Isn’t it interesting that all discussions today around LTE focus on radio and network technologies; most see it as the means for either capacity expansion or cost reductions; while some encourage a few debates on the decline of unlimited data plans and need for tiered-pricing? The promise of new services & the evolution of business processes is all but lost in the noise!
As LTE deployments continue to make the headlines, the actual number of active LTE subscribers today is just over 1.2m worldwide. However, with committed roadmaps driving operator strategies, the numbers are expected to grow phenomenally; one of the recent reports I read from In-Stat projected 150m worldwide by 2014.
Interestingly, the roadmap to LTE today is driven by adding capacity, reducing per-bit costs, and remaining competitive — there is no evidence of new services or revenues. LTE is emerging as the technology to enrich the existing services and experience –- the good old candidates of multi-player gaming, video & TV and internet access. There is no focus on introducing anything totally new. And further, with early announcements on LTE-Advanced claiming 10X improvements with the next-generation technology (through enhancements like carrier aggregation & extended MIMO functionality), we can look forward to not only faster speeds & higher capacity but also an improved experience under congested network conditions.
It’s Not Just About Speed
But is that all? What happened to the promise of new service opportunities? LTE with its inherent lower latency and QoS attributes has much to offer. Besides, while LTE provides short-term relief to the exploding bandwidth demands, focusing on the capacity increase is not the cure. Bandwidth will never be unlimited. Traffic and costs are growing faster than revenue. Pressure on margins will accelerate and the focus needs to shift beyond the technology and cost to exploiting the underlying business potential.
I am personally excited by two possibilities. The 1st opportunity is to harness LTE to move from best effort to managed broadband experience. LTE’s end-to-end flat-IP infrastructure supports capabilities like QoS prioritization and deep packet inspection (DPI); these can be harnessed and combined with policy control engines, policy enforcement & optimization tools and subscriber databases to derive an understanding of what is happening in real-time and deliver flexible differentiated services. This will enable operators to respond to real-time network conditions and user requirements and help retool business models for the connected world. It is possible to upgrade from all-you-can-eat models into tiered models – e.g. differential access (usage or type of application/service) or preferential access (SLAs – guaranteed QoS, connections or other KPIs).
This can be a big step forward from today where most of the current implementations are limited to using tools for managing congestion, rationalizing network investment & improving user experience; but lack any real-time interaction with customers for service personalization & revenue enhancement. These efforts can help the network providers to not only establish a high-value role in the value-chain to demand a higher share of revenue but also provide the impetus to building the connected society by evolving connectivity to a higher plane.
The 2nd opportunity has the potential of bringing a different level of innovation. The very characteristics of the network – with its high speed, lower latency & increased capacity – can be leveraged to optimize the allocation of functions between the handset & the network. New services can be targeted through a collaborative interaction between the devices & application servers. The earlier failed attempts of moving the processing & memory requirements from the device to the network could now regain momentum. This could further accelerate the current world of cloud-driven solutions. It can also help accelerate the adoption of services beyond the smartphones into mass devices – more so as the number & diversity of devices with SIM cards increases with the emergence of the connected world.
Think Beyond the Basics
Both these possibilities (and maybe many more) require a fundamental shift in looking at LTE – the current focus on business processes is rudimentary and that has to change esp. as the value is shifting from networks to services. The networks need to evolve from the traditional connectivity-centric architectures to content distribution architectures and service-centric management functions.
This requires an upgrade of business & operational systems from silos to end-to-end service-centric capabilities and integration of various elements across – local area network, a wide-area network, advanced content delivery (incl media caching & management of residential gateways), mobile devices and even legacy elements for backward compatibility for voice. New functions for policy control & enforcement needs to be introduced and integrated with subscriber profile repository for sophisticated criterion application (at multiple levels from service, media, application, etc.) to optimize network behavior & user experience; and with billing to allow a plethora of new premium services. The key is to run advanced real-time business support systems for a huge variety of services through advancement in orchestration, delivery, monetization & settlement.
Now is the time to start planning for the end-to-end service-centric evolution – once the growth in subscribers happens, it will be too late and costly to change.