Monetizing LTE: Controlling Quality

In most countries, the auctioning of LTE or 4G spectrum has made headline news. Not only because it introduces a “high speed” service for the millions of customers who now own a mobile device, but also because those Mobile operators who have been successful in the so called bidding process has paid each government or regularity body literally billions of dollars for the privilege of being able to deliver such a service.

Read: Understanding Network Characterization: The Clear Benefits

And that’s just the start. Along with purchasing spectrum, they also have to invest heavily in the required network infrastructure that will enable such high speed service to then be delivered. So the big question is, how will these Mobile operators, who have paid so much to offer their customers 4G data service, than monetize their investment?

Related: Service Providers Must Cater to Growing Customer Expectations in the Race to 5G

QoS and QCI

The answer isn’t necessarily obvious. Today, most Mobile operators still maintain flat rate tariffs offering that not only bundle both voice and messaging but, more significantly, “all you can eat” data plans. With the introduction of 4G, this should slowly change. 4G networks offer the ability for Mobile Operators to control the subscriber experience by regulating the Quality of Service (QoS) assigned to specific service types. The technology introduces techniques such as QoS Class Indicators (QCI) to essentially assign the amount of available network bandwidth and so resources that can be applied to a specific service or a specific customer.

Read: The Numbers Speak: Data Services Equal Profit

This is particularly important in times of congestion. Right now, the existing 3G networks cannot distinguish between a key corporate customer trying to upload a business-critical document vs, say, a pre-paid customer trying to upload a video onto YouTube or Facebook. In both cases, the service these subscribers receive is best effort. 4G will now provide operators with the ability to set specific policy conditions, including Allocation and Retention Priority (ARP) metrics, that will also manage network resources during times of peak use and so congestion.

The Customer Point of View

So what will this mean for the customer? Initially not much will change. Most likely, Mobile operators will begin to target their key corporate customers, offering them improved, and even guaranteed, service quality. And of course in doing so, they will look to charge a premium.

Read: Mobile Data Services: Give Me Quality, Not Quantity

Depending on the success of such an approach, Mobile operators may then look to introduce similar offers for specific service types to all subscribers. What the end result will be isn’t exactly clear, but at a guess, we may well eventually begin to see Mobile operators finally looking to distinguish themselves from their rivals by marketing themselves more on quality than price.

Want to learn more about service assurance for greater control over customer experience, operating costs, and revenue opportunities? Take a look at Empirix’s service provider solutions for testing, monitoring and analytics.

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