Apple iPad: danger or opportunity for mobile operators?

July 4, 2010

BRITAIN

-Ken Denman is CEO of Openwave Systems. The opinions expressed are his own.-

With the launch of the iPad 3G, the industry is holding its collective breath to see the impact that the device will ultimately have on already overtaxed networks.

The iPad is expected to be a home and WiFi-centric, coffee-table device that people use for reading newspapers and browsing the occasional email. But until users get their hands on the 3G device and start to use it how they want to use it, it is all speculation. What is not speculation however, is that usage of the device is going to put more pressure on networks that are already creaking under the strain of the mobile data overload.

The majority of large global operators have already experienced network congestion challenges resulting in outages both in the U.S. and abroad. With the introduction of the Apple iPad, what are the logical immediate next steps for mobile operators to take?

It goes without saying that increasing network capacity is paramount long-term. There are various ways of doing this. Operators are upgrading their networks to 4G, and backhaul can be increased, through upgrading the base station infrastructure that links to the core network. Data can also be off-loaded to Wi-Fi.

These practices will all have their place in the months and years to come as operators face the “hockey-stick curve” of data growth.  However, the data growth is too great for operators to rely on throwing more hardware at the situation.  Thankfully in recent months, as the bandwidth crunch has intensified, operators have been looking at smarter options to help minimise network traffic now and in the future.

One immediate way for operators to avoid the storm is to trim the traffic usage by reducing the amount of content sent over the air through compression techniques, such as video optimisation and network acceleration. This option kills two birds with one stone.

By actually reducing the data required for video and other data, through smart software technology within the network, the operator is doing both the network and the end-user a favour. For the network there is a reduction in the data traffic burden. And for the end-user, because data usage is reduced, users experience faster video, faster browsing speeds and more immediate access to content.

Another vital tool is an in-network mobile analytics suite. An analytics tool will assess network data, helping turn it into actionable intelligence to improve traffic flow. For instance, analytics can pinpoint the users and devices most likely to cause network congestion.

It can also provide traffic reports to locate and alleviate bottlenecks across the access network, backhaul or web applications/sites, and show the best use of limited mobile network resources. Mobile analytics can also help guide the operator to increased revenue by identifying popular mobile internet and data trends on which to base relevant services, promotions and premium content.

Operators will also need to develop more consumption-based pricing capabilities and related plans to help reduce congestion. For example, why not consider metered usage for time of day, faster access or specific content access?

Operators could provide pre-paying subscribers with the ability to monitor their own use of mobile data, while pay-as-you-go data plans could include a variety of time-based options such as hour, day and week-long plans.

One of these approaches could result in users signing up for a day or a week of mobile data usage or even a per-megabyte (a unit of data measurement equal to approximately one million bytes) plan and accruing incremental revenues for operators that could total into the millions per year.

Other customers could be provided with custom speed or Quality of Service, which is the ability to provide different priority to different applications, users, or data flows .  This micro segmentation is rich with possibilities.

Frankly, however, the focus needs to quickly move beyond coping with the data overload to benefiting from the mass of data.  Right now, the wireless ecosystem is crying out for a more strategic and practical way to make use of the fantastic amount of customer data that wireless carriers are sitting on.

It is not a new theme that carriers are making minimal usage of this rich customer data, but neither has the industry risen to the challenge of profiting from this resource.

The missing piece of the puzzle is a new form of mediation, which has now finally slotted into place.  The old definition of mediation meant sniffing the data that goes over a carrier’s network allowing them to rate and bill subscribers’ usage of voice and data.

This is an internally-focused form of mediation.  The new, externally-focused form of mediation is context-aware mediation which makes sense of the context in which people consume data and services, so that all parts of the ecosystem can benefit from the incredible subscriber knowledge that is sitting untouched.

With Apple’s recent iAd platform announcement, it is just a matter of time before Apple and other players in the advertising ecosystem will begin monetising mobile data traffic.

There is no doubt that the iPad will be part of the data overload story when the wireless industry looks back in a few years time.  Hopefully the story will have a happy ending as carriers handle the overload through hardware and software solutions to help move the whole ecosystem towards a smarter set of networks that maximises the value that is currently sitting idle.

Photo Credit: A customer tests the new iPad tablet computer in an Apple store at its UK launch in central London May 28, 2010. REUTERS/Luke MacGregor

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