Mobilizing Data for Profit

Deep packet inspection is the silver bullet for increasing average revenue per mobile user.

According to a report recently published by Gartner, smartphone sales in 2011 were up 58 per cent from 2010 (Figure 1). With iPad and tablet sales predicted for similar growth, the result is a seemingly insatiable demand for data-centric applications lead by video that is putting incredible stress on mobile networks. The more powerful the device, the more data is downloaded. While accessing data using smartphones easily outnumbers data access using laptops (via dongles), the laptops consume significantly more data by volume than smaller mobile devices. There has been an explosion of mobile data traffic and the stress on the mobile network will continue to grow unless operators step in.

The initial growth of mobile broadband data drove service providers to focus on traffic and congestion management. Policy Servers are the key means to apply more rational policies when networks became congested, usually by dividing customers into tiers with different data volume limits, and devising policies for what happens when limits were breached. This approach has become widely known as fair use management and applications such as bill shock are being added to ensure users understand what and how much they were being charged for – but it is simply not enough to just use fair use management and the bill shock application. The end user and the network both need more concrete measures in place to protect against an over congestion of the networks and to ensure that end users are not paying extortionate data rates.

While bandwidth management and control of the pipe are absolutely necessary, building a bigger, faster “dumb pipe” alone won’t keep the Network Service Providers (NSPs) in business. The fact is, Average Revenue Per User (ARPU) for data traffic is not increasing at the same rate as the demand for service – this cannot remain the same for very much longer. NSPs must find ways to add services, enhance Quality of Experience (QoE), and provide flexible, dynamic, up-sell options to monetize the data pipe. Deep Packet Inspection (DPI) technology is the key to make this change happen. Value Added Service (VAS) applications are being developed that will use DPI technology to improve the user experience. Operators will be able to move away from the “all you can eat” data plans towards more flexible services and sophisticated pricing plans, which will benefit the operator and the user.

Figure 1: Mobile Data Explosion by Device Type

Adaptation and improvement
To truly innovate, operators need to think beyond cost-centric measures and adapt current business models to today’s increasingly data hungry users. Operators must transform their networks by developing services that reduce incremental network operating costs whilst increasing IP service revenue. Service operators must also improve the user experience to avoid customer churn. Operators need to provide services linked to demand, both in terms of the network and the individual user. For too long now customer retention has focused on providing the latest smartphone, tablet or price bundle rather than the services that are available on these devices. A report from the CMO Council entitled “The Challenge of Customer Churn and Market Burn”, says that a two per cent increase in customer retention has the same effect on profits as cutting costs by 10 per cent.

Figure 2: Managing the Data Pipe for QoE, Billing, and Revenue by Services and Applications

In short, building out the data pipe is simply not enough. Service providers must find ways to monetize the data pipe (Figure 2). This can only be accomplished once the dumb pipe has become intelligent. A deterministic packet network is the only way to effectively manage packet-based traffic. The operator must know and control its network traffic by type, user and device. It is not only about improving the speed and throughput of the network to accommodate the data explosion, but providing the user with new services and control over their services and costs. Knowledge based on DPI brings the control necessary to make this happen. An intelligent data pipe has the ability to manage content, services, billing, access, as well as Location Based Services for children and household security. These are new services and control that operators can offer customers once the intelligence has been implemented that can only come from DPI.

In addition, packet inspection is used to analyze network traffic, to discover both the type of application that sent the data, where it came from and the device the service is bound for. In order to prioritize traffic, or filter out unwanted data, DPI can differentiate data, such as video, music, VoIP, e-mail and Web sessions. The technology can also be used to delay, or “throttle,” some kinds of content generated by certain applications. This controls the delivery of content, improves network security and allows both the network and theuser enhanced control (Figure 3).

Figure 3: User Control for QoE is Key!
Figure 4: LTE: The Flat All-IP Network
Figure 5: Intelligent & Knowledgeable Policy Control for Customer and NSPs

DPI is essential to the 4G/LTE setup
In the 4G/LTE all-IP world, the Mobile Management Entity (MME), Serving Gateway (SGW), and Packet Data Network Gateway (PGW) make up the core core elements (Figure 4). The Policy Control and Resource Function (PCRF) is used for setting Quality of Service (QoS), Service Level Agreements (SLAs) and usage restrictions that are key to new service and billing paradigms. Comprehensive and dynamic policy definitions provide better management and monetization of the packet data pipe (Figure 5). These emerging fee-for-service models rely on information provided by these network elements as well as enhanced HSS learning user ID and preferences.

DPI is essential in this new world to smooth billing practices, improve network security and deliver the option to actively control packet data pipe sessions through traffic filtering and redirection. This can help ensure that subscribers are not only receiving the correct package of services they purchased from their service provider, but support bill shock and advice of charge applications which provide the user with peace of mind.

First generation policy servers met the initial challenges of this increasingly demanding mobile data traffic explosion. These policy servers protected the network from periodic overuse and ensured equal access to all users. Next generation policy servers and the upcoming data offload cousins will need far greater intelligence to provide customers with services and control. Service providers must offer these capabilities to be successful in the future. DPI engines assisted by fast and efficient IP flow management will meet this need. For both customers and providers alike, controllable and managed services are the key QoE and a profitable business model.



Andrew (Drew) Sproul is currently Director of Marketing at Adax, Inc. During his 20+ year career in telecoms Drew has held management positions in Sales and Marketing at Adax, Trillium, and ObjectStream. Drew has a BA in Human Services from Western Washington University in Bellingham WA.




Contact Information

Adax, Inc.

2900 Lakeshore Ave
Oakland, CA, 94610

tele: 510-548-7047
fax: 510-548-5526

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