Feeds

Telcos plan to capitalise on the data explosion

Show me the money...

Business security measures using SSL

MWC Barcelona is abuzz with predictions for the forthcoming explosion in mobile data, but more interesting are the predictions about how users are going to pay for it.

The predictions for data traffic over the next few years range from 25 times (Ericsson) to 270 times (Hauwei), and operators are starting to look at more interesting ways to make money from all those bits. Counting them is still a good first step, and Vodafone claims to be very happy with the progress of its tiered pricing model, which saw data caps lowered to provide the opportunity to upsell greater bandwidth to customers.

But mindlessly billing by the packet is a primitive approach when a plethora of companies are bidding to help network operators differentiate between traffic that makes them money and traffic that's serving someone else's needs, and bill accordingly.

Some of that is already going on, several operators (including 3 in the UK) provide access to Facebook outside the data cap, and few operators charge for the bandwidth consumed downloading content from their own application stores. The launch of the Galaxy Tab saw the UK's first cheap-rate tariff, with Orange offering separate caps for day and night consumption. But with greater intelligence going into the network, and deep packet inspection moving into hardware, the operators are poised to unleash a bewildering range of data tariffs that will probably save the conscientious shopper money while making price comparisons too complicated for the rest of us, and squeezing all the value they can out of the fact that all our data delivered through their servers.

Companies such as Flash Networks and Novarra are already intercepting that data stream to add operator-branded menus and toolbars, for the benefit of users obviously. Operators utilising Flash Networks can provide customers with a menu, accessed by sliding the web page aside, which shows their remaining prepaid credit as well as links to the operator's preferred search partner and other services, and Flash will even insert advertising based on an analysis of the web page (or video) being viewed. The company is adamant that such advertising is overlaid on the content rather than mingled with it, and that it only looks at the content as profiling of customers would be an unacceptable breach of privacy.

No such concerns at Cisco, which leaves such moralising to the operators while providing the tools to deliver content monetised in any way it can. According to Cisco that might include offering an HD version of a YouTube clip, for 1€, or charging content providers for priority delivery of their packets in exactly the way that the net neutrality crowd is so worried about – so a movie studio might pay an operator to ensure that trailers for its latest flick stream well. No one is suggesting that trailers from lessor studios could suffer from an "unfortunate accident" on the way to the customer's handset, but they're obviously going to be assigned a pretty-low priority.

Cisco reckons that 90 per cent of mobile video is coming from third parties, as opposed to operator's own services, which means the operator isn't making any money out of delivering it. Both Cisco and Flash will compress (sorry – "optimise", neither company will use the c word) video and audio for the device being used to view it, Flash even reckons that's good for the user as it provides a more-consistent stream, but mainly it's to the benefit of the network operator who can end up with 40 per cent less content to deliver.

Reducing costs is great, but Flash also reckons that by dropping commercial links into the stream an operator can raise ARPU (average revenue per user) by 15 per cent, with shortcuts to search engines and the like generating another 10 per cent, and straight advertising bringing in seven per cent of the existing ARPU. So increasing revenue by 22 per cent, just by providing a menu and advertising messages that customers want, apparently, they just don't know it yet.

Oracle, too, accepts that the days of flat-rate pricing are over, though some customers might decide to stick with such a tariff (at a much higher price than today). The majority of us will adopt something more complicated, but Oracle reckons it's too early to say what kind of model will dominate, and is focusing on ensuring that their systems provide the flexibility for operators to change arrangements at a moment's notice – "if Orange does it on Friday, Vodafone will want it on Monday". Oracle also has high hopes for the Wholesale Application Community as a revenue generator, both by allowing operators to sell applications and cut deals with developers for bundled bandwidth for their apps.

All of which means we'll end up spending more on mobile data, one way or another, whether we like it or not. ®

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Brit telcos warn Scots that voting Yes could lead to HEFTY bills
BT and Co: Independence vote likely to mean 'increased costs'
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
ISPs' post-net-neutrality world is built on 'bribes' says Tim Berners-Lee
Father of the worldwide web is extremely peeved over pay-per-packet-type plans
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
Blockbuster book lays out the first 20 years of the Smartphone Wars
Symbian's David Wood bares all. Not for the faint hearted
Bonking with Apple has POUNDED mobe operators' wallets
... into submission. Weve squeals, ditches payment plans
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.