Mobile Data Offloading and Monetization
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1 Mobile Data Offloading and Monetization A White Paper Written by Andres Hernandez ahernandez@optimiquest.com
2 1 Executive summary With the increasing use of rich content over mobile networks, operators are looking for ways to manage the growing demand for bandwidth while keeping costs under control, without losing the relationship with their subscribers, while studying new ways of monetization. For many users of tablets, smartphones and laptops, studies indicate that Wi-Fi has become an increasing wireless technology used mainly at home, work, and free or paid public networks with average WiFi data consumption around 60% on smartphones, and 90% on tablets. The usage of wireless networks does not go unnoticed for the operators, and third companies. Mobile carriers see Wi-Fi as an alternative and increasing technology for relieving mobile traffic congestion given that smartphone traffic is expected to surge at a growth rate of more than 50% per year and licensed spectrum is becoming increasingly scarce. Meanwhile industry organizations and standardization bodies are working to ensure that 3G / LTE and Wi-Fi technology are on an evolution path towards full interworking. The path to fully seamless Wi- Fi / 3G / LTE services and full Wi-Fi network integration has already been mapped out. Driving users to consume WiFi is a clear benefit for mobile carriers in terms of investment since it reduces considerably the needs to increase bandwidth by adding new network elements or adapting new technologies (LTE). Actual bandwidth degradation caused by the capacity limitation with video content acting as the biggest driver affects directly the user experience. Reducing cost is the only benefit? The need to find new services and monetize them is a real challenge to increase ARPU and total benefits on mobile carriers. This paper highlights some of the most important drivers and arguments for MNOs to embrace seamless Wi-Fi, but also Big Data Analytics to categorize user interest and usage for both technologies: Mobile and WiFi to design a new WiFi Ad-network service to serve optimized campaigns, increase user experience, and acquire new users. In this white paper we: Discuss the background to the rising demand for mobile bandwidth and look at some of the approaches being used to address the congestion problem. Focus on Data Offload, explaining why it should be a key element in any operator s longer term plans. Show how to design and WiFi Ad-network on the cloud for seamless authentication. How Big Data analytics structures the unstructured data network generated by the user to create the Subscriber Profile, or Customer Value Model (CVM). How to use the insights provided by the analytics to feed Ad-server to serve optimized campaigns.
3 2 1. Introduction When relationships with end customers are eroded, cost efficiency and bandwidth become critical if a company is to remain competitive. Only those telcos that have suitably dimensioned infrastructures will be able to defend their market position in the long run, or at least to engage in successful cooperation with larger players. In the years ahead, a lot of money will have to be spent to ramp up the optical fiber and LTE networks because OTT services are cranking up the volume of data traffic on ever more powerful smartphones, tablets, PC and TVs. Between now and 2016, mobile data traffic will multiply tenfold, with video content acting as the biggest driver. By 2020, the OTTs' video offerings will account for more than half of the total data volume. Telcos have not yet found a way to tap into monetizing this exponential traffic increase. First attempts for monetization are tiered price plans and speed-step down tariffs that some European mobile operators deploy. 2. Data Offloading The cost to carriers of delivering the data that consumer wants to consume remains high. While carriers experiment new ways to charge, they will also take more aggressive steps to develop and gain access to cost-effective capacity. One strategy is offloading traffic. For years wireless carriers have viewed Wi-Fi as both a competitive threat and too expensive to serve as an offloading solution. In today s capacity and pricing environment, they are starting to embrace Wi-Fi as potential complements to their networks. These alternative means of data transport can serve as relief valves for overcrowded wireless networks. Some U.S carriers already include use of Wi-Fi hot spots in their mobile data pricing, and they increasily prompt consumers to select a WiFi network. Fig 1: Mobile Data Access Share. comscore Device Essentials UK December WiFI 68% Mobile 32% Fig 2: Offloading 3G to WiFi process To offer this service carriers must ideally designing a WiFi cloud service that provides seamless mobile Wi- Fi offload experience to their subscribers. The competing authentication solutions can be classified based on the minimum needed level of network interworking (SSID, SIM Authentication, etc.) What are the main opportunities of the offloading model? 1. Cost Saving The main objective to give access to free WiFi hotspots is based on reducing the need to increase mobile network capacity in the crowded areas (CAPEX), and increase the user Quality of Experience (QoE) based on network Quality of Service degradation due to access networks capacity limitation. 2. Customer Acquisition and Retention The offering would offer a much richer mobile experience than any of the ISPs, competing directly with them creating an acquisition and retention effect. 3. Incremental Revenue A seamless Wi-Fi offering will provide an attractive upsell opportunity to existing mobile data bundles; either as a flat-fee, mobile roaming charge (MRC), by usage, or perhaps a free feature for the user, trying to find third party agreements, ex: location services. Global solution designed to achieve the goals described represents a real opportunity for ISP providers with Mobile and Fix networks, but also opens the possibility to define new monetization opportunities.
4 3 Monetization opportunities We have seen that providing Wi-Fi offload for their own subscribers, the costly fees for data traffic in the mobile operator s network can be reduced, resulting in a very quick return on investment (ROI), but also by understanding how real consumers and devices type interact with your Wi-Fi Network can open new business opportunities: 1. New customer acquisition Carriers subscribers can transparently authenticate and access into the WiFi cloud network, but for nonsubscribers a free application can be deployed to offer free access by providing user data (mobile carrier name, address, sex, age, , etc.) during the subscription. By having the non-subscribers data information carrier has the possibility to send data plans offers based on their consumption and interest. Using Big Data Analytics platforms carriers can aggregate and categorize the CRM and Network data to provide subscriber insights (usage consumption and interest) by specific localizations (Cell ID, Hot Spot localization). This data can feeds ad-server platforms to offer localized advertising in the WiFi hotspots ad-network in a very optimized way (see Fig. 4) 3. Wi-Fi Data Insights Most of ISP carries providing mobile and fix internet access lose information of their own subscribers when are Offline (Fix network). This information is highlyvaluable for the carriers to have the complete subscriber usage insights for the different devices and access type for the different time periods. Fig 3: Share of UK Device Page Traffic for News/Information Category. Custom Analytics, July Location-based advertising Cable operators can leverage the combination of their often strong relationships with the media industry and a Wi-Fi-enabled subscriber base by offering locationbased targeted advertising. Fig 4: Subscriber and Access Network Profiling (add-network) for localized advertising optimization using transparent WiFi Authentication.
5 3 WiFi Ad-Network An online advertising network or ad network is a company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand. As described carriers could design a WiFi cloud service that provides seamless mobile Wi-Fi offload experience to their subscribers, considering in this case the addition of the hot spots as Cloud WiFi Network to serve ads: WiFi Ad-Network. Thanks to the data generated in the hotspots by the users and collected by the carriers Big Data Platform, aggregated and analyzed together with the Mobile Data, and CRM data we can generate: Subscriber Interest Profile: based on the type of services, device, operating system, and applications usage, and final interest based on the URLs visited (ex: sport, news, travel, education, etc.). This data combined with the CRM data as age, sex, demographics, etc, provides full Subscriber Interest Profile (Fig.3). Ad-Network WiFi Access Point Profiling: the aggregation of subscriber profiles can categorize the main usage and interest of the individual WiFi hot spot about which we knows its exact location. Fig 5: User Profiling Example The designed WiFi Ad-network is a Targeted Network: ad networks type that focus on specific targeting technologies such as behavioral or contextual, that have been built into an Ad server (Figure.3). Targeted networks specialize in using consumer clickstream data to enhance the value of the inventory they purchase. Ad-Server In this case ad-server combines information from the Subscriber Profile and WiFi hotspot including its location. This helps advertisers to select the type of users and location where they want their campaign agencies: Real Time Bidding (RTB) for localized advertisement: restaurants, shops, cinemas, etc. Localized User Analytics: Hotspot, Cell ID, and aggregated postal code, city. Resuming, together with the previous introduced advantages to optimize the internal business in terms of cost and user acquisition and retention we can create an external added value service: External Opportunity (B2B): offering the services to companies: retail, cinema, events, etc. The services provides access to the ad network, aggregated user information, and analytics. Internal Visibility: by aggregating WiFi data usage to the already existing Mobile data carries gain user behavior visibility improving their internal analytics.
6 3 Resume Offloading is an effective network congestion reduction strategy to solve the overload issue compared to scaling and optimisation. It enables network operators to reduce the congestion in the cellular networks, while for the end-user it provides cost savings on data services and higher bandwidth availability." Big Data Analytics for telco has the objetive to improve global user analytics by building a subscriber profile from the internal data sources to offer analytics to Marketing, Network and Care departments, but also carriers are trying to build new services from the data and monetize them. From the seamless WiFi Offloading solution we have proposed to build Ad-Network Platform that combined with Big Data platforms offers to carriers a new solution to optimize the internal business and find new external monetization opportunities. (Fig.6). About the Author Andrés Hernández has more than 10 years experience in the IT sector working within Mobile Network Operators, Device Manufacturers, and Big Data Software Providers. With MSc in Mobile Communications at Tampere University of Technolgy TUT (Finland), and Master on Internet Business at ISDI (Spain) he is an entrepreneurial person, seeking out solutions while exploring new opportunities through the combination of experience, creativity, analysis, and persistence. Main interest as Founder of OptimiQuest is to provide consulting services, analysis, innovation, and generate uses cases for Big Data (CEM for Telcos), and Online/Offline Added Value Services to optimize actual business, or find new monetization opportunities. Partner at Making Business Ideas, Investment Fund company for digital business created by # startups and # MIBers (MIB ex-students). Fig 6: Internal and External Opportunities DATA MONETIZATION OPTIMIZATION Cost Reduction Quality Optimization. Better User Experience B2C Customer Acquisition and Retention. Internal Analytics for Business Optimization. ARPU Increase. B2B New Added Value Services. External Analytics.
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