Darwinism Goes Mobile
Survival of the fittest mirrors today's mobile networks market. Competition is fierce for the latest and greatest handsets, network coverage, service pricing (especially flat-rate versus usage-based billing) and even new service plans targeted at social networking and video streaming. The current mergers and acquisitions environment within the mobile industry begs the question: What do mobile operators need to do to avoid becoming extinct? They need to get smart.
Mobile broadband is now moving on "Internet Time;" new applications and devices are hitting the market on a weekly basis. An operator that can launch new services and react in a matter of weeks to the changes in network behavior will survive and thrive. If it doesn't, or can't, its alternative is to go the way of the dodo – extinction.
Return on investment (ROI) prevails as today's foremost question about the financial investment in 4G network infrastructure. Pricing plans are moving from flat-rate to usage-based, but without compelling applications and the ability to run them without breaking the bank, LTE adoption will not meet expectations. Service providers that do not have visibility into application and usage trends in their mobile broadband networks run the risk of investing their capital with minimal ROI.
Operators are facing major challenges that are dramatically changing how their mobile networks operate. During the BlackBerry era, the attach rate (the percentage of users connected with data sessions) for mobile users was often 10 to 20 percent. That number is growing dramatically; some operators estimate numbers approaching 30 to 50 percent with the prevalence of smartphones running social applications because the users are continuously transmitting and downloading content. The average user now consumes more data with their smartphone than last year (no surprise there). But even that is not what many operators fear most.
Tethering has created a capacity planning nightmare for mobile operators because most dimension their networks and backhaul differently for mobile broadband hotspots and dongles than they do for smartphones. Dongle users can use more than 10 times the bandwidth of smartphone user, often simply by running file sharing or downloading large files (think Microsoft updates every week). Operators that can detect when users are tethering, and manage these services through either up-selling service plans or charging for a tethering service, will have more accurate information for their long-term capacity planning. Using simple methods, as many operators are doing today, will annoy consumers by returning false positives and accusing non-tethering users of abusing their service. Fine-grained detection and enforcement for tethering is a key network intelligence requirement for every mobile operator supporting data services.
The explosion in streaming video and its expansion to mobile devices also has had a profound impact on mobile operators. Understanding what content providers and streaming services are popular with users can enable content-aware service plans to encourage usage by subscribers. "Netflix Free Weekends" would get a lot of attention from subscribers and would be a great publicity boost for a mobile operator demonstrating their high-speed mobile broadband network. Streaming video, however, cannot be managed like file sharing or downloads. Plus, it requires a high quality of experience to deliver video to handsets. YouTube and Netflix today account for as much as 50 percent of traffic at peak times on many of our customers' broadband networks, but that content is on-demand, and often spread across the day. Live events, when users are accessing the video streams at the same time over the mobile broadband infrastructure, are proving to be even more challenging for mobile operators. Mobile operators without detailed understanding of the usage of video content delivery networks, content providers and streaming applications run the risk of users being dissatisfied with their mobile broadband.
But these issues are just the tip of the iceberg. They represent some of the most sensitive network and business intelligence problems that mobile operators face. Network intelligence allows mobile operators to quickly react to the changing business climate and capitalize on it with services that meet the desires of their customers.
Some mobile operators around the world have implemented network intelligence solutions that enable them to understand the application and usage trends on their network in real-time. All operators can get basic usage statistics for their infrastructure, but very few have the ability to capture this information at the granularity of subscriber, application, device and location. Possessing the ability to see network behavior in real time, as well as to create business-ready customized reports, will give mobile operators a competitive advantage over their rivals.
Fine-grained intelligence translates to, for example, a mobile operator realizing that iPhone users at a specific base station use more streaming video from Netflix or YouTube. This knowledge would enable the operator to plan its capital expenditures for backhaul and monitor trends on the growth of iPhone users on any specific site. If that same cell site was congested because broadband dongle users were file sharing, the operator would need to make completely different business decisions. An operator without that level of visibility would not know if the congestion on that cell site was due to streaming video or file sharing, and might make the wrong decision on whether or not to implement fair use policies, traffic management or even buy more backhaul bandwidth for that site.
Mobile operators that lack this knowledge will struggle to launch new services. They will become followers, not industry leaders. In a market where only the strong survive and the rest of the players are consumed, not using business-ready network intelligence will put a mobile operator at risk of being the modern day equivalent of the dodo.
Cam Cullen is vice president, Global Marketing, at Procera Networks.