and activities they likecompanies can demonstrate their the radio front end to the back-end provisioning commitment to listening and responding to their side. We've partnered and a the foundation for profitable, customers needs, withlaybest-in-class provider in ip.access customer relationships and more not long-term to provide the RF piece, asathat is opena traditional solution consumers. profitable dialog witharea for us. Of course, everyone tends to think about the radio side, but the provisioning side will impact as well. challenges KEITH DYER: What are some of the Unless consumer deployment of femtocells is zero touch then there's facing operators today and how can loyalty help? no way carriers can scale - and we have the experience to provide Consumers have different STEPHEN UPSTONE: the whole integrated provisioning process. motivations and reward levers, varying from savings to
Orange Spain looked to a loyalty programme to deliver a differentiated experience for its users.
also enables targeting to increase the value of KEITH DYER: advertising inventory. Once customers have been Does into the loyalty the TR69 standard not recruited the adoption ofprogram, their behavior can address the through targeted coupons and be influencedmanagement issue, putting femtocells onto the that reward actions such as purchases, incentives same footing as other in-home broadband access devices? upgrades, downloads, customer referrals, new feature usage, and prompt bill payment, as well as providing JIM TAVARES: additional profiling information. An effective loyalty TR69 thus results in a higher there's a whole lot program is really a framework - value relationship for on top business implement if you both theof that toand its customers. want to really
be zero touch. The standards are really nascent, so
KEITH DYER: What revenue drivers influencemake that leaves a lot of work to do as a vendor to
sure you can deliver loyalty programmes?a truly zero touch deployment approach scale.
value, immediacy and emotional connection. This results KEITH for operators to demonstrate greater relevance in a need DYER: You through. Additionally, but how important and cutmention deployment, consumers often findwill ongoing management of femtocells be for carriers, pricing plans complex and hard to benchmark. once they have thousands of femtocells reward Traditional operator discounts and productdeployed? schemes can lack perceived value and have low JIM TAVARES: participation. The opportunity is to align loyalty That's exceptionally and rewards that are meaningful programmes with offers important. To take one example, in Think of this have got to best integrated to customers. the USA you as taking the have and most GPS to offers from requirements, and carriers also relevant meet e911 Groupon and similar rewards need to know where cells are to mobile consumers. If programmes and offering them because they may want to radiate implemented this can in certain locations, successfully on certain frequenciescreate fans whose or take steps to avoid interference with other femto loyalty and value goes beyond customer satisfaction, as or macro cells. So the means as they have trust inthat operator. well as GPS you also
need an integrated network listening capability to
STEPHEN UPSTONE: Operators use loyalty of But I should add that I think the adoption
standards is of course revenue, stimulate usage, and programmes to increasepositive, and both Cisco and Starent have been retention to reduce churn For strengthen customerleaders in standardization. of example Cisco was customers. The customer prepaid and postpaidan active member in the DSL Forum - now Broadband Forum program enables information captured through the - Working Group that developed TR-069. the operator to generate additional revenue by offering targeted, high-eCPM advertising opportunities, as well KEITH DYER: as by making its segmented customer base available to What other issues do you think operators face brands and agencies for the execution of their own in developing the femtocell market? loyalty programmes. As mobile markets mature, operators must work harder than ever to grow JIM TAVARES: revenue. To compete effectively for profitable voice I data services, its now essential to convince and would mention two areas. The first is that as with any that service or technology, there's an customers new the operator delivers value beyond just education issue. WiFi took a while for consumers to minutes and megabytes; undifferentiated services and understand what be vulnerable to what it operators bundles will alwaysit really was and another meant. So you've and similar learning curve with promotionsgot aunderstanding your customers and femtocell for consumers, strategic your retail their preference becomes aas well ascompetitive staff in stores or advantage. customer support agents on the phone.
ABOUT JIM TAVARES Jim Tavares is a Director for Strategy & Business Development in Cisco Services.
KEITHwhere a What are determining its interactions know DYER: cell is by loyalty programmes really
with the about? cells around it. Customers may also selfreport where the femto is when they buy the cell. So
STEPHEN to adjudicateWhile theyall thatin many you have UPSTONE: between come data, and
Mobile Europe | 17
SPONSORED INTERVIEW
KEITH DYER: Why did Orange Spain launch a loyalty
program? and unique SMS code. The login credentials are checked against the Velti mGage platform to check eligibility, thus allowing the subscriber to enter the site. By looking at the subscribers login credentials, our system determines what level of reward they are eligible for and displays only that content. The subscriber is then able to select the reward they want. A selection of Network and Physical rewards are offered. Recarga y Gana is very simple to understand and delivers a good subscriber experience with the additional business benefits of increased ARPU. There are no barriers to the program and all subscribers who are eligible can participate. Subscribers that do not want to be contacted for marketing will be excluded from the program and there is an opt out option available on the website to deliver a clean subscriber experience.
STEPHEN UPSTONE: Each program is different and KEITH DYER: How is the
program relevant to both the operator and its customers? there is always a balance between speed to market and strength of program in terms of channels and the data available to optimize the communication and rewards. To tailor the program to the unique needs and characteristics of the operator, its brand, and its customers, Velti begins with a thorough analysis of the operators customer base to understand existing customer behavior and trends to understand their top up value, frequency of top up, method, eligibility, tenure and tariffs. The analysis is used to build the program business rules into Veltis real time engine to ensure that the subscriber experience is delivering the relevant rewards, achieving successful redemption and relevant channels are being applied to drive subscriber communication and lifecycle. Based on the insights gained through this process, Velti can design every aspect of the loyalty program, from its creative look-and-feel and customer experience, to a multi-channel acquisition program; to incentives and prize drawings designed to encourage and reward subscriber participation. Velti can also work with partners to provide the website creative.
KEITH DYER: What is the consumer experience? STEPHEN UPSTONE: When a pre-pay subscriber topsup, they receive a text message from Orange informing them that they are eligible to redeem a reward. They are directed to a website and asked to enter their MSISDN
18 | Mobile Europe
SPONSORED INTERVIEW
However the targeting marketing can drive a lot of the value and with the right approach and knowledge web, operator communications and direct marketing can be very effective without TV advertising.
About Velti
Velti is a leading global provider of mobile marketing and advertising technology. We enable brands, advertising agencies, mobile operators and media companies to implement highly targeted, interactive and measurable campaigns by communicating with and engaging consumers via their mobile devices From large scale SMS competitions and loyalty programs, to providing subscribers with something new, different, and relevant to them via advertising opt-in campaigns, Veltis mGage platform does it all. With Velti, operators can even extend their marketing beyond mobile advertising to include mobile communities, social networks, and interactive entertainment. We have the ability to conduct campaigns in over 50 countries and reach 3.7 billion global consumers. In 2010, 825 brands, advertising agencies, mobile operators and media companies used our platform to conduct over 2,700 campaigns. 13 of the worlds 20 largest mobile operators have run campaigns with Velti. In Europe alone, current customers include Vodafone, Orange and T-Mobile.
KEITH DYER: How else can an operator running pre paid loyalty programmes use the platform to develop future benefits and revenues? STEPHEN UPSTONE: The loyalty program can easily
be extended into the Post paid customer segment. Post Pay loyalty programmes are similar to pre pay but instead of using top up triggers they use lifecycle triggers combined with transaction data in the engine to reward customers. Additionally other affinity marketing programmes can be run like the 1+1 coupon services that we run with Vodafone Greece. That is available to the whole customer base and allows customers to get a coupon to take a friend for free to the cinema, restaurants and leisure parks. This whole experience is delivered in a personalised manner to the custmer base. The same platform allows customers to run ARPU lift SMS games and competitions and drive other marketing objectives such as online sales or cross sell and up sell to tariffs and bundles. Velti has run over 100 campaigns with leading operators including running games with over 4 million players in MTS Russia and the first large scale games in the USA addressing T Mobile USAs 35 million+ customers. With the right opt in permission the operator can go beyond CRM and customer paid ARPU by implementing permission based advertising programmes that can help build loyalty and bring a new revenue stream for the operators from brands that would like to communicate offers the customer base. Velti has experience of
launching and running these types of programmes with Orange, Vodafone and other leading operators.
KEITH DYER:
Where is the market is headed next?
Mobile Europe | 19
????????
INSIGHT REPORT
increasingly marginalised role in a growing number of European markets. But is this a situation that the operator community can (or want to) resolve? Our research into mobile advertising in 2008 revealed that the then CEO at Vodafone, Arun Sarin, had identified three core revenue generators for the company: voice, data and advertising. This also revealed that Sarin had set an advertising revenue target for the Vodafone Group of 45 million in FY2008/2009. Jump forward to the present day, and it has been suggested that Vodafone Group made somewhere in the region of 13.8 million in 2010 (though please note this has not been substantiated). The mobile advertising market continues to lag commercial expectation. What are the implications of this slowerthan-expected rise in mobile advertising spend? As of March 31, 2011, Vodafone Group had 358 million registered subscribers, generating voice revenues of 30.76 billion, and data revenues of 5.77 billion.
On average, each subscriber is generating 85.92 in voice revenues per year (7.16 per month), and 16.12 in data revenues (1.34 per month). If the 13.8 million is indeed reflective of Vodafones mobile advertising revenues, then Vodafones subscribers are each generating Average Advertising Revenue Per User (AARPU) of 0.04 per year. This example is by no means meant to be disparaging towards Vodafone, merely, to highlight the fact mobile advertising remains little more than an accounting error for the majority of mobile operators. But then as a business, advertising and media is some distance away from their core business of communication. While the debate rages on about the mobile operators role within the mobile advertising value chain, it is worth considering whether they actually want to be involved in the first place? With an AARPU of 0.04 it paints an incredibly strong case against their involvement, for indeed the majority of mobile operators.
Nielsen). In theory, the marriage of these two industries is akin to the coming together of Hollywood A-listers Brad Pitt and Jennifer Aniston. Sadly, some unions just dont work as well they might. Consequently, the mobile advertising industry has developed significantly slower than originally projected the market should now be worth $7.83 billion according to the original forecasts from Informa back in 2006. In actual fact, it is considerably less.
MOBILE AD SPEND Total global advertising spend is expected to be worth around 347.8 billion in 2011. mobileSQUARED estimates that the global mobile advertising market in 2011 will be worth 2.96 billion, accounting for 0.85% of total global advertising spend. Mobile advertising then, remains largely inconsequential to the advertising community in the short-term, but will inevitably become hugely influential in the medium- to long-term.
INSIGHT REPORT
Figure 1: Total mobile ad spend, Europes Big Five, 2011-2014
Collectively, Europe is comparable to the US in terms of population, yet that is where the similarities end, especially if applied to mobile advertising where Europe considerably lags.
Presently, Japan remains the only billion Euro market, expected to generate 1.1 billion in 2011. The US is gaining rapidly on Japan in terms of spend, and will be worth 856 million in 2011, and will become the second Euro-billion market in 2012. China will become the third superpower in mobile advertising, generating revenues of 327.8 million this year, and is expected to become top 1 billion in 2015. Collectively, Europe is comparable to the US in terms of population, yet that is where the similarities end, especially if applied to mobile advertising where Europe considerably lags. Across Europes big five markets (France, Germany, Italy, Spain and the UK), mobile advertising will generate 152 million, or just 4% of total mobile advertising spend, in 2011. Approximately 35% of those revenues will be generated in the UK, followed by Italy accounting for 25%, France on 16%, Germany 14% and Spain 10%. Between 2011 and 2014, there is very little change in percentage share, with the UK, Italy and France each projected to drop 1% to account for the increased activity in Germany and Spain. By 2014, Europes Big
Five markets will generate healthy mobile advertising revenues of 632.3 million (see Figure 1). If we expand this figure to include the whole of Europe, the total mobile advertising market will be worth a little over 1 billion placing the European mobile advertising market approximately 2 years behind the US in terms of revenues.
2007 AVG COST PER CAMPAIGN CREATIVE AGENCY MEDIA AGENCY (PLANNER/BUYER) MEDIA SELLER/AGGREGATOR CONTENT PROVIDER TECHNOLOGY PROVIDER MOBILE OPERATOR TOTAL 19,500 11 9 18 12 20 30 100
INSIGHT REPORT
Mobile Advertising Value Chain 2008
into a more direct marketing concept. And with good reason... IMPACT ON REVENUES Mobile operator advertising revenues will increase in the short-term but diminish in the long term, forcing operators to evolve their existing internet-based advertising strategy. For example, across Europes Big Five markets, the total mobile display market will be worth 56 million in 2011, rising to 179.2 million in 2014 (Figure 2). Operators will continue to take a slice of the mobile banner revenues during the forecast period. Whats more the increase in total mobile banner ad spend between 2011-2014 will virtually offset the operators diminishing revenue share percentage. In the UK for example, mobileSQUARED estimates that mobile operators account for 25% of the total mobile display market in 2011 (Figure 3). That means, mobile operators will generate revenues of 5.4 million out of an overall market worth 21.6 million. Because of the increase in spend during the forecast period, operator banner ad revenues will peak at 5.8 million in 2012 before falling to 5.3 million in 2014, despite a decreasing stake in the value chain from 25% to 8%. Thereafter, mobileSQUARED projects a sustained decline in mobile banner ad revenues for operators in the UK. And its a similar tale across Europe (Figure 4), though the less advanced mobile advertising markets namely those with a lower smartphone penetration or where data costs remain high generally means that mobile operators can expect a larger operators hegemony challenged by the internet superpowers of Google and Yahoo!. This development remains true in 2011, with mobile operators now viewed as one of many consumer access points. Consequently, their value within mobile advertising has diminished. But there are those mobile operators, such as O2, that have confronted this issue head on, created a large in-house team, and looking to control the core components of the value chain. In doing so, they are ensuring are dominant position within the value chain. This, however, is being achieved because its advertising strategy is starting to morph
Figure 2: Europes Big Five Total Display Market
INSIGHT REPORT
Figure 3: UK mobile display forecasts
percentage of mobile display revenues. For instance, in Germany mobile operators will receive 36% of mobile display revenues in 2011. Even though this figure will fall to 18% by 2014, because of the immaturity of the market, this will result in a revenue increase from 3.4 million to 4.8 million by 2014. However, mobile banner revenues cannot be considered a long term revenue generator for mobile operators. As identified by the IAB UKs head of mobile, Jon Mew, operators continue to play a significant role in the display market and search. That will at least remain the case while featurephones remain mass market. mobileSQUARED projects smartphones to surpass featurephones in the UK in 3Q2012, with the remainder of Europes big four markets following suit within 12-18 months. There [operators] stake in the mobile display market will only go down, says Jon Mew, head of mobile at IAB UK. The only hope they have of maintaining any growth is using messaging and identifying other areas. He adds that the mobile and advertising industries are both too tough on digital, and too tough on mobile compared to other media. This is a valid point, which again returns to the key point that operators are not media companies.
A CHANGING LANDSCAPE
Mobile advertising is evolving beyond the internet-based shackles upon which it founded. The open internet has seen the declining appeal of the operator portal, and with it, the associated display and search advertising traffic, with players such as Google/Admob, InMobi, Smaato, Adfonic, 4th Screen, and YOC to name of a few of the key mobile ad networks serving the offportal, and in some cases, operator portal needs. The mobile advertising market is evolving because of two critical elements: consumer data and location. Crucially, it is information that every operator has in abundance, and now starting to apply to a mobile advertising strategy away from the mobile internet. The UK continues to be the flagbearer for Europe, and the market is being driven by O2. Earlier this quarter, O2 Media announced that it had over 3 million subscribers to its opt-in advertising service and was well on the way to 4 million. It also extended the opt-in concept with the recent launch of Priority Moments, a service designed to connect its mobile customers to British high-street brands via an app or mobile site, using location to serve relevant and timely offers and vouchers to users. Priority Moments builds on the success of O2s live music service, Priority Tickets, and a more recent location-based campaign for Fitness First which generated revenues of 400,000 for the gym chain. While O2 was successfully applying location-based advertising techniques to clients campaigns, Vodafone announced its decision to join the opt-in mobile advertising revolution and is believed to have selected a provider, but is yet to divulge whom. The company is intent on integrating its mobile advertising efforts with the m-wallet joint venture. Like Vodafone, 3 is on the verge of announcing a similar opt-in service provider, while T-Mobiles will join the party when the Blyk-run Orange Shots service is extended as part of the Everything Everywhere drive. Like O2, Orange is experiencing rapid opt-in success, having started the year with 400,000 subscribers and now has over 1 million, and looks set to surpass 2 million well before the year-end. Opt-in advertising is becoming the strategy of choice for the UK market, and with good reason. A survey of the UK Blyk members on Orange Shots revealed that 93% rated the service as OK or better, with half rating it as good or very good; 35% of respondents said that Blyk had improved their opinion of Orange. Blyk will be hoping similar statistics will be
Mobile Europe Insight Report | 23
????????
INSIGHT REPORT
released in the Netherlands, where it runs the opt-in service for Vodafone. Since its launch in May 2010, little data has been released apart from the fact that the response rate exceeds 25%, as is the case in the UK also. The response rate of over 25% has now become an internal thing, and if the response rate drops below that figure, we ask questions why, says Antti Ohrling, cofounder and UK CEO, Blyk. He believes that the hard opt-in model represents the fundamental difference with alternative mobile advertising models. But the level of response rate is open to interpretation. For instance, Hallmark ran a two-for-one Halloween card campaign in the UK delivering over 136,000 ads, generating an 8.2% click-through rate (totalling 11,152 clicks), with 2,573 vouchers downloaded, equating to a 23% CTR conversion or a total campaign conversion of 1.89%. However, Blyk does not reveal how many members actually responded opting to receive, or stop receiving, additional information on that particular campaign. Assuming the response rate of 25%, then approximately 34,000 responded in either the positive or the negative. Either way, that is significantly higher than all other forms of media, let alone other forms of mobile advertising. Based on such high response rates, Blyk claims that it can generate annualised ARPM (average revenue per member) upwards of 13 on a sustained basis. In comparison, Facebook generates APRU of between 0.53. In the Netherlands, Vodafone selected MADS as its mobile advertising sales network, a deal which was replicated in Greece. But the latter was a short-lived deal as Out There Media took over Vodafones entire Greek mobile ad operation. And Out There Media followed this deal by collaborating with Cosmote in July. Not wanting to be excluded, Orascom invested 6.89 million for a minority investment in MyScreen to orchestrate a permission- and incentive-based advertising model that compensates users with rewards for allowing targeted advertisements to appear at the end of a call in a variety of formats to the operators 18 million subscribers, which includes both Wind Greece and Wind Italy. Wind Italy has also worked with Upstream on a promotion for Wind called VIP SMS to
24 | Mobile Europe Insight Report
generate revenues and an opt-in database from Winds subscriber base. Wind now has an opt-in database exceeding 2.5 million. A permission-based advertising program was also launched in June when Velti signed a strategic three-year partnership agreement with Vodafone Portugal. The Vodafone Promo4U service enables subscribing customers to receive high-value discounts
Mobile advertising is a media property development, and operators are not good at doing that. Where they can excel is in mobile marketing.
and exclusive offers from their favourite brands free of charge on their mobile phones. Examples of mobile advertising activity across Europe are rife, with operators either opting to pursue an in-house strategy such as O2, or outsource externally to companies such as Velti and 4th Screen. Clearly, mobile operators remain active in the mobile advertising ecosystem, though their role is evolving. The mobile industry is clearly split on the role of the mobile operators within mobile advertising. KF Lai, CEO of Buzzcity, goes straight for the jugular and says operators do not make good media companies, and are therefore not adept at mobile advertising. Operators are not good at launching and maintaining media properties, he says. Mobile advertising is a media property development, and operators are not good at doing that. Where they can excel is in mobile marketing, such as opt-in messaging. An alternative view is that operators have a significant role to play in the mobile advertising value chain, but are now exploring a range of go-to-market strategies. One example is a dramatically increased willingness to forge partnerships or to opt for small, lean technical solutions that are ready for just a few new use cases but are able to scale later if successful, says Dietmar Maierhfer, senior specialist, mobile advertising at Nokia Siemens Networks. Both ways open up strong opportunities and the required flexibility to play a significant role in the ad business.
NSN is clearly identifying a risk-averse strategy for operators in their approach to mobile advertising: either partner and limit investment, or start small with the potential to scale if required. Both suggestions imply an immature market and operator uncertainty, which is understandable given the way operators are becoming peripheral to mobile internet-based advertising models. Operators were big in the area of display advertising through their portals until the walled gardens opened up, and they had to find other ways to play in the advertising space, says Dan Cuffley, director of sales for Europe at Velti. Operators are sitting on a mountain of customer data so they are looking for ways to harness this data. An operators biggest opportunity in this area is by providing access to their base of customers. This can be through operator permission-based advertising programs as well as passing through information to the advertisers. Carl Uminski, COO at Somo Agency, believes operators have made a number of mistakes but should now focus on their core areas. Where theyve really messed up is SMS billing, he says. What are they doing charging 30-40% commission for a transaction of no more than 10? Ideally they should be looking at transactions of up to 100 and charging 3-4% commission and Apple needs to wake up to that as well. Mobile has to move away from the microtransactions, and look at the macro market, as that is where the commerce is. Uminski says operators have got the bank account and contact details of their customers, and most importantly their trust, so they must look at a proposition around this. For me it has to be payments, and not mobile advertising. Regardless, if progress in mobile advertising is already protracted, the addition of mobile operators to the mixer only delays proceedings further. It has taken 10 years for the GSM Association to encourage the UK mobile operators to agree to sharing data anonymously to create the Mobile Media Metrics service delivered in association with comScore to drive the planning, understanding and execution of mobile advertising campaigns. (Other data is available, including mobileSQUAREDs own Mobile Consumer Trends.) Similar discussions between other markets for similar metrics remain ongoing, with very little movement of note to date.
INSIGHT REPORT
Virtually every mobile operator is turning its attention towards m-commerce. This presents something of a fundamental shift in mindset by the operators...
INSIGHT REPORT
too. Combined with a profile /opt-in portal CSPs can provide a single point of control which allows for transparency and gives subscribers control over their own profile data. This is a clear differentiator for CSPs in a world where privacy is becoming increasingly important. This differentiator, when combined with location, can deliver an incredibly powerful permission marketing service to the mobile operators clients. As already highlighted, operators across Europe are now adopting this form of marketing (though some refer to it as advertising: advertising is the glamourous subset of marketing after all). To this end, it is location that will provide the final piece of the contextualised jigsaw on mobile, and provide brands and businesses with the capability to drive footfall into their outlets or restaurants, for example, and deliver a very strong return on investment, as demonstrated by O2s campaign for Fitness First. To this end, it is location that will provide the final piece of the contextualised jigsaw on mobile, and provide brands and businesses with the capability to drive footfall into their outlets or restaurants, for example, and deliver a very strong return on investment, as demonstrated by O2s campaign for Fitness First. However, mobileSQUARED believes it will be incumbent on the mobile operators to promote the development of location. A demonstrated in the UK during the backend of 2010, the major retail brands are yet to grasp the concept of mobile, despite the availability of location-based advertising that can potentially drive footfall. The survey of the UKs 30 most important retail brands mobile strategy revealed that only two have their site optimised for a mobile experience, while eight of the retail brands had developed iPhone store finder apps. Tesco has developed four iPhone apps Clubcard, Finder, Wine Finder and WhatDidl but was yet to cater for the 75% of non-iPhone browsers. Mobile is about the now, and about influencing behaviour close to the point of purchase, says Brad Liebmann, CEO of Geocast. He claims that retailers want an extension of their storefront, which he describes as thousands of sandwich boards outside their premises. Thats what these devices are, he adds. These are the sandwich board of today. Drive the customers to
cross-sell and upsell data bundles, subscriptions, device upgrades for example via these mobile communications is believed to be a 27.63 billion global market in 2011. Because operators use SMS, USSD or cell broadcast to disseminate the communications and promotions, there is no cost attached. However, this form of marketing has generally been outsourced to a third-party, whom will receive commission based on the incremental sale. If we assume that commission is 20%, then this kickback to the third-party provider can be considered the cost to the operator. Therefore, with the global incremental sales market valued at 27.63 billion, mobile operators are spending 5.53 billion on this stealth form of mobile marketing. Across 17 markets in Europe, operators are expected to send 25.6 million communicative messages in 2011 to their
26 | Mobile Europe Insight Report
subscriber base. Based on the incremental revenues, that will cost the operators $1.02 billion in 2011. In addition, it is a very simple value chain, in which the operator controls 80% of the value (see figures 5 & 6). This method of communicating can be deemed opt-out marketing, but can also be used effectively to drive an operators opt-in database, or permission marketing, which is where mobileSQUARED believes offers the biggest opportunity for mobile operators in the marketing (and advertising) domain. CSPs [operators] are increasingly developing consolidated databases to allow a single view of their customer data, as well as a profiling strategy to support churn prediction and to tailor their marketing campaigns, says Nokia Siemens Networks Maierhfer. These powerful systems comprising a cornucopia of network data can easily be used for targeted advertising
INSIGHT REPORT
the store, and help them get there. One operator that is now driving that concept is O2. As already highlighted earlier in this report, O2 launched what it called a supercharged version of its Priority Tickets service in July, complimenting the existing scheme which turned them into the UKs biggest sellers of gig and event tickets. They have now extended this into the retail environment through O2 Priority Moments, utilising its consumer data, opt-ins, and location. The multi-million pound investment by O2 will see Priority Moments serving location-based money saving offers direct to the phones of its 22 mobile customers that can access the service via an app or a mobile site using a GPS-enabled device. The service has already received support from brands such as Yo! Sushi, French Connection, Toni & Guy, Chocolat, Essensuals, National Express, Fitness First, Viagogo and JJB Sports. We have applied lessons from Priority Tickets to Prioirity Moments and supercharged it to appeal to all of our customers, not just music lovers, says Head of brand at O2, Shadi Halliwell. The main driver is, I want the voucher, I want it now. The customer will be served offers based on his/her location, but as yet there is no search function, only a way to prioritise favourite types of offers so they appear at the top of the feed. However, the app will develop over time, eventually including some kind of push notification based on customer preferences and newly available offers. During the launch period there will be more than 40 offers from 30 brands for use in over 3,500 stores nationwide, but the initial four gold brands of Zizzi, WHSmith, Odeon and Harvey Nichols have signed bigger deals with O2 to be elevated to the front of the TV advertising campaign. O2 says the O2 media team have been absolutely instrumental in delivering and doing those deals and talking to the partners, so theyre very much part of Priority Moments. The primary reason were doing this is to drive loyalty, engagement and satisfaction. There is a contract between all of the partners that we work with. Where brands are giving us extra special deals and exclusive offers, we wont be charging them to take part in Priority Moments. Where a deal is non-exclusive the brand will pay to be included. We have 22 million customers in the UK and we hope this will help those partners reach their own objectives. The challenge now facing the mobile industry, is to highlight the value of location to consumers. This is where mobileSQUARED believes the operators will play a critical role, by applying their wealth of consumer data, including location, to deliver relevant and contextual marketing campaigns. Subsequently, this will educate their mobile customers about the merit of using their location beneficially, and will have a positive knock-on effect for the mobile advertising industry. For instance, research by Navteq has shown that 31% of consumers seeing a specific mobile ad went on to visit a store location. And of those, more importantly, 53% said they did directly because of the ad.
CONCLUSION
mobileSQUARED believes the long-term opportunity for mobile operators is marketing and commerce, while playing an indirect role as an enabler for the mobile advertising ecosystem. In particular, permission marketing allows operators to capitalise on their consumer data and profiling, which can be further enhanced by location data. For this reason, operators are more suited to marketing practices than advertising. While the research has identified that consumers will not accept more than a limited amount of operator communications per month, mobileSQUARED research has revealed that consumers will accept multiple communications per month from a brand, or brands, of their choice. Once the consumer has opted in, it is essential that this relationship is developed, and the operators are ideally placed to drive this opportunity. The permission element therefore, creates a virtuous cycle of communication between the brand and the consumer, with the brand encouraging engagement and interaction with
the consumer on an ongoing basis. This level of communications must be reflected in the value chain, which can no longer be viewed in a linear format. Anyone component, or all, can potentially harness these new and
emerging relationships between brands and consumers. It is critical that the players in the ecosystem ensure that this level of communication is maintained on a consistent basis.
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SPONSORED FEATURE
INTERACTIVE SMS - THE TIME HAS COME A TECHNOLOGY WHOSE NEXT GENERATION MOBILE-CRMfor Strategy & Business Development in Cisco Services. Keith Dyer Jim Tavares is a Director CHANNEL
Caroline Doussot, Head of Mobile Marketing, Gemalto, on mobiles most effective channel.
Due to its low cost, universal access and KEITH DYER: interoperability course devices and mobile networks, Jim, Cisco of across is represented in the femtocell SMS is the most its MicroCell device, which is to market through effective way for consumers most communicate with each other. Theseservice.factors notably supporting AT&T's femtocell same Why do are also enabling businesses, includingcarrier needs you think Cisco is well-placed to meet government departments, deployment? for femtocell banks, financial institutions, consumer brands, retailers and transport providers, to better communicate with target demographics. A recent JIM TAVARES: report are Informa Telecoms and market stated that We by very excited about the Media because we SMS should not be so many keyas a core servicehave believe it leverages overlooked capabilities we for mobile users asFirst, there is thesignificant source of as a company. it will remain a long tradition of revenues and traffic deliver carrier-grade CPE a global Scientific Atlanta to for mobile operators on into the basis until atof course there is our position within rise home. And least 2015. Revenues are forecast to to $136.9 billion by 2015 with globalbeen traffic network infrastructure - that has only SMS increasing from five trillion in 2010 to a staggering strengthened by the Starent acquisition. Femtocell 8.7 trillion by 2015. plays to both segments, and our strength in both Despite mean we have the potential to support segments the fast adoption of smartphones, SMS is still the preferred communication channel amongst massive growth in the mobile industry. consumers. A study from Deloitte providethat the Importantly, we believe we can found the end-tomajority (90 percent) of smartphone users send at the end femtocell infrastructure as one company, from least one text messageback-end compared toside. 40 radio front end to the per day provisioning just percent, who usewith a handsets to access social We've partnered their best-in-class provider in networks including Twitter piece, as that is not a ip.access to provide the RF and Facebook. The continued popularity of Of course, everyone traditional solution area for us. SMS amongst smartphone users also creates an ideal opportunity tends to think about the radio side, but the for businesses seekingimpact as well. as an advertising provisioning side will to use mobile Unless consumer platform. A spokesperson is zero touch then there's no deployment of femtocells from comScore said recently that can scale - and we have the experience to way carriers mobile ads are twice as effective with smartphone whole integrated provisioning process. provide the users. Businesses are finally waking up to the many benefits of mobile messaging marketing. Consumer KEITH DYER:
By better understanding consumers needs, interests and preferences, operators can significantly boost revenues through highly targeted campaigns, up-selling, cross-selling, location-based offers, or even coupons from other brands
acceptance is also increasing butahow important will You mention deployment, as result of more desirable management of femtocells be for carriers, ongoing incentives offered by operators and brands. Each of these factors suggests that mainstream once they have thousands of femtocells deployed? uptake will take place sooner than we expect. For businesses JIM TAVARES:there are several benefits for adoption: That's exceptionally important. To take one G Reach: SMS delivers total real reach to all handset example, in the USA you have got to have integrated regardless e911 brand or model GPS to meet of the requirements, and carriers also G Direct-marketing capability:because they may want need to know where cells are It provides an toopportunitycertain frequencies in certain locations, radiate on for mobile operators and brands to
mobile marketing enables organisations to tailor macro cells. So that means as well as GPS campaigns according to individuals preferences you also need an integrated network listening which improves where a cell is by determining its capability to know relevance and acceptance rates. The ease with the cells around it. Customers interactionsin which customers can opt-out is may another advantage. Customers when they buy also self-report where the femto is can step out at anytime, you have to adjudicate between all that the cell. So automatically cleaning the database and therefore increasing data, and that's hard work. acceptance rates. When you are a carrier deploying thousands of G Standardised metrics: SMS is a mature model with accurate and standardised metrics already macrocells, element management is fundamentally in place different from supporting tens or hundreds of So what of femtocells. You still have all provides thousands does this tell us? Mobile-CRM the rich pickings for 3G macrocell but the scale is one to complexity of a mobile operators. By better understandingmagnitude larger. The problem carriers two orders of consumers needs, interests and preferences, operators can boost their service all need to solve is to have one platform managing revenues through highly targeted deals, up-selling of this. Once again this plays to our heritage of or cross-selling offers, location-basedclass CPE or supporting tens of millions of carrier services even coupons from other brands. The targeted devices. nature of mobile-CRM also provides cost savings by enabling DYER: KEITH operators to send only relevant offers to interested subscribers, creating a standard not Does the adoption of the TR69 higher success rate. Thethe management issue, putting femtocells address trade-off is clear from the beginning, organisations can customise services and offers to onto the same footing as other in-home broadband suit specific customer needs and in return, access devices? customers benefit from useful deals. The question now is how can operators capture JIM TAVARES: this data? really a framework - there's a whole lot on TR69 is To address implement if Gemalto created top of that tothis challenge,you want to really be
28 | Mobile Europe
SPONSORED FEATURE
Interactive SMS, standards operators nascent, develop zero touch. The enabling are really to truly so that a one-to-one relationship with vendor to make sure leaves a lot of work to do as a consumers. Upon activation the user will zero touch deployment which you can deliver a truly receive a text message will require a single click to reply, making it the ideal approach scale.
One of our European customers achieved a 12 per cent acceptance rate when using Interactive SMS to promote its new electronic invoice service. This was six times greater than the acceptance rate achieved from the same campaign delivered via standard SMS
solution should add that I think the adoption of But I for the recruitment for loyalty programmes. With a unique design includingand both Cisco and standards is of course positive, open questions and multiplehave been leaders in standardization. For Starent choice menus, Interactive SMS is also a great channel for conductingmember in the amongst example Cisco was an active quick surveys DSL consumers onBroadband Forum - Working Group that Forum - now the go. Moreover, it provides businesses with the opportunity to engage in a developed TR-069. simple dialogue with subscribers, yet at the same time providing them with complete autonomy over KEITH DYER: theWhat other issues do receive. Gemaltos Interactive types of offers they you think operators face in SMS is compatible with all handset models including developing the femtocell market? basic SMS phones, as well as Apples iPad so that users TAVARES: JIM can easily top-up prepaid internet connectivity. Gemaltomention two areas. The first is that to with I would also offers full-marketing services as operators. Theseor technology, there's an education any new service encompass access to business intelligencetook a and regional expert teams issue. WiFi tools while for consumers to understand dedicated to delivering best-in-class commercial and what it really was and what it meant. So you've got a
marketing services. Aswithoption, operators can similar learning curve an femtocell for consumers, monetize their highly qualified database with as well as your retail staff in stores or customer other brands direct marketing. In the future support agents on the phone. Gemalto may also bringsneed to be very clear Another factor carriers brands on board thanks to its ad-salesfemtocell is challenging typical carrier about is that services. Results speak for themselves. A to subsidising business models. Carriers are usedGemalto customer that executed a mobile marketing CPE for marketing reasons - not in order to campaigncapex reductions by used Interactive SMS generate in Europe recently driving traffic off to promote its new e-invoice service. Acceptance network. So the return on that subsidy is driven by rate was 12 per cent, six times more than a different metrics from their usual model. previous campaign delivered via standard SMS. That leads to another issue, which is that Another mobile campaign in Asia, promoting femtocell crosses classes of organisational structure sports news, received a response rate of 7.7 per within a carrier. It touches the operations team, cent compared monitoring cent assurance, as well as marketing and to 0.2 per and when delivered via standard SMS. and retail. That's a new paradigm customer service Latin American customer received an toAget their head around. acceptance rate of approximately 30 per cent on But I would also like to say that I actually think its firsthas been great progresscent on its second, there campaign and 35 per in many of these and proving that users were so satisfied there the service other key areas. Most importantly, with is a clear they agreed to participate again. supply chain forming - from chipset providers to
CAROLINE DOUSSOT is Head of Mobile Marketing, Gemalto. Since 2002, Caroline has held several strategic marketing positions within Gemaltos Telecom business unit in Europe and Latin America. Prior to joining the company, she gained extensive experience working for a leading marketing consultancy in Paris. www.gemalto.com
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http://gtube.gemalto.c om m l c
SPONSORED INTERVIEW
Keith Dyer spoke to Phillip Clement, of bemoko, about the opportunities for brands and publishers in going mobile, and of the role of the mobile operator.
KEITH DYER:
KEITH DYER: Phillip, this Insight Report is assessing the move to Jim, Cisco of course and advertising.the someone mobile marketing is represented in As femtocell who works in the heart of that industry, would market through its MicroCell device, which is most you say mobile is now totally mainstream in do notably supporting AT&T's femtocell service. Why web/marketing/online? How would carrier needs you think Cisco is well-placed to meet you characterise the state of the mobile internet and for femtocell deployment? where do you see further opportunities for the use of mobile? JIM TAVARES:
We are very excited about the market because we
Developers have become lazy they dont give a thought to page weight or mobile bandwidth, so operators need to endorse best practices, and promote the use of web frameworks like bemokoLive that deliver websites that are optimised for mobile.
KEITH DYER:
tens of millions of carrier class CPE
devices. In what circumstances should content owners consider an app and/or mobile internet site. Are both approaches necessary? KEITH DYER: Does the adoption of the TR69 standard not
KEITH DYER: you have to adjudicate between all that data, and
that's hard work.advantages of a mobile strategy in What are the terms of you are scale and responsiveness? Do these When reach, a carrier deploying thousands of
30 | Mobile Europe
SPONSORED INTERVIEW
I gave up trying to predict mobile device and OS penetration years ago! Android is doing pretty well and so is Blackberry right now, but Im sure Apple will release some new phone on a ridiculous tariff with one of the operators in order to gain back some market share. Whatever the landscape will be, one thing is for mention noneareas. The first iscontrol over I would certain; two of us have any that as with it new service or its futile trying to predict or any so in my view technology, there's an education manage campaigns based on mobile penetration. No issue. WiFi took a while for consumers to understand one would run a campaign or meant. So you've got a what it really was and what it write a website based on which PC manufacturer femtocell for consumers, as similar learning curve with is number one. Or run a TV ad campaign aimedin stores orbecause they are well as your retail staff at LG TVs customer support the top on the phone. Why? Because it doesnt agents selling brand. matter! So how cool would it be for us allclear about Another factor carriers need to be very if mobile handset or operating system figures were of no is that femtocell is challenging typical carrier business relevance? What if brands to subsidising CPE for - all models. Carriers are used could just do mobile devices, tablets, smartphoneseverything allcapex marketing reasons - not in order to generate in one place? Strangely, thats whatoff network. So the return reductions by driving traffic bemoko does.
on that subsidy is driven by different metrics from their usual model. KEITH DYER: That role to you see for which operators Whatleads doanother issue,mobile is that femtocell within mobile of organisational structure within a crosses classes marketing? Could operators take more ofItatouches the operations team, go mobile, lead in helping businesses marketing and carrier. extracting benefits from mobile sites/apps/ service monitoring and assurance, as well as customer customer interaction? Does bemoko have any and retail. That's a new paradigm to get their head direct or indirect relationships with mobile around. operators? But I would also like to say that I actually think there has been great progress in many of these and other key areas. Most importantly, there is a clear PHILLIP CLEMENT: supplythe M25 [Londons orbital motorway], which Like chain forming - from chipset providers to radio experiences congestion end-to-endhuge popularity, software providers and due to its system providers. mobile browsing will start to put a strain on the With any new supply chain it takes a while for every operators ability to cope, speedsplace, and up, and piece at every level to drop into will slow you will costsinevitable Rather than leaving it up to the been get will rise. interoperability issues, but there's operators to deliver more bandwidth and customers great progress. to put up with slow speeds and high data charges, developers need to take responsibility for their code, KEITH DYER: and the about issues around price?sites. But this feeling How way that they build their There was a is a big educationwould have to hit a certain become lazy that vendors process. Developers have price point in they dont give ato be viable. page weight or order for femtocell thought to mobile bandwidth, so operators need to endorse best practices, and promote the use of web JIM TAVARE: frameworks like that this is a nascent market and not I understand bemokoLive that deliver websites that all that sophisticated, so price is something people yet are optimised for mobile. can get their hands on initially. But over time, KEITH DYER: to the benefits of being able to attention will turn operate atPhillip, can you give us some touch Finally, large scale, with reliable, zero background toI bemokoonwhat areas yourorder to deployment. If save $5 a component in company works in and your place in the mobile meet some arbitrary price point, but then have to marketing value chain? - then have I saved any spend $50 on support calls money? PHILLIP CLEMENT: I also think price is impacted by operators' own priorities becomeaesthetics,by tablets and As PCs around replaced and physical integration. smartphones, all organisations will have the need this Some carriers are very interested in aesthetics, as to targetitem that will be going into people's homes. is an a wide range of different devices, operating systems are thinking about enable that, our a WiFi Others and browsers. To how to combine
bemokoLive web framework comprises a highly carrier is very different and you have to take that powerful suite ofwell. that form the foundation of into account as tools new andDYER: KEITH innovative multi-channel services. We work with global brands, systems integrators, do Stepping away from operator concerns - what content providers, ERP/E-commerce and media you think will drive consumer adoption of agencies who use bemokoLive at the heart of their femtocells? mobile web and applications strategy. bemokoLive removes the burden of supporting JIM TAVARES: theI wideningsimply offact that devices such mobility think it's array a mobile wireless and as tablets and more important than it was a few years is so much smartphones, games consoles and internethow with centralised management - all ago to TV people live their lives. What we're devices and services are supported and managed in finding is that traditional view of how to build one place, reducingthat lifestyle need is becoming a network to support management overhead and increasingIn Europe, for example, UMTS is at 2.4GHz problem. market reach. Delivering complex campaigns construction is often of cement and steel. and home that play to the strengths of feature-rich devices RF achieved with complete it is in 2G.to So the is propagation is not what freedom interface with related platforms such busy hour on a Another example is that the whole as payment services, e-commerceIt's moving back later into the network is changing. and m-commerce systems, GPS, mapping and come home and then use their evening, as people social networking.
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Progressive download is used by most web sites on the Internet (including YouTube). It downloads a video file at the fastest rate that can be supported by the network. Once the mobile device has enough of the file in its buffer, it begins to play the video. There is no correlation between the download speed and the playback speed. PD counts on a deep buffer in the client device to handle any changes in network performance. Such changes are very common in a mobile environment where radio performance will typically drop way off as the user gets near the edge of a cell and pick up as the user gets closer to the cell center (i.e. the base station). A different approach, adaptive streaming (AS), is starting to replace progressive download at many Internet sites. With AS, chunks of content, usually representing a few seconds worth of video and audio, are streamed one by one to the mobile device. When the mobile device is ready, it will request the next chunk. If network conditions change as the user moves around, the client can request that the next chunk be downloaded at a lower or higher bit-rate. Adaptive streaming videos are stored on the origin server using a number of alternate encodings, at a variety of different bit-rates to handle a variety of different network conditions. Streaming at a different bit-rate provides very much the same function as pre-filling a large playback buffer in PD, but in a much more bandwidth efficient way.
COMPRESSION
The primary method for optimising progressive download traffic is to compress it. There are several ways to compress PD traffic. The most popular is content-aware compression, where the algorithm takes advantage of the way the human brain processes video and removes data that would not be noticed. This technique can consistently compress traffic by about 30 percent with almost no impact on the user experience. Higher compression ratios are also possible, but that becomes more noticeable. Even then, compression offers a superior user experience compared to videos freezing and stuttering during times of congestion.
Steve Hratko is Marketing Manager for Mobility Products, Juniper Networks. Contact: shratko@juniper.net
The sheer volume and growth of video traffic is straining mobile operators networks to their breaking point making it difficult to deliver video with the quality that users expect.
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JUST-IN-TIME DELIVERY
Another technique that can be used to optimise PD content is just-in-time delivery (JIT). Unlike compression, this is a lossless technique. JIT can also be thought of as buffer management. Instead of allowing the mobile device to download a large PD file and then start the playback function, content is metered out slowly so the mobile devices buffer only has just enough data to enable smooth playback. The reason this approach provides savings is that most Internet videos are not viewed to completion. If the user abandons a video after a few 10s of seconds, all of the data left in the devices playback buffer is wasted. With JIT delivery, the size of the playback buffer is carefully managed to minimize this waste. Of course the downside to JIT is that, in case of sudden degradation of bandwidth, the buffer will empty and playback quality will suffer....
CACHING
Certain videos can become very popular and sweep across the Internet. In this scenario, it makes great sense to cache these videos locally in an optimised format. Then all future users who wish to access the video will get a much quicker download than if it were necessary to fetch it from the origin server. In the case of PD streaming, these videos would be cached in an alreadycompressed format. In the case of adaptive streaming,
With mobile video optimisation, the end result for subscribers will be a high quality user experience, while service providers are able to defer investments in additional RAN infrastructure potentially resulting in a return on investment of nine months or fewer.
MANIFEST OPTIMISATION
As part of the setup procedure for Adaptive Streaming (AS) videos, the origin server will send the mobile device a manifest that lists all the bit-rates that can be supported when streaming that video. The mobile device selects one of the offered bit-rates and the process begins. The tendency is for the mobile device to select the fastest bit-rate that it can handle, but this may not be in the best interest of the mobile operator. One technique to control this process is to modify the manifest so that the mobile device never sees the higher bit-rate options. If the choices are 100 kbps, 200 kbps, 500 kbps, and 1 Mbps it might be in the operators best interest to remove the two higher speeds from the manifest and let the device pick from either 100 kbps or 200 kbps. Smartphones do not need more than 100kbps, but if you are viewing a video on a high-end laptop with wireless dongle, then the video quality will be lower than optimal.
multiple low-bit-rate versions would be brought down from the origin server and cached. DRM-encoded content (Digital Rights Management) should not be cached and would always need to be fetched from the origin server. When using a cache, it is always necessary to check with the origin server each time there is a cache hit to make sure the content is still valid (hasnt been pulled for copyright reasons) and so the origin server can keep count on how often a video is accessed.
CONCLUSION
Video optimisation is most appropriate when used for congestion management. The goal for service providers is to maximise the return on their RAN investment, while at the same time keeping users happy. A compelling user experience is only possible if congestion can be avoided either by video optimisation or by increasing RAN capacity. With a properly-designed video optimisation toolkit, it is possible to perform optimisation only in those parts of the network where its really needed. A single, centralised optimisation function can thus avoid or mitigate congestion across an extensive RAN footprint. While some forms of optimisation may result in reduced video resolution, in most cases users wont notice certainly compared with not doing any optimisation at all! The end result for subscribers will be a high quality user experience, while service providers are able to defer investments in additional RAN infrastructure potentially resulting in a return on investment (ROI) of nine months or fewer.
Gijs van Kersen is Marketing Manager for Mobile Solutions, Juniper Networks, in the EMEA region. Contact: gvankersen@juniper.net
TRAFFIC SHAPING
Once the flow is under way, the manifest cant help with further modifications of AS content. In that scenario traffic shaping comes into play. In traffic shaping the network will slow the flow down to the rate that it can handle and this will encourage the mobile device to select a lower bit-rate from the origin server. While video quality may be somewhat impacted (especially for PD), this is better overall than allowing the congestion to continue.
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Policy Management
olicy Management, or at least the application of policy management enable features, is changing. Forecasts from ABI Research claim that the market for policy management servers in mobile broadband networks will grow from approximately $350 million in 2010 to almost $1.6 billion by 2016. Most importantly, there are clear signs that policy has moved from being an enforcer or caps and limits to something that enhances the revenue streams of mobile operators themselves. Although the policy element vendors have a clear interest in talking up this sector, the analysts tend to agree that policy control does lend itself to a key strategic role within mobile operators networks. In most businesses, a big increase in demand for your products and services would be considered a good thing, says ABI principal analyst Jim Eller. Instead of trying to block or throttle data traffic, mobile operators need to figure out how they can profit from the huge opportunity that has fallen into their laps. With worldwide data traffic volume growing at a CAGR of more than 50% annually, trillions of dollars in data revenues are at stake. Policy is more than just bandwidth management, adds practice director Aditya Kaul. Policy is also about quality assurance, flexible tariff plans, and creating new revenue streams. Randy Fuller, Director of Strategic Marketing at
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Policy Management
bandwidth caps, particularly those distributed across multiple device or network types. When integrated with charging, policy control also enables operators to go beyond tiers and offer more real-time, flexible pricing models, such as offering variable pricing based on time of day or the subscribers location, or charging for a bandwidth boost during peak usage hours for certain services. So is there a growing momentum behind using policy to drive new revenues, and if so, what are the revenues that operators are chasing? Jonathan Downey, Director Product Marketing, Openet, says that a lot of the excitement around policy management is indeed driven by the potential to increase revenues. One way operators hope to do this is by better aligning subscriber data usage with revenues, using tiers of data usage and bandwidth speed. With the advent of LTE, this segmentation of data offerings is core to many operators strategy to monetise their 4G networks. Policys role as a revenue engine is cemented when it is combined with Charging. Making policy decisions based on network resources and subscriber entitlements lacks important context. Giving subscribers the option to purchase data services in real-time, along with providing information about pricing, subscriber usage, and balances, provides strong monetization opportunities. For example, Downet continues, we have customers who by coordinating Policy with Charging offer promotions in real-time, based on what a customer is actually doing, for example allowing them to make an upsell offer to sell a service pass, or to allow a customer to purchase an extention to a fair usage limit. Christian Gayda, Head of Product Line Management Policy Control, Nokia Siemens Networks, concurs that policy management today has dual objectives give the subscriber the experience they expect and allow operators to regain some of the lost profit. But he cautions that Policy must also be seen as part of the overall customer experience. Policy controls allow tiered services with different quality of service which are adapted to users needs and price expectations, he says. Another example is to allow policies to be controlled by the subscriber directly for instance using a handset application and enable users to upgrade, downgrade, tap into congestion peak banks, change setting etc. Certainly this shift in policy seems to have benefited Nokia Siemens Networks, which has seen significant growth in its policy management business. Gayda says that its customer base has increased by 550% during the last year and he sees this trend continuing in 2011. So what examples of new service offers could policy enable. Its all very well talking n general terms, but what of the specifics? Downey says that operators are looking to policy
management to differentiate their services, by adding value to the user experience. Policy-based controls such as notifications, bill shock / roaming controls, parental and content controls, URL filtering, and time-of-day restrictions shape the customer experience, especially when these can be configured and controlled by subscribers.
Service differentiation
Policy Management also makes it possible for operators to differentiate their own premium services, such as mobile TV, by making sure that their premium services are not counted against a customers data quota. Also instead of selling all-included data access, wireless operators are looking at new data plan propositions on top of the traditional data access model: reflecting the fact that not everyone wants to commit to a 2 year contract for data access. Weve worked with several Tier-1 operators to deliver service passes, also known as day passes. These make for a compelling service offering for customers who want a more flexible billing arrangement, and in addition, given the limited commitment, they also appeal to nonsubscribers, says Downey. Service passes represent an opportunity to go beyond vanilla data access, giving the potential to introduce highly segmented offers, supporting different charging models for access. This was central to a leading North American operators roll-out of its iPad offering, enabling it to sell data access by volume of data usage and duration; thus meeting demand for flexible, personalized service offerings. Thats a model that Gayda recognises too. One of our customers introduced the Turbo Button in addition to Fair Usage Policy, he states. With this business model, end users have flat rate tariffs that are sufficient for regular usage. Pushing the Turbo Button allows subscribers to expand the available bandwidth for a specific application such as video-on-demand. This approach allows end-users to stay with low flat rate tariffs for daily usage, while they can purchase advanced network services for specific applications if needed. For One of our customers the CSP, the Turbo Button option introduced the Turbo Button in means additional revenue on top of flat rates. This is a good example how addition to Fair Usage Policy. For increased customer experience and the CSP, the Turbo Button option personalisation provides additional means additional revenue on top of profit. Policy also lies at the heart of the flat rates. This is a good example differing ways operators can react to how increased customer experience macro market conditions. Tekelecs and personalisation provides Randy Fuller comments on the different situations being faced by additional profit operators in Poland and Austria. (Continued, Page 38)
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Policy Management
run he expects to see policy control in the security area, defining and taking decisions on security policy depending on network and environment conditions. Policy management will also be linked with Cloud computing, Gayda adds. CSPs can use external server farms to be able to temporarily assign external computing capacities. The policy control server is used to decide where to get additional capacities for peak situations. From a revenue generation perspective CSPs need to ensure they continuously create interesting promotions and offers using real-time policy. We are probably going to see service-based revenue coming from an entire ecosystem of partners and advertisers as well as subscribers similar to what we are currently seeing with the use of the Internet. Downey agrees that we will continue to see the integration of Policy and Charging evolve. Keep an eye out for work being done by the 3GPP on the proposed new Sy reference point between the OCS and PCRF, he says. This will manifest itself in a more joined-up proposition from operators. We have already seen some policy and charging capabilities being exposed to subscribers. In Openet we see this trend accelerating, to the point where customers will interact with, and be able to configure, view, control and purchase services communicating the value of the heretofore invisible services of the telecommunication companies. Another aspect of policy will be influenced by the way operators are slowly beginning to establish revenuegenerating partnerships with third party providers of content, applications, services and devices. We will start to see more sophisticated Comes with data business models emerging, Downey says, such as those found in the popular Amazon Kindle 3G. 3GPP has been doing a lot of work around sponsored data connectivity, and it is a use case we are seeing more and more interest in from operators, as they look to ways to monetise over-the-top applications. The use of policy, then, looks to be key to operators future strategies as they grapple with OTT players, new embedded forms of connectivity, and their hard-won ability to stay relevant to their own customers. Its unsurprising, then, that the analysts have it marked as a growth area, in developing and developed markets alike.
Keep an eye out for work being done by the 3GPP on the proposed new Sy reference point between the OCS and PCRF. This will manifest itself in a more joined-up proposition from operators. We have already seen some policy and charging capabilities being exposed to subscribers...we see this trend accelerating... communicating the value of the heretofore invisible services of the telecommunication companies
"Despite being relatively close to each other in terms of geography, the Austrian and Polish mobile data markets have evolved very differently. When you compare how mobile broadband/USB modem services are marketed in Austria you will see that the operators tend to compete on a larger usage bucket for more money, and quite often for not that much money. 3 Austria has changed the simple model somewhat, now offering tariffs such as unlimited usage (no cap, no overage fees), roaming on the other 3 Europe networks at national rates, and a multi-device add-on package, so it will be interesting to see if these offers shake up the market." He contrasts that approach with that in Poland. "Polish operators use a very wide variety of mechanisms that include speed-based tiers and a very broad range of usage buckets, up to 40+GB/month in some cases." According to Fuller the Polish market is more versatile and operators are prepared to offer their subscribers a number of offers and incentives, which include:
Where to next?
There are softer gains too, that act to protect revenues by ensuring the overall customer experience. We are working with a leading Indonesian Telecom Provider to mitigate network congestion issues caused by usage of BitTorrent by subscribers, Downey says, and ensure that these heavy users are not consuming capacity to such an extent that it is causing a deterioration of service to other subscribers. So where does the use of policy management and control head next? Gayda says that in the mid term we are likely to see end-to-end quality management with congestion control (PCS controls access and core/backbone). In the longer
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From a revenue generation perspective CSPs need to ensure they continuously create interesting promotions and offers using realtime policy. We are probably going to see service-based revenue coming from an entire ecosystem of partners and advertisers as well as subscribers similar to what we are currently seeing with the use of the Internet
Network optimisation
ith ongoing pressures to maintain customer satisfaction, and the increasing number of data-intensive products and services requiring better management of network capacity, mobile operators are being tasked with the problem of better managing their network as data usage increases. Not only are revenues under pressure, deployed capex must be highly targeted to meet these revenue generating users. ABI Research anticipates that operators globally will deploy nearly 80,000 W-CDMA base stations by the end of 2011 a predicted total base station investment of US$5.6bn in 2011. Earlier this year network optimisation company Arieso estimated that up to 10% of that base station investment could be under-utilised merely through less than optimum positioning. Thats the sort of impact that can seriously dent a network business case. Network operators are doing the best they can with the tools they have available, but they need more efficient tools that show them the actual
Diving deep down into user data could target network resources more effectively.
Is there a case for feeding that information back into the network optimisation and planning teams, so that decisions can be made in the full light of the facts?
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Network optimisation
ALLOTS 12 USE CASES FOR OPTIMISING, MONETISING AND PERSONALISING OPERATOR NETWORKS Fair Use Management to cover the entire network with probes. As an responsible for 22% of OTT Video Caching example we are aware of one operator who gets two global mobile bandwidth. OTT Video Optimization hours of data a day from a rolling 20% of their RNCs. Being able to identify the Service Tiering This coverage challenge means it is rare that the dominant content Bill Shock Prevention information needed to work on a particular issue or providers, allows operators Off-peak Happy Hour project will be immediately available, and reto approach these providers Volume Charging (Quota) Application-based Charging configuration to get the right data takes time. Our with partnership offers that Bandwidth on Demand Turbo Boost experience is that with the data immediately available contribute to both network Illegal Content Blocking at their fingertips engineers are inclined to make QoE and profitability. DDoS Prevention much greater use of it. Blacklist Prevention Jonathon Gordon, Director of Marketing, Allot THE BENEFITS OF DETAIL Communication, agrees that there has certainly been a move to acquiring and acting on more granular Dehghan says that one of the key advantages of information. 24/7 geolocation technology is that the operator is The need to generate new revenue streams able to produce very detailed traffic maps and without making major CAPEX investments has precisely identify hotspots. Another trend is for become more pressing, he says. As a result, we operators to focus on ever finer problems. have definitely seen the demand for more awareness A common remark from Ariesos users is we would and more granular information rise on all levels. This never have been able to see that before, when they includes awareness of the type of applications have uncovered and resolved a problem that whilst running on the network, the device, the subscriber, only affecting a small area, was seriously impacting the and the content provider. experience of a significant number of what we call So what use can this level of information be put 'forgotten customers' whose poor experience is now towards? being revealed to operators. This type of problem has Gordon says that some of the use-cases he has been nearly impossible to detect and resolve with the come across within his operator customer base classic combination of statistics and drive test. include: There is another level perhaps arriving in this move Application awareness, such as the ability to to granularity and another approach that sidelines distinguish between specific video or VoIP the drive test, and that is crowd-sourcing network applications, is used by operators for network optimisation. Or, if you prefer a less on-trend term, planning and for deciding on what network using the users themselves to self-report thei capabilities they should have. As a result, it affects experience. One network quality monitoring company what optimization solutions operators deploy and called Metricell has launched a service that lets users where they are placed in the network architecture. track, by location and time, the quality of service they Device awareness: similarly used to implement are receiving from their network provider. solutions such as device-aware video optimisation, The service, called Tracesaver, is available as an which can provide significant bandwidth savings Android or Blackberry app (Apple app is "coming" the while at the same time improving subscriber QoE, by company said) and is said to deliver continuous applying different levels of compression per device. transparent tracking of phone usage and precise Subscriber awareness is used in conjunction with locations across the day. application awareness to implement intelligent If it delivers on its promise, it could provide a service charging models and policies per subscriber, for that lets users see exactly the quality they have example tiered service plans, which guarantee specific received, and of course have the ability to share that throughput per user. The ability to bucket with their service provider or operator. subscribers according to Tracesaver users are provided with encrypted their data usage patterns is access to an industry quality web site to review their If it delivers on its promise, it could especially useful for call details, whereabouts and all other key facts. provide a service that lets users see exactly marketing value-added Weekly, monthly summaries are provided to show services like unlimited social the quality they have received, and of course metrics concerning the service performance they network plans. receive from their network provider. Low signal and have the ability to share that with their Finally, as Allots dropped calls are pinpointed, services used, upload MobileTrends report recently service provider or operator data speeds and more are summarised for all revealed, YouTube alone is registered mobiles. An overall Global Service Quality
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Network optimisation
measure is provided for users over any period. The service can also be made available to mobile operators, with the platform tailored to integrate with an operator's customer support services function. Metricell said that the use of smartphones to report the actual customer experience could enable major advances to existing operator customer support systems with efficiency benefits and cost reductions by eliminating most 1st generation drive test measurements. Steve Mockford, Metricells Managing Director comments, Tracesaver uses smartphones to capture key data 24-7 to pinpoint network problem areas. Subscribers have a free service to track their whereabouts and summarise all aspects of their mobile phone usage. Customer use cases include emergency location of family or general tracking of fleet vehicles. Many users specifically want to pinpoint where they have unacceptable network service levels. From an operator point of view, Tracesaver has targeted collection to report locations of poor quality or dropped calls. Other key metrics such as upload data speeds, services used, overall coverage experience and more. Metricell works already with MBNL, providing its Livetime NetView product. Its Subscriber Experience module for Livetime can be used with Livetime NetView in an operator environment, and drives the Tracesaver customer-facing application. Livetime also acts as the project data warehouse for Everything Everywhere's network consolidation project. And recently, the BBC started its own project, using an app from Epitiro. Users can download an app which will record the signal you're getting on your phone - 3G, 2G or nothing - and feed the data back to our research project. The UK 3G survey app has been developed by Epitiro, the firm behind Ofcom's recent report on mobile broadband speeds. It will record phone signal data all the time the phone is switched on, and Epitiro is going to work with us to collect the results over the next month. The aim is then to plot the findings on a map which will be searchable by postcode. If we succeed, this should yield some interesting results. So if operators are taking a much more user-centric approach to their network optimisation, is this altering the ways in which the network and technical teams measure their own success? Dehghan says that Ariesos customers are now routinely carrying out 24/7 proactive monitoring of services at key corporate customer locations, and
large venues for major events. This starts to make a change in some of the KPIs, away from "how did our network perform" to "What service did we provide to our customers". This same shift towards a customer centric approach impacts the working methods as well. Rather than investigate with drive test data to try and understand the reason behind a poor KPI, engineers are able to work with real subscriber data, certain in the knowledge that they are diagnosing the actual problem being experienced indoors as well as outdoors. Allots Gordon says, When there was less granular data, there was also very little latitude for operators to optimise traffic without hurting the subscriber experience. As visibility into the network has improved, the new key performance indicator for operators is achieving the correct balance between subscriber QoE and cost-saving on traffic. That is always a balance that operators must strike, but now, it appears, they have more data with which to make those important decisions.
ANOTHER WAY TO SAVE? TURN OFF THAT BASE STATION! Mobile operators could potentially save more than $560m in operational expenditure annually by powering down redundant base stations at quiet times, according to calculations by Arieso. By analysing actual subscriber network traffic data, Arieso believes that around 390,000 base stations can be powered down during quiet night time periods, saving more than 3.5 billion KWh of electrical power. Most importantly, this can be achieved without affecting the service of users who would require service in a given area, Arieso clains. Operators can use new tools to understand which base stations can be powered down and for how long, without affecting the consumer experience. As consumer appetite for mobile data continues to rise, operators have sought to add more network capacity by deploying new base stations in densely populated areas, or busy urban zones. New base stations may help solve capacity issues during peak hours, but during the dead of night, many of these base stations become redundant yet still consume the same amount of power. Its well understood that energy consumption makes up a major portion of operator OPEX, and powering down base stations to reduce this has been discussed in the industry for some time, said Michael Flanagan, CTO of Arieso. However, the challenge of knowing how and when to save power safely, without affecting the user experience, has not been met. Understanding the detail of when and, more importantly, where subscribers are using or not using the network is central to making these choices and realising the savings. Using standard industry figures, Arieso has also calculated that this unnecessary power consumption contributes large volumes of CO2 to the earths atmosphere. Reducing the 3.5 billion KWh consumption shown in this study equates to a reduction of 1.9 million metric tonnes of CO2e (1.9 Mt CO2e). Eliminating these emissions would be equivalent to taking approximately 478,000 cars off the road each year, globally.
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20 - 22 September, Berlin As the flagship event of informa's SDP series, this conference and large-scale exhibition is a unique occasion to address the most crucial issues in advanced content and service delivery and learn more about the vast range of SDP opportunities. www.sdpsummit.com
best that the industry can deliver. That would just about make up for 55,000 mobile industry types asking the way to the Fira for a week a year, and hogging all the taxis. A Festival of Mobile though, come on. Get involved. Send your ideas in - theyre going to need them. Another baffling debate in the mobile world is whether or not Apple will produce a white iPhone 4, or even iPhone 5. For some unfathomable reason, the tech world waited with baited breath for news of another white phone from the California dreamers. Who knows why? But now, perhaps emboldened by the sheer excitement afforded by producing an existing device in a different colour, Samsung has stolen a march on its trans-Pacific rivals. Because the company has taken the step of producing a Galaxy S II...in white. It will be called the Samsung Galaxy S II white (of course) and will be available in the UK across all major networks and retailers from 1st September 2011. Mobile Europe recalls the trend for pink phones after Motorola (used to be a mobile phone company - ask your dad, hell remember) cleaned up with the colour. At one point, you could express your individuality by buying any one of 15 pink phones on the market. White...the new pink?
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