Roaming Hubs - Enabling Operator Agility in an Evolving Mobile Landscape
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1 Roaming Hubs - Enabling Operator Agility in an Evolving Mobile Landscape Mobile users are getting smarter by the day. It is generally accepted that a better quality service can be found elsewhere if their current provider falls short of the mark. Inadequate or overly expensive roaming services are notable examples of service shortfalls. The user retains the right to move elsewhere if they re unhappy with the level of service they re receiving, so it is in the operator s interest to address this issue. Operators will continue to risk losing customers if they cannot provide seamless, hasslefree connectivity, both at home and abroad. This white paper from BICS discusses the benefits of the mobile hub as an operational model giving the mobile operator real agility in dealing with a truly agile user. Continuous service the prerequisite of the mobile age For mobile operators, the process of extending a global roaming footprint is complex and time consuming. To offer continuous service to an increasingly data-hungry subscriber base, an operator must regularly conclude bilateral roaming agreements with other global operators. However, even after the completion of these negotiations, when agreements have been signed off and technical tests completed, some coverage gaps continue to exist. Operators therefore find themselves playing catch-up to remediate the shortfalls in their service offerings constantly seeking to enhance roaming footprints by extending their portfolios of bilateral agreements. The continuous development of new mobile services and technologies also necessitates the upgrading of existing roaming connections, as mobile operators face pressure to decrease cost structures. Smart users need smart service providers Mobile usage is ubiquitous; users are also more than likely to be well-equipped with anything from smartphones and tablets to PDAs and notebooks. The GSMA recently estimated that the number of mobile subscribers globally reached 3.2bn at the end of 2012 and should reach 4bn within the next five years. In light of this, mobile roaming is also likely to experience significant growth. For mobile operators intending to maximise the revenue opportunities associated with a growth in roaming traffic over the same period, a new approach is required
2 We are fast reaching a milestone of true global mobile roaming coverage The growth in roaming traffic increases the importance of three key aspects of an operator s mobile network and service offering: Global coverage Excellent quality Multiple Service Availability (Voice, CAMEL, GPRS, 3G & LTE) Technology is changing the shape of the market landscape and the dynamics of competition farther than any reasonable business plan can accommodate. There is now a far simpler route for operators to arrive at these goals Utilising Roaming Hubs! Given the rapid and constantly transformative pace of technological development mentioned above, the operator that stands still could be the one that falls behind. Technology is changing both the shape of the market landscape and the dynamics of competition spread across every corner of this landscape as far as, and probably farther, than any reasonable business plan can accommodate. The number of services available to users is increasing and each roaming service requires dedicated configuration and testing. According to the GSMA there are currently around 800 mobile operators active in the world today and that number is steadily increasing. As the global network of operators continues to expand exponentially, so will the number of mobile roaming partners and roaming requirements will become a higher priority to the carriers. Mobile users require availability of voice, messaging and data services in any 2G, 3G or 4G environment. Subscribers that do not have continuous access to basic telephony or data services have a propensity to churn. The expansion of Wi-Fi hotspots is educating users to find viable connectivity alternatives when their core service weakens, or when they have experienced a bill shock due to roaming charges. The growth of MVNOs with roaming capabilities can also serve to create greater promiscuity or churn in an already fragile market. Each of these market influences is addressed below. The continued development of new mobile services and technologies presents an additional challenge to operators, as roaming connections and agreements need to be updated more regularly. The associated complexities are especially challenging against a backdrop of heightened competition, tighter margins and the previously mentioned level of service development. The roaming hub for a roaming market one call does it all As the roaming environment becomes more complicated operators would be advised to investigate the potential business benefits of the roaming hub. This approach offers a best-ofbreed platform on which to establish a roaming footprint. It also offers considerable opportunity - 2 -
3 for cost savings and would likely mean that the roaming hub would perform testing on behalf of the operator. A roaming hub provides operators with an instant, efficient and streamlined environment for boosting their roaming footprint. Bilateral agreements, which can be costly and time consuming, are replaced in the hub environment with one multilateral agreement. The roaming hub provides one technical and one commercial relationship, based on industry best practice. This removes the need for multiple roaming agreements and a series of separate tests that are required to expanding roaming networks. The GSMA s Open Connectivity initiative, in which BICS was one of the first participants, was a welcome development in an industry-wide effort for mobile operators to truly realise the achievement of critical mass, and ubiquity of service globally. Deriving value through roaming managed and hosted services International roaming is a valuable source of revenue, the largest slice of which derives from inbound roaming. It is critical, therefore, that operators are able to control the number of inbound roamers that register on their network. Operators are increasingly looking to hosted roaming solutions to allow them to achieve this end. Hosted solutions remove the need to invest in new platforms, work on the core network, engage with costly third party vendors or endure the roaming agreement negotiation process. For a straightforward, fixed monthly fee, an operator can rapidly deploy a carrier-grade hosted roaming solution/vas for all of its roaming relationships. Such a solution enables the operator to control the amount of network signalling messages sent to home networks and allows better control of revenue-generating, inbound roamers on the network. An operator has access to a set of tools which enable the inbound roamer to register into the network, regardless of the rules that have been imposed by their home network. As well as the management and optimisation of inbound roaming signalling traffic; the hosted solution provides operators with tools to better judge wholesale telecoms decisions and generate cost savings as they deploy LTE networks. Global Roaming Quality With the dual challenges of European Roaming Regulation decreasing prices and eroding profit, in tandem with global competition growing more than ever, a decisive advantage for customers to choose one network over another is quality. This is one of the reasons why the Global Roaming Quality (GRQ) Framework was established by the GSMA. Hosted GRQ solutions today have matured and are gaining ground in the mobile landscape, where Quality has become a critical guarantee and strategic differentiator. Based on global GSM-probe networks, - 3 -
4 they allow full end-to-end monitoring of roaming quality and customer experience. Mobile operators realise that subscribers pay for a service that they expect to be delivered with a high level of quality, and failing to provide a quality-focused service may become an inhibitor that may impact an operator s reputation from the short to long-term. The move to 4G/LTE LTE is now emerging and ramping up the efficient and cost effective delivery of mobile data to subscribers. With a complete new all-ip technical architecture, new Signalling protocols based on Diameter and over 30 different spectrum bands for LTE set to be available, global roaming for LTE will be inherently more complex than its predecessor. With roaming revenues under pressure, international operators are working hard to ensure that roaming is efficient and, more to the point, profitable. The main challenge arises from the creation of a completely new international roaming environment for LTE. Establishing seamless 2G and 3G roaming across the world took over 20 years, but this whole ecosystem will need to be upgraded as LTE comes into the picture. New agreements and connections between mobile operators supporting enhanced IP capabilities will be required for LTE Roaming while the use of roaming hubs could help to accelerate its roll-out. IPX Up until now traditional time division multiplex (TDM) has been adequate for supporting critical services voice and messaging but operators are now expected to deliver a wide range of data services of the highest levels of quality. With the roll-out of 4G/LTE networks, two of the key mandatory service needs are IP interconnection and roaming. Operators that do not realign their capabilities to provide these, will not be able to take advantage of the opportunities they both offer. The GSM Association s IP exchange (IPX) was introduced to replace legacy TDM and to support the new wave of IP-based voice, video and real-time multimedia applications. IPX can fulfil a critical need, both now and into the future, for both fixed and mobile operators. IPX can be viewed as a private IP cloud, offering a much more secure ecosystem; one that is closed instead of open, which offers more secure and reliable connections than the best effort that the internet can offer. IPX also enables mobile operators to work more closely with OTT players encouraging them to use IPX to interconnect with them. IPX provides a private and secure IP foundation that allows operators to expand their global voice and data services. BICS has pioneered the use of this technology with global carriers and its IPX solutions have already been adopted by its customers. By partnering with the right service provider, operators are able to seamlessly deliver critical traffic at the highest possible - 4 -
5 levels of quality, while also meeting the increasing bandwidth and demand for new data services in a cost effective way. Roaming choices Wi-Fi Mobile operators are increasingly adopting Wi-Fi and integrating the technology with existing, and future radio standards in their networks. Rising mobile broadband usage is seeing operators evolve from voice and messaging providers to suppliers of wireless broadband connectivity. However, as Wi-Fi becomes part of the domestic mobile experience, mobile operators are seeking a consistent end-user experience for their roamers. International operators are keen to retain their roaming customers, even if they are on low cost Wi-Fi connections, rather than face losing their custom to a local Wi-Fi hotspot provider. Operators will, of course, look to platforms which provide their roaming customers access to premium hotspots (hotels, airports etc.) as they seek to access the internet. However, the key to this will be that the handover from GSM to Wi-Fi access is straightforward and that the access provided is affordable. This operator requirement will see the rise of roaming hubs that offer one single 2G, 3G, 4G and Wi-Fi platform, establishing peerings with other roaming hubs and Wi-Fi aggregators ultimately providing economies of scale and more affordable access to international 2G/3G/LTE/Wi-Fi roaming coverage. Operators can make bilateral roaming agreements between each other, but a more cost effective strategy would be to use a third party managed service that would guarantee roaming and interconnect with operators worldwide. Roaming hubs can enable interconnect agreements between individual operators, their respective groups and the global community of wireless carriers. Network traffic is routed from one service provider to many destinations or internetworking partners via a single agreement. The hubs effectively steer mobile traffic with little, or no, impact on subscribers and allows operators to negotiate impactful Inter Operator Tariffs (IOTs) for roaming, protecting their revenues, while offering continuous quality of service to international travellers. MVNOs The MVNO market is developing rapidly. According to a Wireless Intelligence report from June 2012, there are now 812 MVNOs globally, and this is increasing daily. European Union legislation, designed to cut wholesale and retail data roaming rates, has enabled MVNOs to better compete in the roaming space. Key growth markets are currently the UK, the Netherlands, France and Israel. In the UK alone there are some 40+ MVNOs, including supermarket brands like Tesco Mobile and service providers such as Lycatel and Lebara Mobile, catering to resident ethnic communities. These MVNOs are providing affordable mobile services to niche markets not specifically served by incumbent mobile operators
6 National MVNOs will be joined by roaming-only MVNOs. There are many forms of MVNO, notably Mobile Virtual Network Enablers (MVNE s). Lacking a mobile infrastructure or mobile license, an MVNE typically handles customer service, billing and mobile handset management. MVNOs can acquire national voice and SMS services at a discount of around 50 per cent on retail prices. However, new legislation allows roaming services to be bought at a discount of per cent on the retail price cap. Roaming-only MVNOs will be able to enter the market in July 2014, through providing voice, SMS and data roaming to subscribers who want to stay with their existing operator for their domestic services. Single and dual IMSI technology, which separates the provision of domestic and European roaming services while retaining the same number for both, will play a crucial role in assisting MVNOs in the roaming market. A roaming hub that can flexibly offer single and dual IMSI roaming will enable MVNOs, and operators alike, to gain access to hundreds of international roaming agreements and market best IOTs in a platform that is completely managed by the roaming hub; enabling straightforward and comprehensive international roaming for subscribers. The regulatory challenges of European roaming The final point to address is the European Union s recent legislation on international roaming, and the resulting Euro tariff. This legislation has had a dramatic effect on the mobile industry and its international roaming revenues. European Union laws, passed by the European Parliament in July 2012, stipulate that international mobile calls will be charged to the end user at 29 cents a minute for making a call and 8 cents a minute for receiving a call - while Internet access was charged at 70 cents per MB. By 2014 these figures are set to be cut to respectively 19 cents and 5 cents per minute for calls and 20 cents per MB for internet access. Reduced retail prices for roaming have made it harder for operators to negotiate beneficial wholesale prices with each other. The legislation also empowered users to select a mobile operator of their choice for roaming. This will place pressure on market incumbents to enhance their roaming infrastructure, and expand their reach internationally, to prevent their own subscribers from selecting another operator for the roaming needs. These factors create a challenging and competitive environment for mobile operators in respect of international roaming. However, this will not impact the market negatively. It will simply ensure that operators seek more value from roaming hub providers
7 Conclusion There is no doubt that data roaming is rapidly increasing. The number of device types deployed is proliferating and the demands and expectations of users are becoming increasingly sophisticated. The level of tolerance of anything less than excellent and seamless service is diminishing; those days are gone. Subscriber loyalty is now only won and kept on the basis of cutting edge service delivery. As operators prepare their networks for new devices with new capabilities, increasing numbers of users and increasingly tough competition, the roaming hub offers an almost failsafe solution to the provision of a seamless service, combined with a reduction in cost and complexity if hosted services are brought in as part of the operational mix. BICS holds a key position in the roaming hubbing landscape, not only does it have long-term experience in the hubbing environment due to its pioneering hub development in SMS hubbing, as far back as 2003, but also in recent years it has developed both Dual IMSI, and later Single IMSI roaming hubbing products. Such a multi-faceted roaming hubbing portfolio enables BICS to have an open, wide-ranging discussion and engagement with potential, and existing clients alike, to ensure that the products it provides, address and cater for their needs today, and tomorrow. *** About BICS BICS delivers best-in-class international wholesale solutions to any communication service provider worldwide. Through its Mosaic portfolio, a comprehensive, flexible and innovative suite of solutions designed to be used individually, or collectively, BICS meets the existing and future requirements of the global telecoms industry. Our passionate and creative teams located in Brussels, Bern, Dubai, Singapore and New York, continuously strive to provide our customers with the highest levels of quality, reliability and interoperability enabling them to maximise their end-user value. With our successful consolidation strategy, and a continuing focus on technological advancement and innovation, we have achieved a world-leading position in the international Voice and Mobile Data markets. For more information, please visit:
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