Mobile Monetization Takes a Step Forward

By Brian Walsh, Service Provider Mobility Senior Marketing Manager

Among the discussions we had with global Mobile Service Providers in Barcelona at MWC 2014, here’s something that was certainly NOT breaking news: in the face of relentless growth of mobile data usage (see Cisco VNI), a top imperative expressed was to drive profitability by monetizing new opportunities.

What’s unfortunate is that the challenges continue to grow. Over-the-Top (OTT) competition continues to preempt new Service Provider (SP) services initiatives. New revenue partnerships with OTT and Content Providers remain elusive. And SP’s see more and more new sources of services substitution challenging their legacy voice & messaging services, for example, the WhatsApp move into voice services.

Of course, Service Providers also want to optimize current network investments while making strategic, targeted investments in SDN, NFV and Cloud networking as these technologies evolve in importance over the next several years.

Positive Steps in Barcelona

Cisco made several announcements re. the evolution of our Cisco Open Network Environment (ONE) that bring new breakthrough capabilities for Service Providers in pursuit of new topline revenues. Among these were new elements of our Quantum suite of virtualized software, namely: the Quantum Virtualized Packet Core, the Cisco Quantum Service Bus, and the Quantum Services Platform. These extend and enhance previously delivered elements like the Cisco Quantum Policy Suite.

With the Cisco Quantum Service Bus (QSB), SP’s can deploy a common bus architecture that allows mediation, connectivity, and communication among network elements such as the EPC, Policy, SON, and 3rd party applications – all of which can now interact through a standardized framework to leverage network resources on the move in order to enhance users’ mobile services and experiences. Think of delivering premium video content services that take into account – in real-time – current RAN congestion conditions, intelligence and visibility into the services flowing through the network core, and lightning speed access to each user’s policy profile of services entitlements.

In spite of widespread LTE deployment in markets like the U.S., networks are showing a fall-off in average LTE speeds due to significant increase in mobile video viewing. As a result, there are significant numbers of users willing to pay for content-based premium video experiences, as well as content providers anxious to sponsor/zero-rate the same for a revenue-share partnership. After all, as video viewing shifts increasingly to mobile, the entire video advertising model is at stake. Premium user experiences and better ad targeting are necessary for the Advertiser/Ad Network/Content Provider ecosystem to improve Mobile CPMs, and Service Providers have a key role to play in this.

We’ve seen AT&T among the first Service Providers out the door with Sponsored Data services offered with content partners willing to pay for data transport to users, and other SP’s have announced their intention to follow. Major content players are making the right steps in this direction as well, with Netflix recently announcing an interconnect deal with Comcast, and rumors abound of similar agreements with SP’s.

Furthermore, Cisco’s new Quantum Services Platform (QSP) includes a number of virtualized, cloud-based subscriber and network services that can be “chained” as needed by the Cisco Quantum Policy Suite to ensure optimal, secure, and controlled flow of a customer’s data traffic. For example, as part of such a video content provider partnership discussed above, a Service Provider could steer subscribers’ traffic to the virtualized QSP Video Optimizer for bit rate adaption of the video traffic based on available bandwidth in a congested RAN, all the while preserving the HD viewing experience.

The perfect storm appears to be arriving where content provider requirements and Service Providers’ unique capabilities are colliding. Service Providers with network assets like Cisco Quantum Suite can deliver services that uniquely respond to an increasing number of network events in order to enrich the user experience and generate new sources of revenue. Network conditions, 3rd party application requests, subscriber profile data, analytics information, device actions, etc. all become inputs for new, unique revenue-generating dynamic policy-based services. Service Providers: step up to the challenge!