These recent actions aren’t the first attempts by carriers to manage the usage of tethering applications.  This past May, US-based carriers demanded that Google restrict access to applications that allow tethering in the Android Marketplace. This restriction brought Google devices in line with Apple and Microsoft, who both don’t allow third-party tethering applications in their official app stores.

Even though BlackBerry, Microsoft, Google, and Apple all include native support for both wired and wireless tethering in their mobile operating systems, third-party tethering applications (often installed through non-official channels) are popular with users because they have allowed subscribers to bypass the restrictions included in most TOS agreements.

The news of this enforced subscriber migration to tethering plans has grabbed some headlines this past month, but the transition shouldn’t have been news to those who were using the TOS-evading apps. Both Verizon and AT&T were very proactive in communicating with subscribers about the fact they would be transitioned to a higher-priced plan.  Letters, page redirects, and text messages were all used to send messages to those identified using these tethering apps as early as March of this year.  From the Communications Service Provider (CSP) perspective, tethering creates massive amounts of data that must be carried on networks, and premium plans have been designed such that the revenue will offset the cost of carrying this traffic to ensure a sustainable business.

Given that tethering app developers charge between $10 and $50 for a software license, and that CSPs stand to gain potential additional revenues from tethering subscriptions, both developers and network operators have significant financial interest in tethering services.  We have very likely only seen the beginning of a cat-and-mouse game between app developers and CSPs, as developers will try to find new ways to have their apps go undetected on CSP’s networks.

The third stakeholder is, of course, the subscriber.  While the vast majority of subscribers respect the terms of their service agreements, others are trying to circumvent these rules, to the detriment of everyone else.  For mobile network operators who want to enforce their terms of service, Sandvine’s network policy control solution provides tethering detection, enabling CSPs to confidently and reliably conclude when a subscriber is tethering, and ensure accurate billing.

In the last 14 months alone, the two largest mobile carriers in the US,  Verizon and AT&T have both eliminated unlimited data plans, while the second largest cable internet provider, Time Warner Cable, has begun to lay the groundwork to introduce usage-based billing.  Comcast has already had a 250GB policy in place for several years. 

This trend is not limited to the US and many providers across the globe have begun to eliminate unlimited data plans and started to migrate towards variations of usage-based billing models in order to more properly match plans with subscriber usage and recoup the costs of transmitting more bandwidth-intensive applications. 

For instance, some operators are offering targeted application-based plans for enthusiastic social-media and email users. This parallels the mobile world practise of offering unlimited SMS, for example.  These applications don’t require as much bandwidth and can be offered to consumers for a fixed price.  In turn, subscribers value the cost-certainty of this sort of bundle and, may even save money because their plan fee doesn’t subsidize those who access the Internet more heavily.

There are more win-win usage-based billing scenarios, but not all consumers will be happy with the transition because they fear they may be charged more; yet, in reality, only 5% of all Internet users are using 50% of Internet bandwidth.  How can usage-based billing become widely-accepted and fair for everyone?

Lower –priced tiers for light users

Everyone agrees users who use more should pay more, but it is hard to defend usage-based billing if nobody ends up paying less.  A service provider should ensure pricing tiers and overages fees are proportionally set, as nobody wants to find out they are paying more money, but getting less service than someone else.

Plan variety

Not everyone uses the Internet in the same way.  Offering different plans will give consumers more choice and the freedom to opt-in to a plan that really reflects their usage and not that of others.  A movie buff or gamer will not be satisfied with a lower bandwidth-based plan that may incur latency and jitter.

Transparency

With broadband speeds exceeding 100 Mbps in some countries, 15 minutes of usage over and above a data cap could result in significant additional charges for the user.  Providing real-time advice of usage, via text or pop-up messages, at 60%, 80% and 90% of plan usage thresholds is one way to avoid bill shock and is essential to keeping subscribers informed of their usage.  Nobody wants to see “warning you are now at 110% of your limit”.

Price certainty

Customers need to clearly understand how much their Internet service will cost them each month and providers should offer an option for a truly fixed maximum price should they exceed their limit. In addition, measuring in terms of human behaviour (e.g. calls/movies/minutes vs. bytes) allows a consumer greater comfort in knowing they control cost.

Moving forward, variations of usage-based billing will likely become a sustainable billing model for fixed and mobile networks across the world.  If service providers are upfront in their communications with subscribers, then they can earn trust, win business and minimize churn.

The numbers are in, and all told, the combined events brought in more than 56,000 industry visitors, conference speakers, delegates, exhibitors and media.  Total attendance increased slightly year over year, proving that, in a period of frequent tradeshow consolidation, this event has staying power.

I presented during the CommunicAsia Summit, Next Generation Mobile Broadband Track, along with other industry contributors, as part of a session that tackled the over-arching theme of balancing demand with quality of experience (QoE).  Speakers covered issues such as scaling infrastructure to meet the increasing demand for high-speed data; how to effectively manage networks, and the resulting customer experience; the impact of video on 4G networks; and network policy control techniques to provide visibility into usage and enable tiered service plans.

The latter point speaks to my session where I set the stage by describing the current service provider landscape in which the competing challenges of leveraging capital infrastructure investment and finite network capacity, while attracting customers with differentiated services, are faced.

As Internet traffic profiles rapidly evolve and mobile data (like fixed) drive towards real-time ‘enjoy now’ entertainment, and away from traditional “enjoy later” applications, subscriber QoE demands skyrocket and these interactive, high-value communications must be protected.

I discussed network policy control techniques, treating the network of convergent conditions as a statistical process, and advising that implementation of network policy control solutions take place in a step-by-step framework:

• Planning (identifying how subscriber experience and policies will be base-lined and measured)
• Implementing (network policy control)
• Checking (comparing measurements to baselines and tweaking policies)
• Acting to deploy network-wide.

The theme can be summarized as “you can’t control what you can’t measure”.

I hoped to leave the audience with the message that a purpose-built network strategy is achievable as network technologies transition and subscriber behaviours evolve, through the network-wide visibility and astute decision-making made possible with network policy control (application-, device, subscriber-aware).

Another prevalent focus, both off (summit) and on the exhibit floor was cloud computing.  Mobile VAS Strategy, Satellite Communications, and Convergence were more topics highlighted in the conference program.

In addition to forward-looking discussions from the panel session floor, some notable launches were announced from the exhibit floor. The biggest buzz surrounded the Blackberry booth, where the PlayBook tablet in Singapore was unveiled, and the soon-to-be-released Bold Touch 9900 smartphone was announced; Huawei’s launch of the MediaPad, and smartphone launches by Nokia and Sony Ericsson.

The future of CommunicAsia at the swanky, new venue of Marina Bay Sands is bright and we look forward to another strong showing in 2012.

Simply speaking, there are three high-level ways in which service providers can increase their revenue:

• Attract more subscribers
• Deploy value-added personalized service tiers that generate incremental revenue (note that these could be monthly subscriptions like a social networking service or an on-demand service like prepaid unlimited usage for a day)
• Optimize the existing revenue base, for instance by giving subscribers reasons to shift to adopt existing premium packages

Each approach requires a fundamental understanding of subscribers, far beyond simple demographics like age and location.  Those facts play a role, but they’re woefully inadequate representations of an incredibly diverse market.  What’s needed is a detailed understanding of subscriber behaviour: What devices do subscribers use to get online?  Once they’re online, what do they do?  What clusters might emerge when you begin to group subscribers by common online characteristics?

To the mobile operators out there, information on how per-subscriber monthly data usage varies by application by mobile device could be very actionable.   Analysis can answer questions like what is the average number of videos watched by an iPhone user and how does that compare to the number watched by Droid users, or what is the handset with the most photo uploads per user?

Of course, device awareness isn’t just for the mobile providers – to all the fixed network operators who are reading this, do you know what percentage of your serviced households have more than one gaming console?  Did you know that all three consoles support Hulu and Netflix in the United States?  The same question could be asked about Roku, Boxee, Vudu, Ethernet-enabled televisions, and a long list of other devices.

As you can see, it is important to measure how many minutes of online video subscribers are consuming, and whether it varies with the device being used.  The correlation might be eye-opening, and might well be the secret to increasing average revenue per user.

Quick Use Case:

A Latin American mobile operator notices the following trends through the use executive network business intelligence dashboards:

• over 90% of their subscribers regularly use social networking
• that on average they currently use 22Mbytes per month of bandwidth
• that their increased quota “service”  priced at $2 per 200Mbytes of increased monthly quota is unpopular

As a result of this insight, the operator implements a personalized “Social Networking Tier” with a monthly subscription rate of $10 for all you can use Facebook, MySpace, etc. Launches an effective advertising and promotional campaign and sees rapid adoption of the new tier.  The subscribers are happy as they now have cost certainty on their most used application. The Mobile Carrier is even happier as they have a very profitable new service offering.

We live in a rapidly-changing world, and this reality means that untapped market opportunities are frequently arising.  Online services are constantly arising, device capabilities are constantly evolving, and subscriber habits are constantly shifting.  Every Internet user, whether they’re consciously aware of it or not, is looking for services that align with their unique set of needs.  Subscribers will find these services somewhere, and it’s up to you whether or not they find them on your network.

As you see below, this example taken from Sandvine’s Network Analytics product shows the total active handsets in a sample network and their corresponding bandwidth usage.

By having total visibility and control over their network, service providers can seize the opportunity to better manage and maximize their networks. For instance, they can consider partnering with device/application providers or offer subscribers more competitive and innovative pricing tiers. The marketing organization can also focus on delivering marketing campaigns that are tailored precisely to the segment that they wish to target. From an operational perspective, engineers can monitor and predict where and when QoE might be affected, due to specific devices and their demand on the network.

One use case that Sandvine has assisted with, using device awareness, is enabling service providers to offer a special tier to those customers wishing to tether their mobile devices. Tethering is the use of your cell phone or other Internet-enabled mobile device as a modem for another device, like a notebook or PDA. It enables you to go online from your laptop, for example, in situations where there’s no other means of Internet access. By being able to identify “tethering” devices, a service provider can offer a service tier or package that caters to the subscribers’ needs.

The case for device awareness will increasingly become a key component of proactive network management, helping service providers to maintain QoE today and plan for future expansions and new service offerings.

Last week’s Gitex Technology Week 2010 marked a special occasion.  Having started in 1981, the tradeshow celebrated its 30th year.  In 1981, the show had 3000 visitors and by contrast, 3500 suppliers participated in this year’s show.

To see how far we’ve come and to put things in perspective, let’s revisit technology available in the 50’s and 80’s:

• Just a few years before the 50’s, Thomas J. Watson, president of IBM, predicted that there would be a world market for maybe five computers.
• Not too long before 1980, companies at technology trade shows were still promoting the best punch-card available (durable, yet light weight), while the booth next door was touting their latest slide-ruler.
• In the early 80’s, Bill Gates thought that 640KB memory should be enough for anyone, yet he envisioned a computer on every desk and in every home.
• In the 90’s, we connected to the Internet using dial-up modems over voice circuits.
• Today, we use the Internet to carry voice and in our Fall 2010 Global Internet Phenomenon study, real-time entertainment and social networking showed substantial growth on mobile networks.

As you can see, Internet communications have evolved into an all-encompassing, semi-chaotic IP world, in need of some intelligent solutions to ensure the users’ experience is the best quality.
Sandvine’s presence at Gitex emphasized innovative solutions for service providers to both retain existing subscribers, by offering them better quality of experience;  and the ability to retain and attract new ones, by offering them differentiated services to meet their needs. Sandvine allows operators to utilize their existing infrastructure to its maximum by servicing more traffic, or by adding more subscribers.

Happy 30th Anniversary Gitex.  We look forward to the next 30 years of technology innovation!

In other words, “Whenever, Wherever, However”, reflects the consumer’s growing lack of distinction between wireless and fixed Internet usage.   For this very reason, for the first time we have compared the behaviours of fixed and mobile-data users together in one report.

What this means for service providers is that now, more than ever, predictive modeling, device awareness and personalized service tiers are critical to the proper management of both fixed and mobile-data networks in order to ensure their subscribers the best possible experience.
 
Fast Facts:

• In the United States, Netflix represents more than 20 percent of downstream traffic during peak times and is heaviest between 8-10 p.m.
• Real-time entertainment is unquestionably the dominant driver of data consumption on fixed and mobile networks worldwide, and is still growing substantially; up to 43% of total Internet traffic is real-time entertainment, up significantly from past studies.
• Social networking services like Facebook, continue to be a significant and growing proportion of mobile Internet traffic; in eight months the percentage of mobile traffic in Latin America attribute to social networking almost doubled, and in North America it increased by 33%.
• There is a wide variation between the average amount of time per month Internet connections are active;  for instance, in North America fixed connections are active for about 3 hours per day, whereas in Asia-Pacific fixed connections are active 5.5 hours per day.

For more information, please download the full report , or visit us for a personal overview of the finding in your region: Cable Tec Expo (New Orleans, Oct 20-22) Broadband World Forum (Paris, Oct 26-28)

Consider an average Internet user, henceforth known as the “Average Subscriber”.  Not only does this Average Subscriber fall prey to the same issues as the average human, but he or she (he and she?) accesses the Internet on some hybrid of a fixed and mobile connection, for 24 hours a day (although there is a drop-off overnight), visits every single website (some more than others) and uses every single application, service, and protocol available.  From a marketing perspective, this information is mildly interesting but not all that useful.

Marketers would find much more use in an analysis that focuses on specific groupings of subscribers, rather than an overall hodge-podge average.  For instance, instead of averaging the monthly data consumption of all users of a mobile network, it’s far more valuable to be able to compare the average usage of the Blackberry users with that of the iPhone users.  It also helps to look at both the mean and the median – the median is much more indicative of subscriber behavior, because the mean is invariably skewed by the heavy data users.  Many marketers would find value in going even deeper than this; they crave the ability to look beyond the device manufacturer to focus on individual models.  Alternatively, some would value ignoring the manufacturer completely and doing the breakdown by some device characteristic like screen size, or device age.

Instead of an Average Subscriber, marketers can now focus on groups like Average Blackberry Torch User and Average iPad User. The more characteristics are included in this persona analysis, the more focused the profile becomes.  Importantly, this type of analysis is performed with anonymous subscriber data – there’s no need whatsoever for personally identifiable information.

What does this mean for subscribers?  The better your service provider is at recognizing (and ultimately anticipating) your needs, the more likely it is that you will find services you love.  For service providers, this means the forward thinkers who are rolling out analytics solutions will put themselves in a position of competitive advantage.

A complex profile will be categorized by factors like:

• Device
• Service Plan
• Region

…and will include profile information like:

• Frequency of roaming
• Mean monthly data usage
• Median monthly data usage
• Top websites
• Top applications
• Active days per week
• Active hours per day
• Prime Time Ratio (a measurement indicating how active a subscriber is during peak evening hours versus the rest of the day)

To build these personas, a service provider must invest in a business intelligence solution specifically built to work with network data; and, critically, there must be a network platform capable of delivering subscriber-, application-, device- and location-awareness.  A service provider without these solutions and platforms is marketing to the Average Subscriber.

The other thing I noticed was the battery consumption on my phone.  I live in Tucson, Arizona.  As you can imagine it’s a much different place than New York in many ways.  But one of them for sure is the battery life of my iPhone.  In Arizona, my iPhone will go a few days between charges while on stand-by and most of the day if I am out and about using it to look things up, check my email, and even take the occasional call.  It’s kind of old school, but I still actually call people on the phone.

Anyway, while in New York my battery was lasting less than 4 hours.  When I checked the cellular data usage meter on my phone (its under the “about” menu for all the non-iPhone users) it showed my phone was transmitting more than 2 Mbytes every hour and receiving more than 2 Mbytes every hour and this was with it in my pocket, not doing anything.

So I tried all the well known tricks to extend the battery life like turning off 3G and using only EDGE, turning off the blue-tooth, turning off the Wi-Fi, turning off push notifications, and setting the email to manual mode retrieval so that it wouldn’t try getting my email in the background.  But none of these things seem to have any impact whatsoever.   I then even “disabled” my mail accounts on my iPhone as all I really wanted was my phone to be ready to receive a call as I was expecting an important one.

Even after doing all this, my battery life didn’t get any better nor did it stop my phone from using cellular data. As one could imagine by now I was getting quite frustrated and as I dwelled upon it I convinced myself the only other possibility was that my phone had a rogue application (i.e. virus) running on it.  So, I proceeded to do a hard reset to set it back to the factory defaults.  I learned the hard way that after doing this the iPhone has to be re-initialized by connecting to iTunes and having done this in a city park meant I didn’t have my laptop and iTunes nearby.  So I now had to find a store for my carrier to see if they could help.  Fortunately there was one nearby and they kindly re-initialized my phone.  The clerk at the store asked why I had done this, and I explained the story about my battery.  She responded that this is a common problem for all the iPhones in New York due to the over-subscribed network.

I don’t know if she knew what she was talking about or not.  We have all heard complaints about certain networks in New York.  So I don’t know if this was some kind of phone chatter due to my phone constantly re-attaching to the network or if it was something more malicious like a battery drain attack on my phone from the network.

This got me to thinking about what is going to happen to all the iPhone users on some of the recently announced capped data plans where subscribers are liable for data overage charges.  Personally I would be really unhappy to find out my iPhone was running up my bill even though I wasn’t using it.   I am not sure what various carriers plan to do here, but they certainly will need to be planning on not counting that kind of traffic towards people’s monthly caps as otherwise they will have a lot of people switching to another carrier.

Now, at Sandvine I know we have a set of solutions that mobile carriers could use to classify and meter the traffic to ensure that rogue traffic doesn’t create bill-shock as well mitigates network security attacks.  And my experience in New York clearly shows that operators cannot count all traffic equally as there is a lot of traffic that is beyond the user’s control.

Anyway, it will be interesting to see how this all unfolds.  Needless to say the mobile data space is in one of those interesting periods.

And since returning home, my phone is working fine.  So it wasn’t the battery nor was it a rogue application.  The best I can tell, it was something to do with the network.

So let’s talk about data or more specifically unlimited data and the growing number of service providers who are rolling out plans that better reflect user behavior. Its probably worth noting here that there were never really any completely unlimited plans, they all had some fair-use limit. The sea-change is in the overage charge model. O2 announced last week that they will end unlimited data plans for their smart phone customers later this month as did AT&T early in June (Source: http://www.engadget.com/2010/06/02/atandt-makes-sweeping-changes-to-data-plans-iphone-tethering-comi/). The million dollar question is “will users suffer”. And happily for Better Broadband the answer looks to be no.  “Based on current usage patterns, 97% of O2 smart phone customers would not need to buy additional data allowances. And according to the network the lowest limit of 500MB is 2.5 times the amount used by average customers on a monthly basis.” (source: http://www.thisismoney.co.uk/bargains-and-rip-offs/broadband-and-phones/article.html?in_article_id=506082&in_page_id=182&ito=1565)

If service providers can continue to offer fair packages that cover users needs (and then some) consumers can, and no doubt will, continue to embrace the variety of new and exciting things they can do with the mobile Internet.

How much data are you using? This really puts into digestible terms what you can do with a 500MB plan.

*Source: http://www.thisismoney.co.uk/bargains-and-rip-offs/broadband-and-phones/article.html?in_article_id=506082&in_page_id=182&ito=1565