The future with 4G – How can operators

The future with 4G –
How can operators
monetise their LTE
networks?
M7 Managed Services Limited
A new approach to IT services
2
New Era
4G networks will underpin increasing digital and mobile corporate activity
and consumer lifestyles for the next decade.
Offering speeds equivalent to fixed-line broadband and five times faster than
current networks, 4G changes the game for telcos. The 4G network will:
•
Provide rapid access to innovative content
•
Support the explosion in new data – from wikis to blogs and video
•
Offer operators unprecedented access to network and data usage
information
•
Enable the creation of new, flexible services and tariffs
•
Create competitive differentiation based on quality of service
The UK is behind the world in 4G adoption, with 34 countries already using
4G. But the UK has a strong appetite for mobile data. So how can Telcos
exploit the UK’s data maturity and 4G awareness to fast-track adoption and
revenue streams?
3
Generating Revenue
Telcos are keen to avoid the mistakes made with 3G. In 2000, UK operators
paid the government £22.5 billion collectively for 3G spectrum licences. And
while 3G was first offered to the mass market in the UK in 2003, 3G did not
account for the majority of UK mobile connections until 2012, according to
Ofcom statistics.
There is, however, a push to generate revenues far faster this time around.
So what is the key to securing 4G revenue?
•
4G has an important role to play as an alternative to fixed-line
broadband in rural areas
•
While consumers check phones for email and Facebook updates every
few minutes, this market is unlikely to be tempted by the promise of
faster speeds until some highly innovative app or device is developed –
the 4G equivalent of the iPhone.
•
Corporate customers are set to be the centre of early 4G activity, as
network operators compete on quality of service
4
Changing World –
the Data Revolution
The pent up demand for 4G networks is significant. Today just 25% of the
five billion mobile phones in use globally are smart phones. Deloitte
predicts a record one billion smart phones will be shipped in 2013, more
than doubling the number of devices in existence.
•
Global mobile traffic is 13% of all Internet traffic according to KPCB*
•
The way we use data is also changing: by 2015 an estimated 80% of
data will be uncertain – from wikis and blogs to video**
•
LTE (4G) subscriber numbers are likely to triple, reaching around 200
million globally; by the end of 2013, year-end subscribers on LTE tariffs
will represent 10% of global mobile service revenue***
•
Between 50 and 100 mobile operators around the world will offer a new
form of tariff: all-you-can-eat services with unlimited access to specific
applications (apps)*
Sources
* KPCB – Kleiner, Perkins, Caufield, Byers
** M7 data landscape
*** Deloitte 2013 predictions
5
Corporate Focus
In the short term, this market will be all about the corporate customer, as 4G
enables organisations to overcome the constraints of handling big data
remotely. The corporate customer uses 4G for:
A Mobile Workforce:
Faster speeds enable more complex remote operations, such as 3D
database updates, supporting architects, project managers & utility workers
Automated Operations:
High density 4G networks can support automated machinery – including
driverless trucks – transforming operations, especially in remote areas
Improving Medical Care:
Stream images from accident to hospital to prepare the treatment team or
send patient records to the scene of the accident. Monitor high risk people
at home
Combating Terrorism:
The ability to handle massive data volumes has a huge implication for global
security services
Quality of service, network availability and corporate specific data mining
are critical components in market differentiation.
6
Cost of Investment –
Changing Model
Each Telco is investing an estimated £5 billion in the 4G network in the UK,
including spectrum purchases, network upgrades, market and LTE handset
subsidies. The network build is likely to take until 2025, with subscriber
adoption from 2014 through to 2027.
The implications of the 4G network build extend beyond the essential
infrastructure creation:
•
New network capabilities will affect the products and services on offer,
which will have a knock-on effect on both the Billing and Customer
Service systems
•
The ability to offer online or real-time charging will demand a new
approach to billing and new policies regarding IN (pre-paid) systems
•
With an emphasis on quality of service, self organising networks will be
essential to automate the prioritisation of higher tariff customer activity
•
The rise in intelligent devices across the 4G network, including
handsets, provides operators with the chance to exploit analytics and
improve network insight
7
Understanding Networks
4G networks are about far more than fast delivery of new content. Intelligent
devices – from handsets to network components – will provide rich
metadata about the way the network is being used; while the networks of
the future will be fully software based transforming network prioritisation via
real-time upgrades and service testing.
Network operators need to create a robust strategy for collecting and
analysing network usage data. This involves:
•
Assessing network health, locating the sources of interference and
hackers
•
Ensuring the delivery of video and rich media content
•
Exploiting self-learning networks to prioritise customers and offer quality
of service-based tariffs
•
Using data mining to gain customer insight, tailor services and tap value
advertising opportunities
•
Deriving new revenue from repackaging network performance and
customer usage information for MVNOs
8
The 3G Legacy
Existing 3G network monitoring is creaking under the strain. Companies are
struggling to manage network infrastructures that have evolved over the
past two decades; they are failing to capture or exploit network or customer
usage information; and innovative service offerings are postponed or
cancelled due to a lack of capital resource.
If 4G networks are to be successful, Telcos need to take a far more rigorous
approach to network monitoring. Telcos need to:
•
Extract data from network traffic to improve insight into network health,
ensure quality and security of the service
•
Consider the longer term value of this data to
provide new advertising and marketing
opportunities
•
Exploit insight into evolving network and data
usage to move beyond flat rate data plans
into more complex tariffs
9
Managing the Network
The new network management solution requirements are, therefore,
complex.
The solution must:
•
Handle multiple technologies - voice, 3G, 4G, and broadband
•
Cater for multiple devices - smartphone, tablets, smart devices
•
Support multiple data types - voice, text, and video
•
Allow the more complex deployments that can be enabled by 4G
•
Minimise costs by creating a single, end-to-end monitoring solution
The issue is not simply tracking network performance but creating selforganising networks. By enabling intelligent policy decision making within
the network, exploiting both improved insight
and automation to prioritise delay-sensitive
apps, such as video, network operators
will be able to ensure the delivery of
a high-quality service to premium
subscribers.
10
Flexible Model
This new investment has to be made immediately to enable network
operators to fast-track revenue generation. However, first mover advantage
cannot be underestimated, network operators need to embrace flexible
financing and open technology to ensure ongoing innovation in service
provision. New models include:
The Opex model:
Telcos cannot afford to miss out on chances to enhance and evolve the 4G
service or to improve quality of service due to lack of capital funding. Opting
for a hosted model and rental basis will provide operators with far more
flexibility to respond to both market forces and new demands on the network
A Plug & Play model:
The technology deployment must be as flexible as the
financing. A fully integrated solution that combines
infrastructure, software and hardware, preferably in a plug
and play form, will enable organisations to rapidly exploit
technology innovation in data capture, mining and analytics
without undertaking prolonged component procurement or
integration.
11
Exploit the Opportunity
So what will be the key to fast track revenue generation and gaining rapid
market presence for the new 4G network operators?
•
Highly efficient, integrated and flexible network monitoring solutions
must deliver rapid insight into usage and performance across voice, 3G
and 4G networks
•
Operators must create competitive offerings that exploit the new data
resources
•
Systems and business models, including billing and charging, must
continually evolve in response to corporate and consumer adoption of
4G
Flexibility is key:
Combining the Opex model with ‘plug and play’ network monitoring will
enable operators to continually evolve and swap in new component parts to
exploit innovation in data capture, mining and analytics.
A complete solution based on a managed model will provide operators with
the essential insight into network performance and customer behaviour
required to drive new revenues and create a flexible business model.
Contact Us
M7 Managed Services
Cefn Coed Business Park
Park Nantgarw
Nantgarw
Cardiff
CF15 7QQ
UK
Tel:
Email:
Web:
+44 (0)1443 657 100
[email protected]
www.m7ms.co.uk