Days of the “All You Can Eat” Bandwidth Buffet May Be Numbered

(Mar 13 2012) 4G , Backhaul , Mobile Broadband , QoE , QoS , Wi-Fi

1. Pressure of 4G Consumption has Operators Redesigning Unlimited Data Offerings

   It could be considered a sign of the times – 4G times – where the demand for bandwidth has finally exhausted supply.  It may also be an indication that the time has come for mobile network operators to take a deeper look at ways to monetize in a 4G world.  Regardless of perspective, the reality is that the days of “unlimited” mobile data plans are numbered.

   AT&T recently announced that it would be implementing bandwidth throttling for “grandfathered” unlimited mobile data customers who exceed usage limits within a billing cycle.  While throttling is not a new concept for AT&T, which began to throttle back its top 5% of bandwidth consumers in 2011, the new policy it has adopted is much less ambiguous and is likely to be better understood by customers.  The change will see customers of AT&T’s unlimited data plans having their throughput reduced if their data consumption exceeds 3GB for 3G/4G smartphones or 5 GB for 4G LTE smartphones.  Customers will be notified by text message the first time they exceed these limits.  AT&T stopped offering unlimited data plans to new customers in 2010.

   In its explanation to customers AT&T cites that the change is “in response to soaring mobile broadband usage and the limited availability of wireless spectrum.”  Verizon Wireless, which had also eliminated unlimited data plans last year, implemented a similar throttling for “top 5%” users in sites suffering from bandwidth congestion.  Possibly joining the fray as well, lower-tier operator MetroPCS has been reported to be considering changes to its unlimited offerings.  With no changes announced, Sprint Nextel remains the operator of choice for those customers who have a requirement for unrestricted and unlimited mobile bandwidth.

   For operators who choose to impose mobile bandwidth consumption restrictions, the challenge is how to implement them in such a way as to not negatively impact customer experience.  Whether throttling or billing for overage, it remains key for operators to clearly notify customers when and how they will be affected should their usage exceed their contracted limits.

   Those operators wanting to monetize their networks and navigate the complexities of managing in a 4G environment are facing an almost limitless demand for bandwidth in a world with dwindling supplies of spectrum and capital.  The traditional approaches of Policy 1.0 or basic Policy and Charging Rules Function (PCRF) are generally suitable for 2G and some 3G networks however they are unlikely to prove as effective tools where bandwidth consumption is wildly dynamic and rapidly changing such as is seen in 4G networks.   These 1.0 solutions lack the flexibility for operators to respond quickly to changes and almost always require some level vendor customization or software rework.

   For a 4G network operator the key to monetizing and managing mobile broadband is a Policy 2.0-based solution.  Policy 2.0 enables operators to create a powerful and virtualized environment with larger rule sets that can be implemented to manage not only bandwidth consumption, but also personalized products, services and user experiences.  This functionality is critical to address the impact of video and other 4G-enabled OTT services while maintaining optimal levels of customer experience. 

   An industry partnership between Openwave and Juniper is reflective of not only the importance of Policy 2.0 but also of the breadth of technology that will need to be employed to create these solutions.  Openwave’s CEO Mike Mulica, summarized the requirement quite succinctly.  "The ability to dynamically offer customized subscriber offerings while effectively managing network congestion is a necessity for operators as they continue to look for ways to attract and keep subscribers, while keeping costs down.”  And operators have yet another option for managing congestion available to them, Wi-Fi.

   Wi-Fi offload also presents an opportunity for addressing excessive data consumption.  While imposing usage limitations for users can be an effective reactive approach to user demand, transparent off-loading can also deliver rapid relief for network congestion and spectrum scarcity.  When combined with a Policy 2.0 solution, Wi-Fi off-loading can become an almost seamless experience for the user.  In the 4G World Mobile User Experience Summit at 4G World 2012, we plan to explore these best practices for managing and monetizing mobile broadband traffic growth while optimizing the 4G customer experience and removing costs from the customer contact center. 

   By Andy Mitchell, Editor, 4G Trends

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