Reader Forum: The revenue conundrum with 3G/4G mobile services

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.
Data-hungry smartphones are generating unprecedented traffic growth as mobile users download more information and demand more interactive, high-bandwidth features. While handset manufacturers and Internet content providers have benefited immensely from this growth, it appears that mobile service providers have been relegated to the role of broadband access providers and are only capturing a portion of the overall 3G and 4G/LTE revenue opportunity.
MSPs are deploying expensive network upgrades to increase network capacity and keep up with demand, but revenue growth is not keeping up with their growth in expenses. Meanwhile, without differentiation in data plan offerings, MSPs are increasingly competing on price alone, eroding the average revenue per user.
Increasing MSP revenue starts by offering differentiated, network-based conversational video services (i.e. video ringback tones, video conferencing, video mail and interactive voice and video response “IVVR” services). However, these types of services historically required their own service platforms, composed of network interfaces, application logic and media processing hardware, resulting in three key challenges: service architecture complexity, high cost and mass-market adoption difficulty.
As more services are added into the MSP services portfolio, the integration and operational complexity of the services architecture increases, resulting in high costs that squeeze profitability. More importantly, if MSPs can’t offer these types of services at a competitive price, adoption will never take off.
To counter these challenges, MSPs need to implement alternative methods of revenue generation.
An alternative: A pure-IP-based service platform
MSPs need the ability to offer differentiated, network-based interactive services that can meet complexity, cost and adoption challenges. A pure-IP-based service platform is a prime candidate. An IP-based service platform uses next-generation technologies in the network architecture, offers hosted mobile services, creates new revenue streams and minimizes capex and opex expenditures compared to traditional service platforms.
An IMMS platform offers several features for potential revenue streams including differentiated two-way personalized audio and video conversational services, as well as enhanced one-way streaming services, passing through MSP networks.
In terms of two-way services, an IP media processing platform has extensive audio, video and speech processing features for many 3G applications such as audio/video ring back tones, IVVR and multimedia conferencing.
Take video ring back media, for example. Today, ring back tone services allow the called party to customize their ring back audio. A video ring back media service is the same concept, but can now use a custom video clip instead of audio.
Also, similar to audio IVR, IVVR includes video. This differentiated service enhances the user experience for many applications including customer service, multimedia service demos, surveillance applications, televoting in mobile TV and playback controls for video streams (pause, fast-forward and rewind).
IMMS also has the ability to enhance one-way streaming services, shifting the point of service monetization into the MSP’s control. One example of an enhanced one-way service is the incorporation of “video text overlay.” Video text overlay enables MSPs to insert revenue-generating text advertisements into a video stream before delivery to a 3G handset. This allows mobile operators to generate additional revenues from advertisers, therefore subsidizing operating costs and enabling MSPs to offer more competitively priced video services to users.
A pure-IP-based service platform lowers cost
The IMMS not only supports a broad range of revenue-generating service opportunities, it can also reduce costs given its integrated 3G-324M video support, a more cost-efficient way to support 3G-324M mobile video.
3G-324M delivers mobile video services to 3G mobile devices across the circuit-switched radio access network, compared to packet-based video services (often one-way video streaming) which can quickly consume expensive data plan minutes. While 3G-324M technology facilitates economical video delivery to over 500,000 3G mobile devices supporting this standard, the challenges in using this approach are found in the core network service delivery platforms.
Today, in the core network, there is a high cost in rolling out standalone 3G-324M video gateways between the circuit-switched radio access networks and the IP-based service delivery platforms. The alternative approach is to use economical (often already deployed) voice gateway equipment, along with platforms like IMMS which integrate the 3G-324M protocol processing inside the media server. By employing this alternative approach, MSPs eliminate the need for 3G-324M video gateways and can instead terminate 3G-324M video circuits using telecom equipment manufacturers’ existing VoIP voice gateway products. This solution transfers the 324M protocol processing to inside the media server, consolidating network elements and simplifying network management. The end result is a cost-efficient infrastructure that can reduce 3G-324M service platform price-per-port up to 50%, making it more economical to roll out advanced video services for mass market deployments.
A pure-IP-based service platform drives down complexity
An IMMS consolidates disparate service processing equipment into a single, cost-efficient carrier-class network element. Integrating both 3G circuit-based and packet-based (4G/LTE) mobile video networks, MSPs need fewer network elements, thereby reducing network complexity and providing increased call quality.
A pure-IP-based service platform encourages mass market adoption
By leveraging an all-IP services platform in the core, designed to deliver economical 3G-324M video services to a growing 3G subscriber base, MSPs are now able to cost-effectively deliver differentiated services at a competitive price, progressing toward the primary goal − mass market adoption.
In today’s telecom world where infrastructure solutions are complex, and not optimized for mass market rollouts, a pure-IP-based service platform positions mobile operators to generate new service revenues and drive lucrative mass market adoption. Pure-IP-based service platforms, such as the RadiSys IMMS, help MSPs increase their share of 3G/4G revenue opportunities by supporting enhanced interactive mobile video services and improving cost efficiencies through efficient, functional integration.