Amsterdam Feels the Heat of Policy Control

Posted: April 7th, 2011 | Author: | Filed under: Events | Tags: , , , , | 4 Comments »

I have just returned from Informa’s Policy Control event, which was held in Amsterdam earlier this week, and where Comptel was present as an exhibitor and as a participant in a panel discussion. It was a very good event: some excellent speeches, some excellent networking.

There is no doubt that policy control is HOT at the moment. Infonetics analyst Shira Levine, who was chairing the first day of the event, stated that she expected the market to quadruple in size by 2015, and reach $1.6 billion! The event’s presentations broadly offered three reasons for this: the growth in data traffic, regulation, and the drive to differentiate and personalise services.

The growth in data traffic, and the fact that it is outstripping revenue growth, are both well documented. Many presenters offered the “Xs”. For example, T-Mobile Netherlands said that between December 2008 and December 2010, smartphone traffic grew by 6X, volume by 5X and (maybe most interesting of all) signalling by 7X. On that last point, a number of speakers identified the growth in signalling traffic as the most pressing problem concerning congestion—even though LTE is more efficient than HSPA, this is a problem that shows no sign of going away. Overall, this traffic growth is driving operators to try and “control” bandwidth usage (more about that later).

The second driver mentioned at the conference was legislation. For example, Telefonica Germany (formerly O2) explained how it had to implement roaming cost control to comply with European Union legislation. In fact, the speaker seemed to imply that the operator’s policy control solution still wasn’t live, and that to comply with the legislation, it had to find a work around: Telefonica basically does not charge for roaming data usage over €50 limit, and just reduces the quality of service for the user. This is not done in real time, as the usage calculation is done during the billing run. Clearly, though not explicitly mentioned by Telefonica, this is a source of revenue leakage (in the form of uncharged usage). Nonetheless, the communications service provider (CSP) explained that while revenue per MB went down as a result of this legislation, overall revenue for data went up, because users no longer suffered bill shock.

The final driver for the adoption of policy control is differentiation and personalisation. There was a lot of discussion in particular around the move from punitive and “blind” bandwidth control towards intelligent bandwidth management as part of tiered offerings. The BT speaker put it succinctly: “policy control is”, she said, “the last gasp of a centralised control approach.” She argued that operators should be providing what customers want, and that means Skype, Netflix, etc. The walled garden approach is dying, and over-the-top services are here to stay.

Other speakers talked about offering application-aware bandwidth (e.g. for video or gaming) and tying that closely to price plans with policy control and charging. Zain Kuwait, for example, explained how it offers two plans, eeZee for average users and e-Go for heavy users.

U.K. ISP PlusNet did sound a note of caution though: customers don’t always understand tiers. The operator shared the result of a survey it commissioned—what consumers want, in order of importance, are reliability, price, speed and multiple use. Value-added services and usage were not factors consumers cared about. For that reason, NetPlus offers just two simple price plans, with the tiered offering being an add-on rather than a plan on its own.

So what about lessons learnt in terms of implementations? Many operators talked about focusing on specific use-cases rather than tackling a generic policy control deployment. Polish operator Play also said that, when looking for a solution, “flexibility and performance” were key. The CSP also mentioned that operators need to build redundancy; as it unfortunately found out, if PCRF fails, the network goes down! The BT speaker once again put it very straight: operators should be looking for “a vendor who plays well with others” and “delivers on its promises”. A number of operators, such as the U.K.’s TalkTalk, also emphasized the importance of being open and honest with customers about what operators were doing, especially as far a “fair usage” was concerned.

Finally, I was particularly pleased to hear Comptel’s very own mobile broadband survey mentioned by three speakers, including one Comptel competitor!


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