Accelerating Innovation and ARPU in the LTE Era

As the digital economy expands with the rise of LTE, operators continuously seek innovation to better serve customers and compete.

This is driving ever more sophisticated charging and billing requirements, which in turn is challenging legacy infrastructures.  A recent survey by Openet reveals views and insights on Charging and Billing for the Digital Economy, gathered from eighty operators worldwide.

Overall, this survey suggests that to be successful in the digital era, operators need to replace legacy IN prepaid charging and traditional billing as these systems were designed for traditional voice services. As such, most of the operators surveyed said that these systems will be replaced within the next four years with real-time, online charging systems (OCS).

The survey further highlights key strategies to accelerate innovation and increase ARPU.

In terms of innovation, flexible, real-time charging and its integration with policy control are at the top of the list with an average of 76% of operators thinking they are either important or very important in enabling innovation. The capability to automatically upsell offers based on real-time intelligence and analytics follows with 69% of the respondents. As an example, a customer with a smartphone trying to access a data service without a data plan could automatically trigger a data bundle offer. Convergence and network independence are also flagged as important attributes for innovative charging by a majority of operators. This provides the flexibility to create bundles across networks, to deliver all services to all customers and to offer customers flexible payment options and more. Last but not least, a recent area of innovation is the extension of policy and charging control (PCC) to the device using a secure interaction gateway between the policy & charging control network elements and an application on the device. This, for instance, enables operators to provide usage visibility to customers on the device (via the app), to allow them to set personal controls on spend and to present upsell and loyalty rewards offers on the device – all of which also represent key strategies to build loyalty and increase ARPU.

The survey has further revealed five key capabilities and attributes required for operators to accelerate time to market. The clear winner is the capability to create, launch and manage all offers to all customers in a central place - in other words a centralised offer catalogue - with the vast majority of respondents (79%) rating it as important or very important. It is closely followed by centralised convergent charging which further simplifies launch processes, the ability to configure offers with minimum involvement from vendors, a rapid service deployment environment, and the ease of interoperability which minimises integration issues and subsequent delays.

Moreover, as competition intensifies and economic conditions force many customers to be more cautious about their spending, operators need to deploy a combination of strategies - not only to keep their customers but also to stimulate more spend. The survey has highlighted five winning strategies to build customer loyalty and increase ARPU, according to the majority of operators.

Enabling customers to purchase and activate services in real time on the device is viewed as the most successful strategy, as rated by 74% of the respondents. This strategy stimulates loyalty by offering customers freedom and flexibility, enabling them to get the services they need anytime and anywhere, right on their devices; it also maximises the revenue potential for operators by enabling instant purchasing at the very time of need. Loyalty can be further enhanced when full transparency is provided to customers, with real-time cost and usage visibility on the device, as highlighted by 64% of the respondents.

Timely context-aware offers sent to the device also appear to be a top strategy, with 68% of operators rating it as most effective. The customer context can include personal information such as usage, service subscribed, location, time, restrictions, application accessed, birthdays, and more. As an example, a smartphone user with no data plan or on a very low usage plan attempts to access Facebook, this could then trigger a data bundle offer that provides unlimited access to Facebook for less than €5 a month.

This strategy enables operators to upsell more effectively, bringing to customers the right offer at the most opportune time. 63% of the respondents also think that simply combining usage notifications with relevant offers further increases upselling opportunities for operators.

Half of the operators think that upselling add-ons to a base contract directly on the device is a successful or very successful strategy. This strategy allows operators to develop multiple value-based offers in accordance with various customers’ needs, to bring them to market rapidly and present them to the right customers at the right time; and requires the capabilities and attributes discussed in the previous section.

In summary, this survey suggests that to accelerate data service innovation, operators mainly require a real-time charging/OCS capability that is flexible, truly convergent, and integrated with policy control (PCC). It highlights that the capability to create, launch and manage all offers in a central place, in other words a centralised offer catalog, is key in accelerating time to market. The survey also points out the importance of extending PCC to the device in order to better engage with customers, successfully build loyalty and increase ARPU byenabling operators to offer on-device purchase and activation of services.

openet-logoAbout Openet

This article has been sponsored by Openet, a leading global vendor of real-time telecom business systems.

Openet technology manages the decision making and interactions that translate network activity into revenue. Openet systems process the massive volumes of data streaming through a network, use that data to track activity such as network usage for many millions of users simultaneously, and perform real time actions such as charging or billing and managing connection quality. Service providers worldwide choose Openet to address both strategic and tactical needs because of both functional and technical differentiators.

Openet is a global company headquartered in Dublin, Ireland. Find out more at www.openet.com

About the Author

Corine Suscens is the Senior Marketing Manager at Openet. Read her previous article here.

Access the full survey report here.

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