How Service Providers Can Increase Profits from Mobile Data Services

Next Generation Communications Blog

How Service Providers Can Increase Profits from Mobile Data Services

By Mae Kowalke

When it comes to potential profits from the growth in mobile data use, network providers are sitting on a goldmine but often are not cashing in on it. What’s stopping them? Quite simply, networks that can’t keep pace with the demand.

There’s the temptation to apply brute force to this problem by simply building more network capacity the same way the existing infrastructure is designed. But it will take brains and brawn to be successful.

In this case, brains involve adopting technologies that enable on-demand quality of service (QoS) upgrades to deliver immediate, short-term boosts to network performance—for a fee. This is possible using dynamic QoS and traffic policy management to efficiently allocate network resources and generate additional revenue.

In other words, by intelligently applying technology that exists today, network providers can do more with the resources they already have, and get more leverage out of infrastructure investments.

Alcatel-Lucent calls this strategy application enablement, defined as “an industry vision that offers more effective ways to counteract the increasing gap between revenues and traffic growth” using “efficient high leverage network architecture that can provide low-cost transport for a wide range of new personalized multimedia services.”

“This solution can also generate additional revenues from application and content providers (ACPs), as well as from subscribers,” Alcatel-Lucent said in a recently published white paper.

To create high leverage networks and realize the benefits of application enablement, today’s providers must adopt new business models. Such models are based on the idea that trusted network capabilities can be combined with the web’s creativity to provide a richer application and content experience for consumers and enterprises.

“New revenue through new business models can result when opening these capabilities to a community of creative developers, in a managed and controlled way,” Alcatel-Lucent pointed out in its whitepaper. “This new revenue can help fund future network and web investments.”

Each of the two components in this integration—traditional networks and the web—bring strengths and factors to the table that can be used to create success. On the network side those factors include quality, security, privacy, reliability, billing, customer relationships and user context. On the web side, factors include innovation and speed.

In its white paper, Alcatel-Lucent lays out a vision for how application enablement can work. Subscribers pay a fee to get a temporary QoS upgrade—for a specified length of time, or for a particular application session (for example during a session of interactive gaming). Application and content providers such as Amazon or Hulu can also request guaranteed bandwidth to upgrade performance when online services are being delivered over mobile networks.

“Short-term QoS upgrades can be provided for a wide range of applications, including video on demand, IPTV, online gaming and Internet-based applications, such as video streaming, cloud computing or other business-related applications,” Alcatel-Lucent said in its white paper. “In addition, the dynamic traffic management methods used for on-demand QoS can support a broad spectrum of other personalized services in the years ahead.”



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