4 important ways apps will change policy and charging
Operators are scrambling to establish a position in the value chain of mobile broadband. One important driver for this, as every presentation in the industry now shows, is increased demand for bandwidth. In particular, flat revenue relative to that demand.
The graph representing this has been presented ad nauseam over the past few years. With good reason: it’s an important market trend with significant implications for the industry.
Another sea change is occurring in our industry that’s equally important, if not more important: the ascendance of applications, emerging as a dominant means to access the internet. Consider:
In 2008, browsing commanded 80% of “facetime” (a measure of the time a user spends looking at an application). Almost overnight, that’s fallen to only 50%.
- Most conservative estimate shows app store revenue at 15 billion in 2013.
- 3.8 billion apps downloaded in 1H2010; on track to double the metric from 2009 (only 3.1 billion)
These numbers are abstract, but it’s easy to see the implications with simple use cases from a typical day. To paraphrase a recent Wired article by Chris Anderson: People wake up and check email. That’s one app. Browse the Economist, New York Times, or BBC during breakfast. More apps. Tweet to friends on the bus to work. Another app. Listen to Pandora during the work day. Another app. Look at Facebook on the bus home. Another. Watch a Netflix movie after dinner. Another. And so on. Significant time spent using the internet without ever opening a browser.
In short, “going on the internet” as a subscriber behavior is becoming less and less meaningful; it’s akin to a television viewer “going on the antenna.” Applications, and the specific content they deliver, is meaningful. This is important for operators, because it means that charging and policy for generic internet access is less and less meaningful. Happily, application context enables significant business model flexibility.
Convergence: anticipated for a decade, finally meaningful
Applications enable convergence – they enable easier management of state so that cross platform consistency can be more easily achieved.
A good example of this is how cable operators in the United States are using applications to enable delivery of media between platforms. The application can query profile and entitlement information maintained within the operator and ensures a well understood and consistent technical environment (codecs etc.) between devices for media delivery.
All major cable operators in the U.S. have announced apps that provide their subscribers a consistent experience between the television and the mobile device. These apps typically include both entitlements (if you subscriber to premium content on the TV, you can see it on the app) as well as DVR management so that a user can pause a movie on a television and pick up where he left off using a mobile device.
Charging Flexibility and Enhanced Control
Applications make flexibility, in terms of charging and policy, much easier.
Most service aware policy and charging solutions require a DPI and flow analyses. Such solutions aren’t strictly service aware in a direct sense; rather, they infer a service through layer 7 analyses. However, if an app is interacting directly with the PCC system, service-awareness is available by definition. Not only is this a more efficient architecture, it has a significant benefit otherwise unavailable: application context.
Intra-application context
Application context enables understanding of changes within the application that have policy or charging implications. A streaming app that offers both premium and standard content can directly indicate to the PCRF which type of content a subscriber is consuming, for example. This enables the operator to partner with the content provider, applying charging and policy rules without the administrative overhead of tracking specific content.
Inter-application context
Applications enable much easier execution of intra-service policies – policies that affect one application based on the context of a separate application. For example, imagine a user engaged in a face to face video chat session and receives an incoming VOIP call from a totally different application. An operator maintained PCC rule can enable users to determine if that incoming call can interrupt the chat session, or should be sent to a voicemail system. These rules can even be dynamically applied based on who the incoming call is from.
Need for enablers
An obvious implication is that to capitalize on any of the potential within applications, a robust interface must exist between the application layer and the operators PCC infrastructure.
A great deal of effort has already gone into defining the complementary, southbound, interface between the PCC and the network. And the Rx interface has some depth behind it in the context of the P-CSCF within an IMS infrastructure.
But there is a requirement for a must more robust expansion of the Rx interface to accommodate application signaling and entitlement queries across a broad spectrum of use cases.
Finally, applications enable much easier execution of intra-service policies that, for example, define how a second application interacts with a user when another application is active. For example, if a user is engaged in a face to face video chat session and receives an incoming VOIP call from a totally different application. A operator maintained profile can enable users to determine if that incoming call can interrupt the chat session, or should be sent to a voicemail system. These rules can even be dynamically applied based on who the incoming call is from.
Conclusion
Next generation business models are not about the application of creative new schemes within the context of legacy pre-paid and post-paid paradigms.
It’s about multi-dimensional charging and policy that is dynamically applied based on the context of a specific subscriber. The ascent of applications is an important industry evolution enabling operators to realize this opportunity.
