Policy, charging and analytics: the holy trinity of revenue optimisation

The initial requirement for network policy was more network protection, but as it has evolved it has become a revenue generating tool in terms of differentiating packages and customer experience – in this way, it is something of a misused term.

With the rollout of LTE – particularly in Africa - and the desire to open up the environment to enterprise through open APIs, policy is now evolving beyond its initial definition.

“There are three phases of policy”, says Ben McCafferty of data charging and policy management specialists Volubill. “The initial phase is protecting the network, and the functions are much more about network policy – for example a fair usage requirement, or the need to squeeze down certain groups of customers based on network utilisation. These are not revenue-generating; they’re a network management function at the lowest level.”

McCafferty goes on to explain that the next level is subscriber policy. This is a move to a fuller policy that begins to cross over into charging and has more of a focus on subscriber service management. If consumers are offered bundles for airtime and data, they need to be able to manage this experience; as a result elements like self-care, on-device management and dynamic notifications become increasingly important.

Charging also becomes critical in this environment, and this can be a problem for policy providers if currency management is not inherent to their systems. They have to integrate to an OCS (Online Charging System) which can be fairly complex; however, if a system does have inherent charging functions, smart charging can be enabled within policy without this requirement.

The advent of LTE is bringing about advanced services such as VoLTE, both for subscribers and in the enterprise sector. With a bigger pipe, enterprises are capable of a lot more; not just in terms of revenue share but also by driving policy. To enable both of these, they need full policy capability.

“Operators are rolling out LTE networks which overlay their 3G networks, but they’re forgetting about the charging and the policy requirements of running two networks”, says McCafferty. “Charging, policy and billing are almost an afterthought, and they’re taking the wrong approach by applying simple PCRFs to their LTE networks.”

On 3G, operators have established a customer care system that subscribers are familiar with. If they then roll out an LTE network and attempt to establish PCRFs (Policy and Charging Rules Functions), it will be very difficult to maintain a common quality of experience. Initially at least, LTE networks are often overlays that fall back to the 3G network when LTE is unavailable; this makes it extremely difficult to provide bundles and CRM that need to cope with both networks. Rather than taking a network silo approach, McCafferty argues that it’s best for operators to take a charging and policy-driven approach with different access technologies beneath this.

As the name states, LTE is an evolution; beginning with just the data overlay, operators then deploy a ubiquitous LTE data network followed by hybrid VoLTE, which still goes back to circuit switch. It could be as much as 3 to 4 years by the time full VoLTE is achieved, based on factors such as the compatibility of devices, availability of spectrum and technical complexity. It’s therefore important to maintain an environment that can adapt to the evolution of network technology without being driven by it.

“Bigger pipes don’t just let operators increase their revenue – they can also provide better customer experience”, says McCafferty. “If operators don’t think through their plans for architecture deployment, there will be nowhere to enable the enterprise policy space. Some operators are making the same mistakes in this area that they did with 3G; they are treating the IT strategy as an afterthought.”

By having analytics connected to a variety of components – whether for revenue or details of customer use – it’s possible to be a lot more granular about how to combine these elements to upsell more revenue to operators. Improved network visibility allows operators to find what they value the most on their networks.

Jonathon Gordon, of intelligent broadband solutions firm Allot Communications, agrees that analytics data can be used to monitor or guarantee the quality of experience that a particular application provides as well as increasing revenue. He notes that OTT providers are often happy to pay a fee to operators if they can guarantee traffic for their application over the network.

“A lot of operators still use the old-fashioned model of getting as many subscribers onto their network and then running up as much traffic as possible”, he comments. “They look at themselves as pipes connecting people to the internet, but the question is: what is the operator’s value, both to their subscribers, and to OTT providers? The answer is analytics – collecting information about everything happening on the network and then feeding the information back to OTT providers.”

It’s possible to measure the exact profitability of a service based on the number of users, the amount of data it consumes and the amount of revenue it brings in. Using these metrics allows operators to fine-tune their services around those that will generate the most money while making the most effective use of the data pipe.

“There are two ways of looking at the network: you can say it’s overused for 2 hours a day, or that it’s an underused asset for 22 hours a day”, says McCafferty. “Operators need to attract new business from these under-utilised hours, as opposed to just squeezing the two hours when it’s over-utilised. Policy and advanced charging provide tools to bring up the revenue stream.”

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