Editor’s note: RCR Wireless News has teamed with Yankee Group to conduct a series of market surveys of RCR Wireless News subscribers to gauge their thoughts on various technology issues. RCR Wireless News will publish the exclusive results from our joint project, with Yankee Group’s expert analysis. More than 2,600 readers responded to the second wave of surveys. Congrats to Rob Kaufman, Associate Director at AT&T Mobility, who won an American Express gift certificate.
As mobile networks and handsets become more powerful, competition in mature markets stiffens and service portfolios expand rapidly, the management of subscriber data becomes a key area of strategic focus for mobile and fixed-mobile network engineers, I.T. staff, business planners, marketers and CIOs/CTOs. Yankee Group views the subscriber context information – which we define as the complete view of the subscriber’s preferences, billing information, profile, location, “state of presence”, calling patterns, usage trends, etc. – as one of the last areas of clear differentiation operators can point to in delivering highly personalized communications, media and internet services against nontraditional competitors such as Google Inc. or Yahoo Inc.
The operators’ approach to dealing with subscriber data is a generally referred to as subscriber data management (SDM). Today, subscriber data resides in a growing myriad of distinct places, including AAA systems, HSS/HLR, billing platforms, CRM systems, application servers, switches and network transport elements. The complexity of managing such a diverse set of information and data schemas can often lead to inconsistent subscriber profiles, which can create inefficiency, long delays in delivering new services – or worse – existing service disruption.
To gain a better understanding of the perspectives key decision-makers at mobile and fixed/mobile operators have about subscriber data management, Yankee Group teamed with RCR Wireless News to conduct a survey of 469 RCR service providers with either mobile only or fixed/mobile networks in commercial operation. The intent was to capture the latest viewpoint of SDM related to strategic direction, market drivers and inhibitors, data management techniques and investment plans. The high-level findings were hardly surprising: A whopping 73% of respondents declared that managing the quality and organization of subscriber data is “very important” to their strategic plans, while 53% agreed with assertion that “over the next 12 to 24 months we intend to move to a more subscriber-centric service delivery model”.
Only 3% of respondents viewed subscriber management as “not very important.” This overwhelming response confirms that SDM is an important topic. The tougher question is what to do about SDM, with whom, when and how.
Network operators who seek solutions to manage subscriber information do so for two reasons:
1) Maximize network efficiency: This goal has been pursued for several years, and can be accomplished by bringing data to a single point while creating an architecture that can easily serve that data where it is required in an efficient manner. These efforts help to drive opex savings by reducing the number of network database elements (such as HLRs) and consolidating outdated or end-of-life equipment.
2) Enable faster introduction of personalized services and new business models: The second, and presently more speculative driver, seeks to drive revenue sources by repackaging subscriber information to enable new business models (such as mobile advertising) or enabling third parties to access the subscriber information to deliver services.
Armed with a complete view of subscriber context, operators can create services for themselves and third parties targeted toward individual subscribers to drive higher ARPU. Yankee Group refers to the integrity and usefulness of this data as the quality of context and views it to be a critical enabler for a next wave of Telco 2.0 services and business models.
The good news and bad news for SDM vendors
One set of stakeholders is more interested than any of us in the results of a survey aimed at understanding the appetite for SDM. This group is, of course, the SDM vendors themselves. For the vendors, we have some good news and some bad news. First, the good: A healthy 21% of respondents plan to increase their spending on SDM solutions by at least 25% during the next 24 months. At the high end of the spectrum, 12% plan to increase spending by more than 50% of current levels. Ten percent of respondents plan to maintain current levels of spending, while 4% are planning to make initial investments during the next 24 months. Thirty-one of respondents did not have enough visibility into strategic plans to estimate SDM spend levels for the next 24 months.
An interesting cut of the data looks at those planning an increase of 25% on total spending, and their expectations of vendor capabilities, particularly in the areas of professional services and support. The biggest near-term spenders, who indicated plans to increase spending by 25% or more, are looking for integration and professional services support from their vendors. Eighty-nine percent of near-term spenders believe professional integration and support capabilities are either somewhat or very important. This is consistent with Yankee Group’s observations that SDM projects are complex undertakings and in-house expertise is often augmented with vendor assistance. Smaller vendors in this space should actively seek partnerships with large tier-one telecom equipment manufacturers or systems integrators with domain expertise.
The most popular driver for the SDM big spenders is increasing the ability to take advantage of new business model opportunities such as mobile advertising. Fifty-one percent of respondents chose this business goal as a very important driver of SDM spending.
So what’s the bad news? There were a couple of signposts that more market education is required in the SDM space.
When asked about centralizing subscriber and network data, 41% of respondents were “not sure” about the method planned. Twenty-three percent indicated they plan to use a combination of physical centralization and logical centralization (i.e., federation). Six percent are planning a physical-centralization approach only, while 9% are planning a federation-only approach. 
We also asked about interest in and familiarity with SDM solutions. Twenty-five percent of respondents stated that they were “very interested” in SDM solutions while only 5% indicated they were “very familiar” with the solutions. Sounds like it’s time to ratchet up the marketing and education efforts on the supply side and increase the industry analyst community’s – including Yankee Group’s – focus on it. Are you listening IBM Corp., Oracle Corp., Hewlett-Packard Co., Nokia Siemens Networks, L.M. Ericsson, Alcatel-Lucent, et al? 
Conclusion
This survey of American service providers shows significant potential for SDM implementations, with a well-understood value proposition within the service provider community. Service providers are looking to increase expenditure, but there remains a substantial lack of understanding on how to proceed. SDM vendors should embrace this opportunity, but also as a necessary precursor to the sale, educate the market on the benefits, opportunities and tactical implementation steps of SDM.
