OXFORD, United Kingdom-The commercialization of mobile data services continues its headlong rush as cellular operators look to differentiate themselves in the market. The heavy promotion of an ever-increasing portfolio of data services by many of Europe’s leading operators is setting the trend for others to follow.
However, behind this race to implement data services based on the Wireless Application Protocol (WAP), General Packet Radio Service (GPRS) or other wireless data technologies lies the ticklish matter of how operators will manage revenue-sharing agreements with content providers and charge users. One insider conceded that most operators would admit, although not publicly, that they are very poorly prepared to manage the necessary changes in the existing operations support system (OSS) with regard to data services.
This view is shared by U.K.-based Protek, an OSS application developer. “We’re deeply scared by it. Very few people can visualize the full span of the requirements to implement these services, including ourselves,” said Geoff Butcher, the company’s managing director. “To distinguish or differentiate between content and transmission needs a very different type of OSS. The provision of the mobile services needs to be managed on a call-by-call basis, with each call distinguishing on what the content was, where it came from and where it was going.”
Walled garden
There would seem to be general agreement that the WAP-based data services being offered today are, in reality, being run by operators as little more than large commercial pilots. Ann Walsh, a telecoms analyst with U.K. market research firm Ovum, said these pilots are still attempting to understand what consumers and businesses are prepared to pay. “It’s very unclear what money is to be made, but it’s important to both industries to find out the extent of opportunity. Some early results of these pilots have seen those involved not worrying too much about splitting any resulting revenues, which appear to be small anyway,” said Walsh.
The majority of operators are managing these pilots under the “walled garden” principle. This involves containing the user to a defined set of services that will be increased over time as more content providers are recruited by the operator. This model, which most operators admit is unsustainable, provides operators with a much easier OSS management issue than letting their WAP-enabled customers out into the wider Internet world.
However, some operators have admitted to allowing customers to access services outside their own walled garden and have tracked which sites are most visited. The operators then attempt to bring these content providers into their portfolio of “approved” service suppliers.
While these pilots have been running, the majority of operators have continued to use their existing OSS systems, and in particular the short message service (SMS) infrastructure, to manage and control billing data services. WAP-based services are now becoming more widely available, given the increased volume of WAP-enabled handsets, and operators are now more able to track which services a customer has accessed using a WAP gateway.
Third-generation issues
However, given that GPRS networks should make their first appearance this year, the OSS requirements are about to become even more problematic for mobile operators. Ben Chesser of Cluster Consulting’s London office maintains that the mobile business seems to be driven by what technology development happens at the network level, followed by the handset and then the back-end systems. “Most operators would agree that to implement a packet-based billing system by year-end will be a considerable challenge. The most likely route forward is toward a hybrid billing environment, where operators bill by the minute but estimate the number of kilobits per minute, and bill accordingly,” Chesser said.
Chesser also claimed that operators considering implementing GPRS technology must move quickly to ensure a return on investment before the arrival of UMTS networks. “This means that the window for GPRS is closing,” he said. “It will be the operators that are very cash rich, that want to use it as a learning experience for UMTS, that are pushing GPRS today.”
This breakneck speed of technological evolution can only leave those charged with determining an operator’s OSS strategy with the mother of all headaches.
