BYOD, Toll-free Data – Operator Strategies for ARPU


BYOD – Bring your own device has become the new nightmare for CIOs and security folks in the world of IT. I remember a ticket assigned to a security analyst while working with a Mobile operator that had a BYOD policy, he left me a cryptic message to meet him with my laptop.  It so happened that the outlook and Windows accounts were the cause of conflict, flooding the account servers with authentication requests. Can this happen over the air for mobile operators?

Technology Incompatibility: The biggest risk is the radios on the cellphones that might support different bands and cellular technologies. For example a CDMA phone will not work on GSM technology based networks eg. Verizon phone will not work on AT&T. The new 4G LTE system used by Verizon, MetroPCS, and AT&T runs on SIM cards much like the ones for GSM networks, and GSM phone owners are used to being able to switch phones from network to network, as long as they’re unlocked. But Verizon may be designing its phones to only run on Verizon’s very specific wireless frequency, locking out all other possible carriers. Verizon and AT&T both run their LTE networks in the 700-MHz band. But Verizon’s network is mostly in 746-787MHz, while AT&T’s will be primarily in 704-746MHz. Some Verizon and AT&T spectrum overlaps in an area called the “lower B block,” but not much. Verizon could build its phones to exclude AT&T’s frequencies, and vice versa.

MetroPCS runs an LTE network in the 1700-MHz band, where AT&T has said it intends to also set up LTE in the future. Verizon owns some 1700 MHz spectrum, but hasn’t announced any plans for it. Cricket’s future LTE network will also be in the 1700-MHz band. Complicating things, Verizon and MetroPCS use CDMA for their 2G/3G system while AT&T uses the incompatible GSM/HSPA technology. For now, all phone calls run over 2G/3G networks, although Verizon and MetroPCS are both working on transitioning calling to LTE over the next year or so.

The result is a plethora of incompatible devices, likely to continue long into the future. The paradigm that LTE would allow one device to work on several U.S. networks will not work. And when we get out of the U.S., things only get worse. The International Telecommunication Union (ITU) has approved many different bands for LTE, including 700, 800, 850, 900, 1500, 1700, 1800, 1900, 2000, 2100, 2300, and 2600MHz. That may make it impossible for LTE phones built with current antenna technologies to roam truly globally. There are just too many bands!

Signaling problems: (Control plane issues) Mobile networks are comprised of a number of network elements integrated to address the over-the-air communication over radio, the transport of data between the radio terminations and the Internet, the setup of communication sessions and enablement of services utilizing the data connectivity.

 

 The elements of the network are:

  • Control or Signaling plane: Enable the initiation and termination of communication sessions.
  • Data plane: The elements of the network that enable the transport of the communication data over sessions, previously established using the Control or Signaling plane.
  • Connectivity layer: Provides end-to-end data communication that may vary based on the type of session. For example, packet connectivity in HSPA+ does not involve the MSC, VLR; circuit switched voice in HSPA does not involve the SGSN, GGSN.
  • Services layer: Translates the data communicated in the Connectivity layer into services.

This is the abstracted functionality that utilizes the Connectivity layer to implement end-user friendly services. The interaction between the Connectivity and Services layers is a focus area in this white paper. These would include APIs at the network level for communication with the Connectivity layer, and APIs at the device for the services/apps on the device to communicate with the Connectivity layer on the device. Connectivity layer technologies in the Data plane include channel modulation, error correction algorithms and packet routing in conjunction with Authentication, Authorization and Accounting (AAA) and Quality of Service (QoS) elements in the network. Connectivity layer technologies in the Control plane include multiple access, duplexing and paging.

Service layer technologies in the Data plane include user level functionality such as voice, web browsing, videos, etc. with their own unique connectivity, content and interactivity requirements. Service layer technologies in the Control plane include Notification services for Application to Person (A2P) messaging. The elements of the Service layer both in the Data and Control planes are typically made available to mobile application developers using standard software and web development abstraction paradigms such as networking protocols, sockets, markup languages, etc. Connectivity layer technologies in the Data and Control planes are typically reserved for management by the service providers.

The separation of the technologies employed across the mobile network into Connectivity and Service layers enables services to be developed independent of the underlying Connectivity layer technologies. However, the limitations and capabilities of the Connectivity layer are not completely eliminated by the layering and an awareness of the underlying Connectivity layer in the Service layer enables improved performance of the total system and cross-layer optimization is the motivation for this paper.

The availability of mature application or service development platforms both on client devices and in the cloud is triggering an exponential increase in the number of applications available on mobile networks. Mobile network operators continue to provide services within their domain, the subscribers are increasingly accessing the Internet for services as well. The Internet services encompass communication (email, VoIP, instant messaging), entertainment, social networking, navigation or other services. The growing trend is for many of these new services being developed to be delivered by application developers using platforms that are located entirely outside of the mobile network bringing with them unprecedented challenges for the Service providers. These challenges include a reduced ability to control the kinds of applications that make use of a network’s resources and will add to the operator’s woes as the BYOD concepts take root as the devices are not optimized and customized over the networks.

Selling just a service: MNOS will be reduced to selling just a service from reselling packed services with subsidized handsets! It will become easier for the consumers as the customer gets to peel the onion and pay for just what he/she uses.

Sponsored Data, what does it mean? What does sponsored data mean for a customer or for that matter for operators. Earlier this year AT&T’s CTO John Donovan told The Wall Street Journal at the Mobile World Congress here that the carrier is considering a kind of toll-free calling for mobile data. The idea is that mobile-app providers whose services consume a lot of data, such as video streaming, could buy 1-800-like service from AT&T so that their users could access their service without using customer data plans. In essence, the app company providing the service would eat the cost of the data transfer instead of the consumer.

The concept is similar to 1-800 phone service that charges companies to provide free long-distance phone service to anyone calling that business. The benefit for consumers is that they don’t incur the cost of the call. But there is a catch here – what happens to small app developers out there in the market place? Is there a case of stifling of innovation? Possibly more than that, as Cassandra Heyne explains here.

Zahid has done a good job of explaining how this architecture works in the 3GPP perspective here in his Blogpost.

Indeed, the Apple iPhone and the App Store have changed mobile applications forever. Before Apple, there was no easy way for app developers to get their services onto a wireless phone. They had to go to individual carriers and convince the carrier the app was worthy of placement on the so-called “carrier deck.” And even once they convinced carriers to add their apps, they still had to go through a long testing process to get the app approved. At the same time, they had to go door-to-door to other carriers engaging in the same process.

It was a capital-intensive and laborious process. And it made the development of mobile apps almost impossible for very small companies. Apple’s App Store and the Google Android Market that has followed have created entirely new industries. All developers have to do is develop their app and submit it to a store. Within a very short period of time, the app can be available to millions of possible customers with very little investment. Now, it’s the consumer who decides which apps to put on his or her phone and not the carrier. And as result, the market for mobile apps is flourishing. The model has allowed startup mobile apps, such as Foursquare, to grow from nothing to a service with more than 15 million users in a short time.

The MNOs argue that they spend a lot of money to build their infrastructure, which other companies leverage to make profits. And for years they have complained that they should be compensated by these companies.  Instead, carriers argue that regulators have tried to institute burdensome requirements that prevent them from effectively managing their networks.

Indeed, wireless operators in the U.S. have already eliminated unlimited data plans. Instead, they’ve created tiers of service that allow them to charge customers for how much data they use. These plans are meant to generate more revenue for operators, but it’s also a way to control consumption of a limited resource. When resources, like bandwidth are unlimited, some customers are likely to consume more than if they must pay for what they use. In the end it is all about Data ARPU! 

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