[YG]: The 3rd Way - MNOs Can Introduce White-Labeled OTT Services

So, there is a 3rd way - instead of losing customers to OTTs, or build your own (and sometimes fail, such as the case of Telefonica and Tu Me - here), MNOs can outsource such services (e.g. "Bouygues Telecom Deploys GENBAND's fring OTT Service" - here). 

A recent report by Declan Lonergan [pictured], VP, Yankee Group finds that "The growing popularity of over-the-top (OTT) communications apps such as WhatsApp, LINE and Viber poses serious challenges for mobile network operators (MNOs). As operators consider how to respond, one option is to introduce their own OTT apps by partnering with vendors on a white-label basis. This approach should be considered seriously, particularly by MNOs and mobile virtual network operators (MVNOs) that lack the resources and/or time to develop an app in-house.

.. White-labeling is a viable option. To respond to this growing threat, MNOs have several choices. One option is to introduce an OTT app under their own brand by white-labeling a solution from a growing number of vendors. This is a valid approach that allows MNOs to deploy their own apps quickly and at relatively low upfront cost".

See "Can White-Labeling Solve Telcos' OTT Challenges?" - here.

[YG]: Shared Data Plans Coincide Nicely w/LTE in Europe

A new report by Declan Lonergan [pictured], VP, Yankee Group concludes that "The great shared data experiment is well under way in Europe. Building on the recent success of this concept in the U.S. [see reports from AT&T, Verizon], mobile network operators (MNOs) on the other side of the pond are turning to shared data in their attempts to successfully monetize 4G/LTE. These price plans will achieve some success, but European MNOs shouldn’t assume very high levels of customer acceptance will be replicated everywhere outside the U.S". 

European operators ramp up shared data offers. Throughout 2013 there has been a significant increase in the number of shared mobile data plans being offered by European MNOs. The list of players that now provide this type of plan includes TeliaSonera [see "Telia Claims for Europe's First(?) Data Share Plan" - here], Telefónica O2, TDC and EE .. 4G provides a perfect vehicle. The launch of shared plans in several European markets coincides nicely with the commercial launch of 4G/LTE.

Related posts -

• [Survey]: LTE Drives Majority of Operators to Replace Billing and Real-Time Charging Systems - here 
• Vodafone to Offer Multi-Device and Family Plans (End of 2013) - here
• Telenor: "Customers Say that Shared Data Plans are Bad Idea - But .." - here
• [YankeeG]: "Operators should develop multi-user and multi-device price plans for LTE" - here

See "Shared Data Gains a Foothold in Europe" - here.

[YG]: Policy on Device - "an essential element in their overall policy architecture"

   

A new report by Jennifer Pigg [pictured] , VP, Yankee Group, concludes that "Service providers should approach policy on the device (PoD) as an essential element in their overall policy architecture. Wi-Fi offload should be the MNOs’ trial balloon for PoD, but MNOs should look to enhanced PoD use cases to provide differentiated services. Hotspot 2.0 will simplify Wi-Fi roaming, but at the same time will exacerbate the challenge of controlling the user experience when the subscriber roams off the network. MNOs will need PoD to maintain control of their subscriber base.

"A new class of policy on the device (PoD) vendors has emerged. These vendors use a variety of product, pricing and go-to-market strategies. Their PoD solutions will enable new revenues streams across a wide variety of usage models".

Related posts:

• Openet Acquires Routing Policy Technology - here and Openet Extends Policy Enforcement to the Device; Reduces Signaling Congestion - here
• GOS Networks: DPI & Policy Control won't Help - Control Needed at the Device - here
• Ovum: Operators Look for a Device-based Policy Solution for Wi-Fi Offload - here

See "Extending Network Policy to the Device" - here.

[YankeeG]: "Operators will shift their focus away from direct OTT competition to partnerships"

A new report by Declan Lonergan (pictured), VP, Yankee Group concludes that "The next two to three years promise even bigger changes and opportunities in the trillion-dollar mobile broadband ecosystem .. 4G is on the rise and Software-defined networks (SDNs) move from concept to implementation"

And, as has been said a number of times in the past - "Operators will shift their focus away from direct OTT competition to partnerships. These partnerships can take many forms, but in the short term they are likely to center around operator billing and the introduction of zero-rated data for access to popular communications and social media apps".

See "Mobile Broadband: Prepping for the Next Big Wave" - here.

[Yankee Group]: "Aito Technologies and Neuralitic will play key roles in CEM"

  

A new research by Declan Lonrrgan (pictured), VP, Yankee Group, concludes that "While today’s U.S.$1 trillion mobile broadband marketplace presents many challenges to operators, it also provides many opportunities. Operators that embrace OTT, adopt new business models for network data, cloud and video, and leverage their unique subscriber relationships to deliver optimal customer experiences will be best positioned to not only cope with but capitalize in this volatile segment".

"Operators will look beyond connectivity for sustainable differentiation. During the next two to three years, we expect to see more bundling of OTT communications apps with LTE subscriptions as well as operators increasing their portfolio of cloud-based solutions, including offering bundled content-storage and backup with premium LTE services" 

"Vendors will step up in the customer experience realm. New players including Aito Technologies and Neuralitic will play key roles, as will traditional stalwarts such as Nokia Siemens Networks (NSN), Alcatel-Lucent and Huawei".

See "What's Next for Mobile Broadband" - here.

[YG]: How to Keep Advanced Subscribers? (Hint - Speed and Service)

 
A new research by the Yankee Group shows why Speed/QoE-based tiered services could benefit MNOs, mainly by reducing churn.

The report, by Analyst Sheryl Kingstone (pictured), concludes that "Different customers have different needs and priorities, but some customers represent higher value than others. By tailoring pricing and packaging to the top users who value service and customization the most, MNOs will see long-term reductions in churn and upswings in profits .. When it comes to 4G, speed, personalization and care far outweigh price in the minds of at least one valuable customer segment: advanced users, or those who use advanced services such as Web browsing or online games daily".

"Advanced users want faster service. This group is 23 percent more likely than average users to say browsing speed needs improvement. Forty percent of advanced users are potentially at risk of churn, versus 29 percent of average users. Additionally, advanced users are more likely than average users to churn because of poor customer service (25 percent versus 15 percent)" 

See "Unlocking the Value of Advanced Users" - here.

[YankeeG]: "Operators should develop multi-user and multi-device price plans for LTE"

If everybody says so, it must be true. Yankee Group joins the other analysts (OVUM, Gartner, Infonetics Research) in recommending MNOs to deploy shared data plans.

A new report by Declan Lonergan (pictured), VP, Yankee Group, concludes that "The introduction of LTE services in more European countries during 2012 and 2013 presents MNOs with opportunities for fresh innovation, differentiation and market leadership. Their first challenge is to establish LTE as different from and superior to 3G. They can achieve this by positioning LTE as the best choice for customers seeking to connect their tablets, cut their land lines, share data with family members or optimize their spending with flexible prepaid price plans".

"..Operators should develop multi-user and multi-device price plans for LTE. With today’s rapid changes in data consumption patterns, customers will value price plans that offer certainty and control. The migration to LTE—combined with the ongoing economic recessionary challenges in Europe—represents an opportunity for MNOs to compete on the basis of offering the most family-friendly MBB services".

See "Positioning LTE for European Success" - here.

[YG]: "Operators must think of shared data plans as more than a discount threat"

A new report from by Rich Karpinski (pictured), senior analyst, Yankee Group, looks at shared family or multi-device mobile data plans and concludes that: ".. Mobile operators should view their initial efforts in this area as an opportunity to increase customer loyalty, reduce churn and speed customer transition to their new 4G networks while also setting the stage to deliver even more dynamic pricing schemes in the future .. Operators must think of shared data plans as more than a discount threat. Implement such plans correctly and savvy operators can create a “network platform play” that improves stickiness, reduces churn and even accelerates the migration of users onto new 4G networks".

See also "Verizon Wireless will Offer Shared Data Plans in 2012"- here and "Infonetics: Shared Data Plans - an Opportunity with OSS Needs" - here.

See "Buckets of Data: Evaluating Family and Multi-Device Plans" - here.

[Yankee Group]: Customer Experience - Hot Issue for MWC 2012

Declan Lonergan (pictured), VP, Yankee Group says in his MWC preview that "Customer experience will be front and center. Operators will present various strategies for improving customer experience, but a variety of operational, analytical and process-oriented solutions will come to the fore from companies such as Amdocs, Ericsson, Nokia Siemens Networks (NSN), Alcatel-Lucent and Huawei, as well as a slew of startups".


See "2012 MWC Preview: What's Hot and What's Not" - here. Related post - "[Infonetics]: CEM - a Vendor's Buzzword?" - here.

Survey: Operators Implementing Application-Aware Systems for OTT Video Monetization

    
A survey by Yankee Group, sponsored by CONNEXUS founding members Avvasi and BroadHop among 70 global telecom professionals on their plans for implementing monetization strategies for OTT video found that "17% indicated that they have already deployed application aware service plans such as YouTube streaming plans, and another 30% said they were planning to deploy application service aware plans in the next 12 months. 13% said they were either deploying or planning to deploy CDN technology in the coming year. 40% said they were currently engaging or plan to partner with content providers to enhance their subscribers’ OTT experience".

Simple Monetization Framework for Video Services;
Source: Yankee Group, 2012

 
Brian Partridge (pictured), vice president of network research at Yankee Group said : “The poll results indicate a growing interest in monetizing OTT video traffic .. Service providers are recognizing that they must first build media delivery capabilities into their networks if they ever hope to monetize their OTT video traffic – either through subscribers or via media companies and advertisements”

See the press release "CONNEXUS Poll Indicates 2012 a Pivotal Year as Service Provider Interest in Monetizing OTT Video Grows" - here. The report is available here (registration required);

In a survey conducted among the readers of this blog about monetization of OTT traffic, 83% said the opportunity is in offering subscribers premium services, based on higher QoE for OTT services, 44% think that subscribers will upgrade their service plan (multiple choices were allowed, N=81). Learn more here.

Source: The 2012 Broadband Traffic Management Survey 

[Yankee Group] How does Vodafone [Successfully] Address Mobile Data Growth?

        
Declan Lonergan (pictured), research VP, Yankee Group, explains that ".. Four key elements are required to successfully address the mobile data growth and profitability challenge: smartphone penetration, data pricing, traffic management and customer experience. These four encompass the most important initiatives—and should be the operators’ priorities. Vodafone is actively addressing each of these areas".

".. Traffic management: Vodafone is implementing Web and video optimization in nine of its European markets. The company claims this has helped it achieve data volume reductions ranging from 15-30 percent. It also continues to invest heavily in its 3G network infrastructure, and is ramping up LTE investments. The net effect is that Vodafone’s data traffic is on a sustainable path. .."

".. For Vodafone, smartphones and data services are central to competitive differentiation, revenue growth and profitability. The company is already demonstrating that mobile data can be an attractive business, albeit one that requires careful monitoring of customer lifetime spending and profitability".

See also:

• Vodafone Uses DPI and Policy Management to Improve QoE (and the vendors are..) - here 
• Vodafone: Data Revenues Growth Exceeded Traffic [Due to] Optimization and P2P Reduction - here
• Vodafone: "Traffic management limiting data volume growth to +31% - here.

See "Can Vodafone Solve the Data Profit Puzzle?" - here.

[Yankee Group]: MBB Penetration in Western Europe to Reach over 14% by 2015

 
A new research by Declan Lonergan (pictured), VP, Yankee Group, finds that "Mobile broadband (MBB) penetration in Western Europe will increase from less than 8 percent of the population at the end of 2010 to over 14 percent by 2015 .. Despite continued economic uncertainty, the total number of MBB connections—excluding smartphones—will almost double from 32 million at the end of 2010 to 60 million by 2015".

"Demand for MBB will remain strong, driven by significant increases in the use of wirelessly connected tablets. But several factors will also combine to inhibit market growth. These include economic uncertainty, limited price reductions, and the simple fact that much of the low-hanging fruit in the cellular modem category has already been picked"


See "Tablets Give Mobile Broadband a Boost" - here.

Security Win: $2M Wireless Tier1 Deal for Radware's Attack Mitigation System

  
A year ago Yankee Group predicted that - "A Denial-of-Service Attack Will Take a 4G Network Down"(here) saying  that "With clean-up costs (including the network, IT, customer care, media relations, etc.), fewer new subscriptions and increased churn, the bill for this DoS outage will be a minimum of U.S.$10 million in the first month alone .. The winners include vendors like Arbor Networks and Radware that help operators address these issues. But equipment vendors like Alcatel-Lucent (ALU), Cisco, Ericsson and Huawei will also be called on to assist, as will their professional services organizations".

   

One year after that, Radware announced a "a $2 million sale of its Attack Mitigation System (AMS) security solution to a leading Tier 1 wireless carrier in North America .. Radware's AMS solution will integrate the carrier's existing point security capabilities - such as firewall and proxy protection, signature-based intrusion prevention, anti-spam gateways and scrubbing center denial of service mitigation - into an holistic attack mitigation system."

"Radware's AMS is a real-time network and application attack mitigation solution that protects the application infrastructure against network and application downtime, application vulnerability exploitation, malware spread, information theft, Web service attacks and Web defacement. It contains a protection layer with security modules including denial-of-service (DoS) protection, network behavioral analysis (NBA), intrusion prevention system (IPS), reputation engine and Web application firewall (WAF) to fully safeguard networks, servers and applications against known and emerging network security threats"

See "Radware to Deliver Attack Mitigation System Solution To Tier 1 Wireless Carrier in North America" - here.

See also "[Juniper] Anomaly Detection and DPI Defend Against Application-Layer DDoS"- here and "NetScout: "Outages at NTT, AT&T and Verizon could have been detected and averted" - here.

Yankee Group: Diameter Routing Takes off - $212M Market in 2015

 

December is here, and it’s time for the best analysts to publish their New Year predictions. Among them is the Yankee group, with its "2012 Mobility Predictions: A Year of Living Dangerously" (download from here).

Diameter routing made it to the Yankee's list - "Diameter signaling is taking off. Yankee Group has seen significant request for proposal/request for information (RFP/RFI) activity and expects spending on IP-based Diameter signaling to more than double between 2011 and 2012—growing from U.S.$22 million to U.S.$45 million. And overall, we see the market mushrooming to U.S.$212 million in 2015, for a whopping CAGR of 57.2 percent".

This year, Tekelec said it received orders of $33M (here) for its Diameter router product (DSR). The orders were received in October, so most of it will probably not make it for 2011 revenues. Note that analysts see a $1.1-1.6B market for PCRF (here), for which Diameter routing is kind of an infrastructure element, on 2015 (Yankee forecasts $1.4B).

Yankee already names winners and losers for this young market. They list Acme Packet, Traffix Systems, Tekelec and Openet as "winners" and Tekelec and NSN as Losers (yes. Tekelec is on both lists. Sorry for the inconvenience). See my Diameter Routing product list here with links to posts on these and other vendors.

Yankee recommends operators to "Evaluate [PCRF] your use cases - We have moved beyond Policy 1.0, where PCRFs had one use case: control traffic. Mobile operators can use today’s policy solutions to actuate marketing programs, provide tiered services and implement parental controls, to name only a few" and "Anticipate the PEC [Diameter routing] requirement and issue PEC RFPs"

[Yankee Group]: Policy Control Market to Reach $1.4B in 2015; Sees Sharp Price Decline

       

According to Jennifer Pigg (pictured), Affiliate, Yankee Group latest report "Drivers including fair use, enhanced use cases, network convergence, VoLTE and M2M will combine to finally push the network policy control market over the billion-dollar mark in 2014, and to $1.394B in 2015, representing a heady 31% CAGR from the 2010 market of $365M"

The report findings below (small market size, sharp price decline) as well as very large number of vendors (here)] led the Ms. Pigg to conclude that "Until now, stand-alone policy vendors  have dominated the market. Moving forward, it will be led by control plane and large system vendors". See recent product announcements from Oracle (here) and Amdocs (here), as well as the Telcordia acquisition by Ericsson (here).

• "At $365 million for 2010, the policy and charging rules function (PCRF) market is tiny. However, with the role it plays in monetizing the network, the PCRF is the lynchpin for billions of dollars of mobile operator enhanced service revenues." 

• "Pricing for PCRF has decreased from $4 per active session to around $1 per active session. Yankee Group expects a further decline of around 10 percent over the next 12 months and up to 25 percent over the next 36 months"

Comparison to other forecasts - here.

See "The Market for Network Policy Control" - here.

[Yankee Group]: MNOs Must Introduce Customized Price Plans (w/Examples)

    

A new survey by Declan Lonergan (pictured), VP, Yankee Group concludes that "Mobile network operators (MNOs) must introduce customized price plans to sustain mobile broadband (MBB) revenue growth and ensure long-term business model sustainability. Tiered pricing should be only the first step toward a more personalized approach. MNOs’ end goal must be to ensure consumers are offered MBB services that meet their specific needs in terms of preferred devices, consumption behavior and price-sensitivity"

"..  Survey respondents exhibit strong interest in paying for features that enable them to control their MBB expenditure by avoiding any unexpected charges .. A significant proportion of customers (22 percent in our survey) are also willing to pay extra for a guarantee of consistent network quality .. Most MNOs are already experimenting with new MBB pricing schemes. For example:

  

• Vodafone Italy's Internet Sempre price plan is an example of a progressive European tiered MBB price plan. It offers three tier options, and throttles speeds once customer exceed their monthly data allowance. This is designed to encourage customers to upgrade to a higher-tier service. 
• TeliaSonera's 4G/LTE pricing in Sweden offers three service tiers--each with a different price point, network speed and data allowance--which TeliaSonera positions as a fair usage limitation
• Turkcell's MBB pricing does not feature different network speed tiers. Instead it focuses on volume-based tiering with consistent network speed".

 

See "Mobile Broadband Needs Customized Pricing" - here (press release) and here (extended article).

See also:

• [Yankee Group]: Consumers are Willing to Pay More for a "consistent, transparent and dynamic communication service" - here
    
• [Guest Post]: “When Everyone is Super, Then No-One Is” - here

Ericsson Updates: SSR (w/DPI) Scheduled for Q4; 85 PCRF Customers

    

The slides below are taken from the presentations made by Håkan Eriksson, Group CTO and President of Ericsson Silicon Valley and Jan Häglund (pictured) VP and Head of Broadband and Internet, Ericsson Networks during Ericsson's North American Analyst Forum held on August 30 in San Jose, CA.

The slides relate to the recently announced Smart Services Router (see "Ericsson Smart Services Router to Include DPI and Video Caching" - here), a major building block in Ericsson's "Service Aware Network", described by Mr. Eriksson.

Ericsson's policy management (now enhanced with Telcordia portfolio) has 85 contracts. 
   

Ken Rehbehn, Yankee Group Mobile Wireless Industry Analyst provided live blogging during the event - and tweeted some of Mr. Häglund statements:

• Policy control activity largely in SE Asia (helping operators w/ innovative charging approaches) 
• 1st Smart Services Router coming 4q11 as planned - 16Tbps
• Smaller versions (10slot/6slot) of Smart Services Router coming in 2012

 

 

 

 

 

 

Yankee Group: Average Cell Backhaul Bandwidth will Grow to 100 Mbps by 2015

     

The Yankee Group provides the following forecast for mobile backhaul:

• Average macrocell backhaul requirements were 10 Mbps in 2008 (seven T1s, five E1s). In less than three years, they have more than tripled to 35 Mbps in 2011, and by 2015, Yankee Group predicts they will demand 100 Mbps.
   
• There were 2.4 million macro cell site backhaul connections worldwide in 2010, growing to 3.3 million by [2015?]

Yankee's new research conclude:

"The market for wholesale backhaul services in North America will grow from $2.45 billion in 2010 to $3.9 billion in 2015, with the majority of this growth coming from Ethernet backhaul. Successful backhaul service providers will be those that can demonstrate price/performance and reliability, have software tools in place and can meet the specific needs of the mobile market.

See "Wholesale Mobile Backhaul: There's Gold in Them There Hauls" - here.

Deutsche Telecom Also Cooperating with Google - Is it the QoS Era Already?

 

After France Telecom CEO clearly sates he is willing to share revenues with Google (here), Reuters reports that Deutsche Telecom is also heading towards an agreement with Google and YouTube.

Jonathan Browning and Matthew Campbell report that spokesman Philipp Blank [picture] said "Deutsche Telekom plans to introduce various levels of connection quality to manage the surge in data traffic and enable high-bandwidth services such as video conferences and tele-medicine.. The Bonn- based company is also tripling the capacity of ports that connect its network with that of Google over the coming weeks to eliminate a bottleneck that slows down service".

A year ago, René Obermann, Deutsche Telecom's CEO said that "OTT providers should pay for High Quality" (here). It maybe still the case, although we saw that FT is willing to do just the opposite.

So the European Telecom giants seem to be pretty sure they can up sell for QoS! Good news for the DPI/PCRF industry!

This also fits the "bottom line" recommendation of Tole Hart (picture), senior analyst, Yankee Group: "OTT providers are taking away TV subscription and voice revenue from service providers. Service providers can use service and applications to improve the customer experience, remain competitive and gain additional revenue .. carriers must rethink how they offer services and applications so they can once again be a key element in the user experience" - see "Creating Customer Value in the Anywhere World" - here.

  

Back to the Reuters story, YouTube in Network Deal Talks With Operators, Manufacturers (here), "Google's YouTube division said it is in talks with all major mobile operators on an agreement to pool efforts to reduce the impact of video content on telecommunications networks" and mentions in addition to the German and French incumbents Telefonica and Vodafone - however without a specific reference of Google cooperation.

Richard Feasey, Vodafone public policy director, explains the network-content provider eco-system (or win-win chance): “You hear the content industry say they struggle to make money with piracy and so on, while we have challenges with the investment requirements versus the revenues Everybody faces a challenge in the long run .. One could imagine services that would allow people not only to get their content closer to the customer but also then to have it delivered faster or with higher quality to the actual device" 

Resource: Diameter Routing Explained

  

In the recent months we saw the introduction of a new element in the PCRF/PCEF management architecture - the Diameter Router/Policy Exchange Controller.

Products were announced by Traffix Systems (here), Openet (here), Tekelec (here), IntelliNet Technologies' (here) and ACME Packet (here).

A white paper by the Yankee Group (commissioned by ACME Packet) provides an overview on this new element.

See "Policy Exchange Controllers: Enriching Diameter Signaling for LTE and IMS" - here (registration required).

"New Product Category: The Policy Exchange Controller

Yankee Group coined the term PEC to describe a new network element that has emerged on the market over the past year. Pioneered by IP border infrastructure specialist Acme Packet, the PEC facilitates policy exchange in all-IP networks. As a routing hub for all Diameter messages, PECs alleviate the signaling, security and reach challenges inherent in IP networks while reducing the mesh of Diameter connections that hamper network scalability and management. The PEC also provides critical security, interoperability, routing and reporting functions for Diameter signaling. These functions lower costs, streamline networks and assure resilience for LTE and IMS networks"