Reader Forum: Differentiation in an LTE world

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Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but we maintain some editorial control to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: [email protected]

Being in the telecom industry for many years has given me numerous opportunities to smile.

For instance, just the other day a mobile operator PR guy was quoted as saying, “Our LTE deployments give us a big advantage over our competitors.”

I smiled because of what the PR guy left out. To be accurate, he should have said, “Our LTE deployments give us a big advantage over our competitors, until those competitors catch up to us.”

Why am I so cynical? After all, as mobile users, you and I are going to love LTE. It feels five-times faster than 3G.

But we cannot afford to look at LTE with rose-colored glasses. While the technological advances that LTE brings are incredible, the best LTE can do for any individual telco is give it a temporary advantage in the period before its competitors catch up.

The specific advantages that LTE brings to operators are:

–Reducing an operator’s cost per byte;

–Easing wireless congestion;

–Delivering better quality of service and larger data volumes;

–And enabling advanced services.

How to differentiate in the LTE world

OK, so why am I knocking LTE before it’s even fully deployed? Because I want to make a larger point about the real differentiators that cause people to select one LTE service over another.

While LTE service is a fresh and exciting category today, in two or three years time, the technology itself will become a commodity product in the same way that pasta is a staple food today.

Long term, what sustains any product – from pasta to telecom service – is not the technology the product was built on, but the marketing and customer experience behind the product.

On the road to LTE excellence

Happily, revenue analytics professionals are well equipped to help with the marketing and customer experience aspects of LTE. I think we can make our biggest contribution in three areas: revenue risk management, business controls and marketing offers. And I’d like to discuss each of these in the context of three different stages in the deployment of LTE, namely: planning, rollout and business as usual.

Phase 1: The LTE planning

In the planning stage of LTE deployment is when you start planning what controls you will implement. It’s also the time when you begin your initial assessment of revenue risks.

Clearly one of the most crucial planning steps is around pricing. Early adopters of LTE such as AT&T Mobility and Verizon Wireless have put a lot of emphasis on pricing schemes to attract customers. Their biggest initiative here is shared data plans that put all family members under a single consolidated usage plan.

Of course, “friends and family” style plans have been around for three decades, but the newer capabilities of LTE may prompt operators to get far more sophisticated, using new elements such as:

–Pricing based on the QoS experienced by the user.

–Throttling schemas in which the users data bandwidth is reduced automatically when a usage threshold is passed.

–Data pricing based on network congestion.

As ideas like these take hold, they will increase revenue risks dramatically and it will be job of risk officers to do three things: measure those risks; gauge whether underlying BSS/OSS/network systems have enough dexterity to deploy those schemes; and deliver “go” or “no go” recommendations to management.

Phase 2: LTE rollout

The rollout of LTE service is a critical point because that’s where you’re proving to customers that the LTE service is valuable. The idea in this phase is to bring in new customers, win them over, convince them to upgrade handsets and plans and increase loyalty.

Now the LTE rollout shouldn’t only be successful, but fast. The CSPs who can roll out service quicker will get a lot of the early credit and positive market perception. The danger, of course, is that if there are rollout problems, it can actually hurt customer satisfaction and create a negative perception of the LTE service. So revenue assurance is key here to quickly squash customer experience issues such as over-billing or people not getting the LTE service they paid for. It’s also important to verify the correct “porting” of information from old systems to new ones e.g., HLR to HSS, errors here could cause denial of services and unsatisfied customers.

Phase 3: LTE business as usual

The final phase of LTE deployment is what I call business as usual. It’s here where detection and correction of revenue leaks get really important.

Now just because LTE has become an on-going service doesn’t mean things are static. Actually the service remains in a very fluid state because you are continually modifying and optimizing the marketing offer for customers.

In the United States that innovation is mostly around pricing today. The competitive battle is not over service quality – it’s happening around the price plan. The shared data plans for LTE appear simple from the consumer standpoint, but they are highly complex from an infrastructure standpoint. It’s hard to ensure all the billing and order components get synchronized – and that presents an excellent opportunity for revenue assurance to step in and show its value to the organization.

One other factor that looms in the business as usual phase is margin analytics (also called profitability analytics). The complexity of LTE service deployment and its marketing offers is such that service bundles can easily become unprofitable if usage and revenue streams are not constantly monitored, so that course corrections and adjustments can be applied.

Conclusion

LTE is a new enough technology that operators can still make money being the early adopter in their markets.

But whether your organization seizes that window of opportunity or not, revenue analytics professionals are well-positioned to support LTE deployment with their expertise in revenue risk assessment, business controls and the analysis of pricing plans/marketing offers

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About Author

Dan Meyer

Editor-in-Chief, Telecom Software, Policy, Wireless Carriers
[email protected]
Dan Meyer started at RCR Wireless News in 1999 covering wireless carriers and wireless technologies. As editor-in-chief, Dan oversees editorial direction, reports on news from the wireless industry, including telecom software, policy and wireless carriers, and provides opinion stories on topics of concern to the market such as his popular Friday column “Worst of the Week.”