Policy and the New Application Ecosystem. The role of policy control and service quality in the applications value chain

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1 Policy and the New Application Ecosystem The role of policy control and service quality in the applications value chain

2 POLICY AND THE NEW APPLICATION ECOSYSTEM 2 Contents Introduction...3 The Promise of Rich Communications Services...3 It s an App World: The Abundance and Convenience of OTT Applications...4 The Role of Dynamic Policy Control...5 How it Works...5 Policy Control in Open Applications Use Case Examples...8 Service Provider Owned IMS Applications...8 VoLTE and RCS Services...8 Partnerships with OTT Vendors...9 Sponsored Data...9 Preferential QoS...9 Inline Notifications and Monetization...10 HD Video...10 Summary...11 The Power of Amdocs Policy Control in Applications Monetization

3 POLICY AND THE NEW APPLICATION ECOSYSTEM 3 Introduction The mobile industry has seen a dramatic increase in mobile connected devices, such as smartphones and tablets, in addition to a growing list of compelling applications targeted at mobile subscribers. Consumer and business users now have numerous device options for accessing data services, whether it s access to their favorite video site on their tablet or streaming music over their smartphone. In addition, these users are increasingly turning to the burgeoning application ecosystem for their entertainment and messaging needs. In some cases, these apps are provided by their service provider, but increasingly they are provided by other vendors, typically referred to as overthe-top (OTT) content providers. Regardless of where users choose to get their apps, service providers are in a unique position to manage and differentiate the application experience. They have rich knowledge of customers and resources that resides today in multiple systems, including business support systems (BSS), charging, subscriber data management and policy systems. This includes real-time and historical data about their customers, their plans, usage habits, location, what they are doing on the network at any given time, as well as which applications they are using and on which device. Of equal importance are the service provider s network assets, their investment in high-capacity networks, their ability to deliver quality of service (QoS) and their real-time knowledge of current network conditions. The shift towards a more open and accessible application environment comes at a time when service provider deployments of Rich Communication Services (RCS) are just getting underway. At the same time, mobile subscribers are turning to OTT messaging and entertainment applications like imessage, WhatsApp, Netflix and others. A key challenge for service providers is how to stay relevant in this application value chain by providing subscribers with unique value beyond the data pipe that delivers these applications. This paper explores the role of dynamic policy control in enabling service providers to fully leverage their customer and network assets to differentiate the application data experience for their subscribers with network quality and personalized contextual awareness of the subscriber while at the same time increasing their relevance in the open applications value chain. The Promise of Rich Communications Services The way subscribers communicate over the mobile network has evolved from simple SMS text messages to more engaging and informative types of communications that include pictures, videos and location information. To meet evolving consumer expectations, service providers and standards groups are working together to enable a new set of services called RCS. RCS replaces legacy Signaling System 7 (SS7) services and is delivered over the all IP Multimedia Subsystem (IMS) network. While RCS is the base for multimedia services over both 3G and Long Term Evolution (LTE), it is often viewed as part of the broader voice over LTE (VoLTE) service offering. VoLTE provides the basic voice call over LTE, and RCS is the means for adding rich communications to that service such as enhanced instant messaging, video calling, file sharing and voice calls. RCS and VoLTE together provide a comprehensive set of services for LTE, from basic voice calling to a full set of rich communication services. Because of its all IP nature, LTE enables service providers to combine multiple communication channels in new and interesting ways. Subscribers can have a simultaneous voice and white boarding session, or watch turn-by-turn navigation applications during a voice call. The underlying network that powers RCS is the IMS core, which handles authentication and the associated charging for RCS services. IMS defines the requirements for RCS features such as presence, location base services and the connections to other devices on different networks. Service providers that deploy IMS-based RCS can offer robust infrastructure and messaging capabilities with strong security features. They can also leverage policy-based end-to-end bandwidth management, QoS guarantees and real-time charging. While there has been momentum in early deployments of RCS, with service providers such as Vodafone, Telefonica 1 and MetroPCS 2 now offering these services, it s clear that RCS is still in its initial stages and the ecosystem is not yet fully matured. Some service providers are looking for more immediate opportunities to leverage partnerships with OTT providers to offer enhanced communication and entertainment services.

4 POLICY AND THE NEW APPLICATION ECOSYSTEM 4 It s an App World: The Abundance and Convenience of OTT Applications Service providers such as Telia 3 in Sweden have embraced voice over IP (VoIP) solutions, going as far as to offer special VoIP packages. Deutsche Telekom is another example of a service providers embracing this new OTT ecosystem. In 2012 they partnered with online music provider Spotify to create special service bundles that included unlimited music streaming and implemented special metering capabilities that ensured Spotify services were not counted towards a subscriber s data allowance. According to research conducted by Amdocs, already 70% of service providers today view OTT players as potential partners, rather than a threat 4. By offering access to these services, service providers turn potentially competitive relationships with OTT players into mutually beneficial business partnerships that ultimately benefit the end user with an enhanced user experience. However, these OTT applications can pose challenges for service providers. They can use large amounts of network resources, particular for streaming media apps, but don t provide inherent revenue generating opportunities for service providers beyond the data usage incurred by the subscriber to access and use these applications, for example as part of a tiered plan. In essence, the content providers offering these applications use the network as their personal place of business but don t pay rent or upkeep. Service providers need to ensure they can effectively manage their network resources and monetize these applications in new ways, for example by partnering with OTT vendors. By leveraging their extensive network assets in 3G, 4G and fixed networks, and customer intelligence assets, service providers can provide subscribers something OTT players can t superior quality of network experience, and one that can be personalized based on the customer, for example their current quota, plan type, the device being used, or the applications they access most frequently. How can service providers capitalize on the OTT opportunity? By offering differentiated services to their consumer and business users, such as toll-free (or unmetered) access to services, prioritized QoS, dynamic upsell offers and much more, service providers become more than just a data pipe provider. They can access new revenue streams and sources of profitability. 70% of service providers view OTT players as potential partners, rather than a threat 74% of OTT providers are willing to expose and share core assets to achieve these partnering goals OTT providers also share this view of a collaborative and open mobile environment. In fact, 74% of OTT providers are willing to expose and share core assets to achieve mutually beneficial partnership goals 5. With strong support from both the service provider and OTT side, it is clear this combined approach is the way forward and capabilities in the network are required to facilitate these new relationships. OVER THE TOP APPLICATION VENDORS USE THE NETWORK AS THEIR PERSONAL PLACE OF BUSINESS WITHOUT PAYING RENT OR UPKEEP.

5 POLICY AND THE NEW APPLICATION ECOSYSTEM 5 The Role of Dynamic Policy Control Policy control is fast emerging as a key capability to support and manage this new partner ecosystem. Policy is vital in the race to keep up with subscriber expectations and embrace today s open application ecosystem. As a technology, policy control has typically been grounded in the network control domain to manage how and under which circumstances a subscriber or device can access network resources (such as bandwidth and QoS). It is by nature both dynamic and intelligent. It leverages a flexible business rules engine that applies rules or policies to instrument gateways and other enforcement points in the network based on subscriber usage against their quota, whether they are roaming or not, in which case policy may apply speed bumps or redirect the subscriber for top up. It features tight integration with data plane elements such as packet gateways, deep packet inspection devices and optimization servers. Increasingly, policy control has become the much needed bridge between network and IT systems to integrate now with online charging, customer databases, the product catalog. This northbound integration and IT-awareness enables many new monetization use cases that rely on policy control s inherent real-time awareness it is network-aware, subscriber-aware, device-aware and now applicationsaware. By pairing policy control with enhanced traffic and application detection capabilities, such as those provided today by deep packet inspection or optimization technology solutions, service providers can offer a key value added feature to OTT applications enhanced QoS on a per application basis. This allows service providers to offer their OTT partners a means of differentiating their applications using network quality to provide a premium experience. It provides user value above and beyond the data pipe, and the opportunity for service providers to monetize premium experiences with their OTT partners. How it Works Advanced policy control enables service providers to dynamically manage and assign network resources such as QoS to specific applications, meter usage on a per application basis, and prompt real-time notifications to subscribers based on contextual triggers, such as breaching a quota threshold, promotions, location and roaming status. The intelligent rules engine is the cornerstone of the policy control solution. It leverages multiple inputs such as subscriber entitlements, application detection and network conditions to trigger policies that apply improved QoS, access to premium services and more. As such, policy control provides essential capabilities to help service providers monetize the next generation of communication and entertainment applications in real time.

6 POLICY AND THE NEW APPLICATION ECOSYSTEM 6 Policy control interacts in real time with southbound policy enforcement points such as packet gateways, DPIs and optimization servers. In addition, policy control integrates with IMS and application servers over standards-based interfaces such as Rx, and SOAP-based web services APIs for OTT application platforms not conforming to 3GPP standards. Below is a detailed outline of how policy control interacts with the network and applications, creating new opportunities for partnerships and revenue generating service offerings. There are two general approaches to offering these enhanced applications through a service provider network. Service providers can either provide access to their own managed application such as such as VoLTE services, or they can offer access to OTT applications such as Netflix or Skype. In both cases, the policy server relies on application detection and initiation from the network to identify the application, after which the policy charging rules function (PCRF) can apply differentiated quality of service. Example 1 Access to Service Provider Applications In the case of providing IMS-based services such as VoLTE, the subscriber directly accesses the VoLTE application. This initial application request is done over the IMS core through signaling channels such as Rx. The VoLTE application then initiates the start of the session and sends a QoS request to the policy server/pcrf. PCRF makes the appropriate policy decision around QoS levels, taking into account subscriber and network contexts, and sends the decision down to the network enforcement point(s) through the Gx interface. The Gx interface can also meter the application usage against a subscriber s data quota, for example as part of a temporary promotional plan with only a certain amount of HD video access provided. FIGURE 1: PCRF INTERACTIONS WITH IMS AND OTT APPLICATIONS VoLTE P-CSCF APPLICATIONS IMS OTT RCSe AF Rx SOAP APIs HD VIDEO ONLINE CHARGING Sy POLICY CONTROLLER DATA BEARER Gx Gx Gx / Sd GGSN / P-GW DPI / TDF OPTIMIZATION INLINE NOTIFICATION OUT-OF-BAND APPLICATION INITIATION IN-BAND APPLICATION DETECTION

7 POLICY AND THE NEW APPLICATION ECOSYSTEM 7 Example 2 Access to OTT Applications Service providers can also offer subscribers access to OTT applications through in-band application detection, meaning subscribers access the application through the data plane. This method of providing access to applications removes the necessity of having to build integration between the application and the PCRF, essentially bypassing the Rx interface. This method opens up the mobile network to a multitude of OTT providers with ease of application usage without the dependencies of complex integration. There are two ways this scenario can work, the first one being the case of an OTT subscription offered through the service provider. In this scenario, the subscriber connects directly to the OTT application. Once the application has been accessed, the traffic detection function (TDF) in the network is made aware of this application usage and sends a notification to the PCRF through the Sd or Gx interface. The PCRF then determines the appropriate QoS rules and sends a decision back down to the network enforcement point(s) through the Sd interface. If the service provider is aware of the application subscription and the associated QoS levels, there is no need for an API between the application and the PCRF;the Sd interface is all that is needed to support differentiated QoS and metering. In the case of an OTT subscription offered directly through the OTT provider, such as a Netflix subscription, an API into the PCRF is required for the PCRF to provide the differentiated QoS. Whether the application initiation and detection is done through signaling channels for out-of-band detection, or through in-band methods, the PCRF remains an integral component that determines the QoS levels that these applications will receive. In essence, you can t apply application-specific quality of service without a policy server in place, making it the cornerstone of premium applications enablement. Below is a summary of how the PCRF, in this case the Amdocs Policy Controller, interacts with network and application elements to enable value added services: IMS Applications: Using the 3GPP Rx interface, the Policy Controller interacts with the VoLTE P-CSCF and other RCS application servers to provide the appropriate QoS for IMS applications, such as VoLTE and RCS services Non-IMS / OTT Applications: For applications not supporting 3GPP standards, a SOAP-based Web Services API is used to enable integration with the PCRF. This allows non-ims applications to leverage enhanced QoS, charging and optimization rules in the network enabled by the PCRF. Network Integration: Policy controller supports 3GPP standard Gx and Sd interfaces. These interfaces allow the Policy Controller to signal QoS and charging parameters to policy enforcement points such as GGSN / Packet Gateway, DPI, TDF and optimization engines to provide preferential QoS to certain applications and provide convenient upsell offers to subscribers. Charging Integration: Policy controller supports the 3GPP Sy interface to allow integration with online charging systems to provide realtime metering of data usage and billing reconciliation with OTT partners. It is important for policy control solutions to support standards-based interfaces defined by organizations such as 3GPP and GSMA. Using interfaces such as Rx, Gx and Sd is an important step towards creating an ecosystem of interoperability with other network vendors. However, it is imperative that policy control solutions offer proven and broad interoperability (IOT) experience with a multitude of equipment types and vendors to ensure seamless interworking around key use cases, and accelerate time to deploy.

8 POLICY AND THE NEW APPLICATION ECOSYSTEM 8 Policy Control in Open Applications Use Case Examples Service Provider Owned IMS Applications VoLTE & RCS Policy control plays a vital role for service providers who wish to deploy their own IMS applications, such as VoLTE and RCS services. VoLTE and RCS Services VoLTE is perceived as game changer in today s data environment as data begins to replace voice as the big ticket item on a subscriber s bill. Over legacy 3G networks, voice calls were made over the PSTN, and as such there was no need for QoS management. Now with all IP 4G networks, voice calls can be delivered over the data network and share the bit pipe with other data applications. Because of this all-data service model, ensuring end-to-end QoS is vital for voice and video calls. By providing guaranteed QoS for voice services, service providers can offer telco-grade voice services to their customers over the LTE network. For services that run over LTE networks, such as VoLTE, the PCRF creates a dedicated bearer to provide guaranteed QoS levels for specific applications. This is a feature of policy control that is unique to LTE. The dedicated bearer can be associated with premium services such as HD video and voice that require guaranteed real-time quality of service, while the default bearer can be associated with general data and a different level of QoS. The dedicated bearer support with enhanced QoS powered by policy control is similar to creating a fast lane on a freeway for certain premium applications. In essence, policy and quality of service are inherent qualities in LTE and together they provide the basis upon which to monetize premium applications with superior network quality. Couple this with dynamic charging, and you can differentiate premium services based on quality and other dynamic criteria such as location, sponsored access and more giving service providers unique upsell opportunities. Dynamic policy control can: Provide a guaranteed and superior quality voice services to attract customers and differentiate from OTT applications Increase incremental revenues through preferential QoS for VoLTE services Ensure subscribers get the best voice connection possible over the 4G network Provide dedicated based dual-bearer set-up to enable premium services Provide standards based Rx support for existing IMS applications, including voice calls over RCS

9 POLICY AND THE NEW APPLICATION ECOSYSTEM 9 Service providers can increase the uptake of service provider managed data services like VoLTE and RCS and subscribers benefit from a superior voice and multimedia experience. Partnerships with OTT Vendors Along with offering service provider managed IMS applications, service providers can partner with popular OTT vendors to capitalize on revenue generating applications through sponsored access of featured content, or through providing preferential QoS as a chargeable value-added service. Sponsored Data Service providers can promote the use of strategic partner applications with sponsored access funded by OTT content partners. In example 1, service providers can partner with a streaming music provider to offer subscribers free access to the site and listen to the latest music charts. The OTT content provider could sponsor or fund the access completely, or share the cost with the service provider. The value to the subscriber is essentially free unmetered access that is it does not count towards their plan quota. Service providers can drive loyalty with attractive promotional offers such as these, while creating new revenue streams with preferred content partners. Sponsored service offerings incorporate intelligent policy controls to: Provide real-time application metering using advanced application detection capabilities and the Sd interface Zero-rate specific application usage, allowing for special promotions and partner sponsored access Generate network CDRs for accurate charge back and settlement with application partners Preferential QoS Another example of how service providers can leverage OTT partners is by providing their subscribers with preferential QoS for key applications. Through this type of partnership model, service providers can insert themselves into the OTT application- subscriber value chain by providing the added benefit of guaranteed QoS. Subscribers who access OTT video streaming apps, for example, over the service provider network can be targeted with inline or real-time notifications offering them guaranteed QoS for a higher quality video session. This ensures a quality user experience, while providing revenue generating opportunities for the service provider. By providing this guaranteed QoS, service providers can monetize premium content and offer the next generation of high quality services over their network. Policy enabled preferential QoS provides: The ability to monetize premium quality services through QoS upsell offers An enhanced subscriber experience to improve customer satisfaction EXAMPLE 1: SPONSORED DATA OPPORTUNITIES WITH OTT CONTENT PROVIDERS Service providers can engage in new revenue share models with OTT vendors and offer subscribers sponsored access to featured applications, helping to promote data usage and generate additional revenue. Image courtesy of Flash Networks

10 POLICY AND THE NEW APPLICATION ECOSYSTEM 10 Inline Notifications and Monetization In addition to the popularity of OTT applications, initiatives such as bring your own device (BYOD) are also taking center stage. As a result, service providers are losing the opportunity to maintain service provider branding on the mobile device screen. To drive visibility with their end customers, service providers are investigating innovative ways to maintain that essential presence. New solutions such as inline toolbars are becoming an important asset in preserving brand presence. Enabled through HTML insertion into the actual browsing session, typically as a discreet service provider branded toolbar, it provides opportunities for dynamic notifications or service upsell, including: Usage notifications around quota breach Top-up options Service upsell options Mobile advertising sponsored services Deferred application usage options when the network is congested, in exchange for temporary unmetered access This represents the next generation of dynamic notification capabilities, going beyond SMS and to one that is noticeably displayed in the actual browsing session. With user convenience, such as easy accessibility and the ability to invoke within the data session, it provides a contemporary approach while also allowing service providers to remain visible and relevant to the user. Policy control plays a key role in triggering the toolbar, as seen below in example 2. It is based on key contextual parameters, such as current data usage quota, application type, campaigns, such as mobile advertising targeting applications or subscriber groups, as well as invoking preferential QoS or access sponsored by a third party content partner. HD Video This example showcases an HD video upsell use case whereby the user is enjoying a video session. During the subscriber s video session, the policy server is aware that the subscriber is using a specific video application through its interaction with the traffic detection function. The policy server implements a policy rule to trigger an inline toolbar to notify the customer of a new HD upsell offer. By presenting a video upsell offer during a current video session, service providers can leverage real-time capabilities of policy to capitalize on the immediacy of the opportunity. The subscriber benefits from a dynamic and immediate opportunity to enjoy an HD experience, while the service provider leverages the convenient inline monetization opportunity through a branded in-line toolbar. Implementing inline notifications through the use of advanced policy control can: Provide timely and effective upgrade opportunities to subscribers when most compelling Offer revenue generating upsell offers to monetize data usage and drive usage of premium services Brand the data experience, ensuring the service provider is always top of mind to subscribers EXAMPLE 2: INLINE NOTIFICATIONS AND DATA PLAN UPSELL The inline toolbar will notify subscribers in real-time when they approach their data quota, providing convenient options for continued data usage. Images courtesy of Flash Networks

11 POLICY AND THE NEW APPLICATION ECOSYSTEM 11 Summary Service providers have several options at their disposal to make them viable players in the open applications ecosystem. They have an opportunity to provide significant value to their customers by offering them the next generation of compelling communications services, including premium IMS services, such as RCS, and rich 4G services, such as VoLTE. They also have the opportunity to partner with OTT providers and differentiate these applications with network quality. To achieve success with this approach, service providers need to leverage their existing network infrastructure and capabilities and embrace the new and growing application ecosystem to create new services that are truly compelling to their subscribers. By enabling value-added QoS attributes, metering usage on a per-application basis, interacting with a range of devices, applications and enforcement points in the network, policy control plays a key role in the dynamic application experience. It gives service providers new ways to leverage their core network and customer assets to become relevant in the open applications value chain, and apply real-time control over how applications are delivered to their consumer and business users. The Power of Amdocs Policy Control in Applications Monetization Amdocs Policy Controller is a best-of-suite policy control solution that fully leverages the power of pervasive network control, pre-integrated with charging and business support systems to enable the monetization of OTT and IMS-based applications. Support for advanced application detection and metering - The Amdocs Policy Controller features support for standards-based 3GPP Gx and Sd interfaces that enable real-time application detection and metering, including metering different traffic flows within an individual user session. This allows service providers to set multiple data limits for each application and meter them individually. - Metering can be based on time, volume, application, or a combination of these to support differentiated services and upsell offers. Notification framework - The real-time notification framework allows service providers to send timely notifications, promotions and upsell offers to improve the level of transparency and communication with their customers. Real-time QoS control - Policy Controller provides granular control over quality of service on a per application basis, with real-time policy changes enabled based on subscriber context, application usage as examples. Pre-integration with charging and BSS - Standardized integration between policy and charging is enabled through the Sy interface to support new charging enabled use cases. - Policy Controller is pre-integrated with Amdocs Enterprise Product Catalog, enabling an extensible, accurate and common framework for service definition, including policy and charging rules. - The combination of policy control, charging, and product catalog provides an extensible platform for advanced data monetization models such as with 3rd party content providers. Comprehensive interoperability program targeting network, device and policy enforcement points delivers time to market advantage and derisks integration and deployment - Broadest set of IOT completed with leading network equipment vendors (NEVs) and specialist vendors in the following areas: LTE and IMS MME, packet gateways 3G PDSN, GGSN Traffic detection - DPI, optimization Wi-Fi access points, femtocells, security gateways Device connection managers 1 Telefonica, Otange and Vodafone challenge OTT services with Spanish Joyn launch, November 2012, Fierce Wireless Europe 2 MetroPCS Takes Consumer Mobile Experience to New Levels as the First 4G LTE Mobile Service Provider in the World to Deploy Rich Communication Services, October 2012, Fierce Wireless 3 In new era, operators scorn over-the-top services at their peril, November 11, 2012, Gigaom 4 Based on Amdocs commissioned survey of 100 service provider, OTT player and device manufacturer executive decision makers across NA, CALA, EU and APAC. July 2012 by Coleman Parkes. 5 Based on Amdocs commissioned survey of 100 service provider, OTT player and device manufacturer executive decision makers across NA, CALA, EU and APAC. July 2012 by Coleman Parkes

12 About Amdocs For more than 30 years, Amdocs has ensured service providers success and embraced their biggest challenges. To win in the connected world, service providers rely on Amdocs to simplify the customer experience, harness the data explosion, stay ahead with new services and improve operational efficiency. The global company uniquely combines a market-leading BSS, OSS and network control product portfolio with value-driven professional services and managed services operations. With revenue of $3.2 billion in fiscal 2012, Amdocs and its 20,000 employees serve customers in more than 60 countries. Amdocs: Embrace Challenge, Experience Success. For more information, visit Amdocs at Amdocs has offices, development and support centers worldwide, including sites in: THE AMERICAS: ASIA PACIFIC: EUROPE, MIDDLE EAST & AFRICA: BRAZIL AUSTRALIA AUSTRIA ISRAEL SPAIN CANADA CHINA CYPRUS KAZAKHSTAN SWEDEN COSTA RICA INDIA CZECH REPUBLIC THE NETHERLANDS UNITED KINGDOM MEXICO JAPAN FRANCE POLAND UNITED ARAB EMIRATES - DUBAI UNITED STATES PHILIPPINES GERMANY RUSSIA SINGAPORE IRELAND SOUTH AFRICA TAIWAN THAILAND VIETNAM For the most up-to-date contact information for all Amdocs offices worldwide, please visit our website at Copyright 2013 Amdocs. All Rights Reserved. Reproduction or distribution other than for intended purposes is prohibited, without the prior written consent of Amdocs. The trademarks and service marks of Amdocs, including the Amdocs mark and logo, Intentional Customer Experience, CES, Clarify, Ensemble, Enabler, Return on Relationship, Intelecable, Collabrent, XACCT, DST Innovis, Stibo Graphic Software, Qpass, Cramer, SigValue, JacobsRimell, ChangingWorlds, jnetx, OpenMarket Inc., MX Telecom Inc., MX Telecom Ltd, Streamezzo, and Bridgewater Systems are the exclusive property of Amdocs, and may not be used without permission. All other marks are the property of their respective owners.

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