Trends & Forecasts

“Accelerating Growth” – How Wireless Operators Can leverage LTE to accelerate growth in broadband services

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LTE has now become the de facto standard of choice for the evolution of wireless networks in Latin America. Although adoption rates have typically been faster in North America, where the regulatory environment is perhaps more amenable to rapid growth, most major operators in Latin America have at least trialled the technology...

LTE has now become the de facto standard of choice for the evolution of wireless networks in Latin America. Although adoption rates have typically been faster in North America, where the regulatory environment is perhaps more amenable to rapid growth, most major operators in Latin America have at least trialled the technology.

According to analyst, Maravedis, by the end of 2011 there will be more than 20 LTE commitments in the region, an additional 7 LTE trials will be conducted, and possibly 4 operators will have commercially launched the technology, however the real momentum is expected to occur in 2014-2015, when Maravedis anticipates more than 25 operators will have commercial LTE services. 

Even if the pace of change is not as fast in Latin America as in other regions around the world, the ‘direction of travel’ amongst wireless operators is clearly towards the development of LTE networks and issues around the implementation of the technology and delivery of services will clearly be of significant interest to operators moving forward.

One of the key issues will be how operators can drive the growth of next generation services enabled by the technology. With the LTE emphasis being on mobile broadband, operators will need to support these next-generation solutions while continuing to support 3G, 2G and, where appropriate, CDMA devices. This will increase volumes of devices and SIM cards moving through distribution channels.

As awareness of mobile broadband expands, developing competitive services and points of differentiation will be increasingly important to operators in winning market share.

A significant proportion of the mobile broadband subscriber market is  prepaid and this segment is currently underserved. The anonymous nature of prepaid makes it difficult for operators to engage with these subscribers, particularly if they are using the pre-provisioning model common in most markets.

Some operators are already moving away from pre-provisioning for 2G and 3G and instead adopting dynamic provisioning - where network provisioning and the allocation of resources to SIM cards is delayed until the point of first use. Importantly, it also enables an on-device interaction with the subscriber at that point. Dynamic provisioning therefore gives operators an immediate opportunity for engagement and interaction. Using this method allows them to gather the missing information they need and deliver tailored marketing messages and promotional incentives to new subscribers.  

As LTE and mobile broadband drive the development of a wider range of devices, the ability to make this interaction both device and location aware is an important part of a competitive strategy. Operators need to be aware that there is a significant difference between the kind of interaction suitable for a user with a feature phone connected to a GPRS network, and that appropriate for a LTE-network connected tablet with large colour screen and multi-touch capability. If the operator wants to provide the best possible user experience, it needs to understand the nature of each device with which it is engaging.

The proliferation of sophisticated connected devices offers an opportunity to transform the way that operators market themselves to wireless subscribers by changing the user interface. For example, upon buying a new device, users of connected devices can automatically be taken to an easy-to-use web portal or landing page that they can personalize according to their specific requirements, allowing them to choose suitable tariffs, price plans and data limits – all from the comfort of their chosen environment whenever they want, and without having to experience long queues at the point of sale. This browser-based approach also opens up opportunities for the operator to promote its brand more effectively and to deliver high-impact marketing campaigns.

The other problem with the existing pre-provisioning models, when it comes to supporting increased numbers of SIM cards, is that every card will require space on the Home Subscriber Server (HSS) and other key network elements and support systems. This not only reduces available capacity, it is also hugely expensive.

As a result, the operator will typically be forced to make a large upfront investment, in the cards and in the network space they occupy. To add to the problem, much of this investment ends up wasted because a significant proportion of SIM cards shipped are never used.

Pre-provisioning can also lead to an uneven distribution of SIM cards across vital elements like the HSS and other VAS platforms. Uniform loading of these elements relies on accurate forecasting significantly in advance of sales, and any variation from forecasts can result in a sub-optimal distribution that may ultimately involve expensive re-homing of subscribers between HSSs.

The pre-provisioning model does have one key advantage, however: namely, that the SIM works immediately it is in the user’s hands. So, how do operators find a cost-effective alternative that preserves this important benefit?

Dynamic provisioning achieves this by enabling new SIM cards to interact with the provisioning process via the mobile network despite not having previously been provisioned. This means that the allocation of network resources can be deferred until the point of first use. 

There is no need, for example, to buy network capacity to support SIM cards that are inactive in the supply chain and uniform loading of network elements and systems can be ensured by appropriate selection when the SIM is first used, rather than weeks in advance.

In commercial terms, the key benefit is that this new approach allows operators to eliminate upfront costs they would typically incur if using the pre-provisioning model. In particular, it helps them avoid the need to buy and commission more network platforms than are actually required, merely in order to accommodate SIM cards that may never be used nor generate revenue.

Operators who are implementing systems and processes for LTE should seize the opportunity to implement dynamic provisioning and optimize their logistics. The ideal is to deploy a dynamic provisioning solution that supports integration with 3G and LTE networks and build processes for allocating resources appropriate to the devices and networks used.

Positive Prospects

The dynamic growth in LTE networks and consequent rapid increase in the volume of mobile broadband and connected devices is presenting opportunities to wireless operators to drive incremental revenues.

However, it also brings challenges including the requirement to effectively manage the dynamic growth in SIM card volumes and associated issues of cost and capacity and the need to handle the dramatic increase in end users opting for pre-paid subscriptions as mobile broadband becomes ever more popular. Consequently, they will need to engage proactively with end users in order to deliver exceptional quality-of-service and high-impact marketing campaigns and promotional incentives.

With the availability of dynamic provisioning solutions, operators are well placed to address these challenges, capitalise on new market opportunities and face the wireless future with confidence.



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