Reader Forum: Mobile data traffic – managing network surges without throttling the customer

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 maintain some editorial control so as to keep it free of commercials or attacks. Please send along submissions for this section to our editors at:dmeyer@rcrwireless.comor tford@rcrwireless.com.
The combination of user-friendly devices, compelling content and acceptable download speeds has attracted mobile data consumers in droves. Network operators are struggling to keep up with this surge in demand, and are challenged to accommodate the rapid increase in 3G-plus smart phones, streaming applications and the merging of IP and voice traffic. To address network performance issues caused by traffic surges, savvy operators are exploring interesting new demand and supply side strategies. Though many strategies may be effective in easing the network burden, winning operators will solve the problem without sacrificing customer experience.
Incumbent operators have traditionally relied on data usage “caps,” charging consumers for each kilobyte over the cap. AT&T Mobility was the first to use such caps, followed by T-Mobile USA Inc. and Verizon Wireless. Sprint Nextel Corp. has yet to rule out this option. From a customer experience perspective, this strategy misses the mark. Why? Because customers are forced to choose a data usage plan upon subscription, often without a clear understanding of what new mobile-based applications may be around the corner. With social media sites like Facebook, Twitter, and YouTube attracting more and more members each day, mobile data consumption is clearly on the rise and will soon reach exabyte levels. Given these dynamics, customers with capped data plans will continuously need to “check the meter,” not an ideal customer experience.
Instead of relying solely on caps, operators should get creative about managing the demand side of the data surge. It is indeed possible to offer choices to customers without impacting the volume of data consumed. For example, application-based pricing, dynamic demand-based pricing, location-based pricing and end device-based pricing are viable alternatives to usage caps. These pricing strategies empower customers to manage how, when and where they use mobile data services-providing a more positive experience. Such strategies also provide a wealth of consumption data (e.g., location, time of day, duration of usage) which can be used by operators to identify network monetization opportunities and to make more informed decisions on capital expenditure investments.
On the supply side, operators have employed aggressive strategies to manage bandwidth. The most common solution has been to throttle bandwidth once users reach pre-determined data thresholds. While the throttling technique reduces the burden on the network, the customer experiences frustrating delays in accessing their data. Operators should consider supply side strategies that reduce the risk of poor customer experience. Intelligent routing, off-netting of backhaul traffic at the edge, and application-based content optimization are several such techniques. More elaborate technical solutions such as Wi-Fi handoffs can improve access speeds and drive even more impactful customer benefits.
Though data caps provide short-term relief, these practices detract from the customer experience and ultimately affect long-term customer loyalty. Other management strategies, both on the demand and supply side, can reduce network strain and provide a better customer experience. Operators will soon recognize that as demand for data-intensive devices and applications increases, consumers will be willing to pay a premium for networks offering a better, more differentiated customer experience.