Computaris and Ovum presentation on the benefits of early Policy Management adoption

1. Strategic Drivers for Early
to Market Policy

2. Mobile Broadband Market Status & Outlook
The opportunity: Connection growth continues
Mobile broadband (WCDMA, TD-SCDMA, HSPA, CDMA 1xEV-
4,500,000
4,000,000 Big-screen reaches
DO, LTE, Mobile WiMAX) connections (000s)
724m in 2016 (20%
3,500,000
CAGR 2011-16)
3,000,000
2,500,000
2,000,000
1,500,000 Small-screen reaches
3.2bn in 2016 (24%
1,000,000
CAGR 2011-16)
500,000 Growth overtakes big-
screen from 2013
0
2009 2010 2011 2012 2013 2014 2015 2016
Small-screen (handsets) Big-screen (USB modems, datacards, laptops, netbooks, tablets)
Source: Ovum

3. Mobile Broadband Market Status & Outlook
The impact on the customer: Data, data everywhere
Source: Ovum

4. Mobile Broadband Market Status & Outlook
The impact on the customer: A shift in the way we consume
content
Source: Ovum

5. Mobile Broadband Market Status & Outlook
The impact on the customer: Data tariffs everywhere
Source: Ovum

6. Mobile Broadband Market Status & Outlook
The impact on operators: Every silver lining has a cloud
• 'Global mobile data traffic grew
2.6-fold in 2010, nearly tripling
for the third year in a row'
– 'Mobile data traffic [in 2009] was three
times the size of the entire global
Internet in 2000‘
• 'Global mobile data traffic will
increase 26-fold between 2010
and 2015'
– 'Two-thirds of the world's mobile data
traffic will be video by 2015'
– 'Mobile-connected tablets will generate
as much traffic in 2015 as the entire
global mobile network in 2010'
Source: Ovum

7. Mobile Broadband Market Status & Outlook
The impact on operators: Revenues not growing at the
same rate as connections
Mobile broadband (WCDMA, TD-SCDMA, HSPA, CDMA 1xEV-
$250,000
Big-screen reaches
DO, LTE, Mobile WiMAX) revenues ($ million)
$50bn in 2016 (12.6%
$200,000
CAGR 2011-16)
$150,000
$100,000
Small-screen reaches
$50,000 $167bn in 2016 (18.1%
CAGR 2011-16)
$0
2009 2010 2011 2012 2013 2014 2015 2016
Small-screen (handsets) Big-screen (USB modems, datacards, laptops, netbooks, tablets)
Source: Ovum

8. Mobile Broadband Market Status & Outlook
The impact on Operators: LTE is no ‘killer app’ &
competition is already intensifying
• Differentiators are hard to find, so 100 129% 95 140%
pricing will remain key 119% 121%
90 87
• Operators are only able to charge 79
120%
an LTE premium over 3G/3.5G for 80
% premium charged for 4G
a while 70 100%
Monthly fee (US$)
– < 20% in Asia / >100% in Europe 60
80%
• Plans emphasize high data speeds,
esp. Europe 50
43
38 60%
40 36
– Quality & consistency of user
experience are powerful 30 40%
differentiators, but it is difficult for
users to compare 20
20%
• Devices offer differentiation in the 10
short-term
0 0%
• Segmentation by peak speed Tele2 Telenor Telia
encourages take-up
Monthly fee of high-end 3G package up to
– E.g. Vodafone Germany 16Mbps (US$)
Monthly fee of high-end 4G package up to
80Mbps (US$)
Premium charged for 4G (%)
Source: Ovum

9. Mobile Broadband Market Status & Outlook
The impact on Operators: Operators won’t benefit from
content & apps growth
$450,000
9,000 7,000,000
(not including advertising) ($ milion) - DRAFT
Total paid for application downloads (000s) -
End-user revenues from paid-for downloads
Mobile operator serrvice revenues ($ million)
$400,000 8,000
6,000,000
$350,000 7,000
5,000,000
9% of data revenues 6,000
$300,000
in 2009, falling to 6%
4,000,000
DRAFT
$250,000 in 2016 (0.65% CAGR 5,000
2011-6)
4,000 3,000,000
$200,000
Total ops & 3rd
3,000
$150,000 parties revenue 2,000,000
2,000 hits 8.4bn in
$100,000 2016 (CAGR 1,000,000
1,000 2011-6 16%)
$50,000
0 0
09
10
11
12
13
14
15
16
$0 20
20
20
20
20
20
20
20
09
10
11
12
13
14
15
16
20
20
20
20
20
20
20
20
End user revenues from paid for downloads
2G data access Mobile broadband (not including advertising)
Total paid for application downloads
Value-added services Messaging
Source: Ovum

10. The impact on Operators: Complex ecosystems
Mobile
Mobile
Industry
Specialist Industry
associatns
research associations
bodies
Charities/
NGOs
Regulator
telecoms
banking
Government
aid
agencies
Banks
Enablers /
intermediaries
Enablers /
intermediaries
Technology
vendors
Device
Vendors
Mobile
Operators
MNOs
MVNOs
Agents &
Resellers
Source: Ovum

11. Mobile Broadband Market Status & Outlook
The impact on Operators: Business models must change
Excessive data usage must
be paid for
Service bundling is becoming
critical
The end of unlimited?
Mobile revolution
Fair Usage Policies

12. Key Messages
• There is undoubted demand for mobile data
• Network investment must increase
• Customers can look elsewhere
• LTE is not a panacea
• Long-term & Evolution are the key words
• New Business models & ecosystems

13. Technology & Network Evolution
Access
speed
100M
Play online
Streams video games
File sharing
Download
movies
11M
Web search
5.8M Streams
music
1M
384k
Internet News online
IM
banking Social
Internet browsing networking
Read blogs
9.6k Web search Email
2G 2.5G 3G 3G+ 3G+ 4G
GSM Edge UMTS HSDPA HSPA+ LTE

14. Mobile Data Consumption Drivers
Three main drivers
• Customers expect a seamless
experience regardless of device
• Online services worldwide are
increasing cutting deals with
content providers

15. Current Challenges in Mobile Data Supply
• The ‘capacity crunch‘ is recognized by • Anticipating traffic patterns & building
most operators traffic models
• Growth in demand for capacity has • Managing traffic load while increasing
exceeded the growth in supply service personalization
• Revenue is no longer connected to the • Striking a balance between network &
cost model; flat rate is no longer a viable pricing policies
option
• User expectation of mobile broadband is • Ensuring QoE for the increasing demand
set by their experience with fixed for quality video experience & enhanced
broadband monetization
• OTT providers are launching bandwidth
intensive applications
• Mobile networks are experiencing more
capacity issues

16. Policy Management Objectives
What’s Policy all about
Dynamic
• Differentiated access to services
decisions
• Allocation of network resources to
better manage congestion burdens
Decisions
• Subscriber profile, location, equipment
based on
• Network capacity
• Source & type of traffic
Applicable • Any IP application
for • Mobile, wireless & cable/broadband
Bill shock Content Charging
Fair Usage Premium
services
QoS Location Based
Policy Charging Charging
Enterprise/ Spending
Parental Control rewards
Congestion Service
Mgnt personalization

17. Policy Management
From network-centric to subscriber-centric approach
• Congestion control
Monetization Differentiation • Complex spend control
• Load balancing • Resource prioritization
• Optimized routing • Dynamic up-selling
Parental Bill shock
control
Prioritization
Congestion Subscriber self
Management care and
personalization
Application
Fair Usage
bundles
Control Service
limited pass

18. Evolving Services
New requirements
By Subscriber profile
By Application By Access method
By Device By Volume
By Time
Blackberry IPhone
Key Set Allocate
Heavy applications priorities number
users
Basic Parental
control
Spending
Business Gamers reward Bill control
Premium services

19. New Business Models
Consumer electronic devices – future growth of mobile
comms

20. Policy Management
Emerging Markets – Need for Congestion free Networks
and Traffic Monetization
Mobile data
usage
Pricing Network

21. Policy Management
Emerging Markets Status
4,500
Global mobile broadband connections (millions)
4,000
3,500
3,000
2,500
of which big-screen
2,000 of which small-screen
1,500
1,000
500
0
2010 2011 2012 2013 2014 2015 2016
• Transition to 3G and LTE begun
• Limited CAPEX to increase coverage
• Internet penetration in emerging markets:10%
• Data services cost at least twice in emerging markets comparing to mature markets
• Broadband pricing is low
• In several emerging markets data services are already charged using usage based models

22. Policy Management
Mature markets – Need to reduce data delivery costs
• Reduced data delivery costs evolving
to 3G/4G, implementing policy
control & optimizing the network
• Need for tiered, dynamic, usage
based pricing and charging
• Tiered services
• Mobile advertising & mobile
commerce on the corner
• Challenges in terms of product
innovation, infrastructure investment
monetization & costs optimization
• Growing 3G/LTE penetration
• Lowe cost Smartphone and high
concentration in urban areas
• Increasing bandwidth demand
• Popular mobile applications and flat rates

23. Strategic drivers for policy adoption
Functional footprint
POLICY
Marketing Improvements
Increase ARPU with tiered
and evolved data services
Assured Monetisation Subscriber Intelligence
Revenue assured & flexible Personalised subscriber service
service charging experience

24. Policy Management
Vendor evaluation
• Proven experience and references
• Cost effective alternative
• Multivendor operability
• Established solution roadmap
• Focused on innovation
• Willing to offer knowledge sharing opportunities and training
• 3GPP compliant
• Can offer a best of breed, tailored made pre-integrated solution

25. Policy Management
Recommended approach: implement today a scalable
solution
– Carrier-grade, highly extensible and configurable solution, enabling you to adapt it easily
to changing business needs
– Established roadmap and evolution path to 4G/LTE and for policy convergence across
both fixed and mobile
– Independent of network infrastructure
– Full 3GPP compliant
– Contextual, supported by subscriber awareness
– Become an active member of VAS and content from the network value chain
– Engage in beneficial partnerships
– Easily charge for OTT services

26. Take Away Ideas
• Policy management goes beyond managing the supply capacity &
should be subscriber centric
• New business ecosystems require an entirely new approach – early
adoption of a policy management will bring a competitive advantage
• To generate new revenue streams, policy needs to be deeply integrated
with BSS - particularly with the charging components

27. Mobile Data Accessibility
Mobile Broadband Users Growth: 2010-16
• Mature markets are driving innovation, but emerging markets are driving volumes. According to an Ovum
forecast, overall mobile broadband users will grow at a CAGR of 28% by 2015.
• While growth will continue to be robust in Western Europe and North America, the strongest growth is
forecasted to occur in the emerging markets of Asia-Pacific, the Middle East & Africa, with compound
annual growth rates exceeding 35%.
4,500
4,000
3,500
Africa
3,000
Middle East
2,500 Asia-Pacific
2,000 Eastern Europe
Western Europe
1,500
South & Central America
1,000 North America
500
0
2010 2011 2012 2013 2014 2015 2016
Source Ovum

28. How is the future profiling?
• Video traffic is doubling every 12 months
• By 2015 there will be in use approximately
one mobile-connected device for each
person from the planet
• Smartphone's user consume more than
twenty times more data than traditional
handsets users
• 48 million people around the globe have
mobile phones even though they don’t have
electricity at home

29. Policy Management
Mobile data monetization use cases

30. Policy, Charging & Traffic Control
Use cases Market Offer
Tiered Priced Quotas
Time Based Services
On-Demand Capacity
Rich Communication
Services
Machine to Machine
Services
Cloud Computing
Services
Per Usage Based
Services
Service Control
Customer Experience
Backhaul Reduction
Bill Shock Control
Roaming
Advice of Services &
Charge Application Filtering
Application Quality of Application Bandwidth
Service Control
Service Personalization Application Store
Partnerships
On Demand Activation
Pre-pay Control
Employee/Parental Control
Fixed to Mobile
Loyalty Rewards
Convergence
Service Self-Care
Device Based Control
System Function
3GPP PCRF
3GPP OCS/OFCS
Active Mediation
Network Edge Rating
3GPP PCEF (Service
Level)
Deep Packet Inspection
WIMAX CSN Node

31. Policy Management
DPI – When and Why Do You Need it?
• Monitoring and metering applications
• Prioritize, shape and block traffic flows to control congestion
• Dynamic resource allocation
• Exploit highly valuable information such as:
− Most popular applications for each service plan, period, region
− Top users per service plan, period
− Quota usage
• Enforce or restrict OTT applications traffic
• Subscriber awareness and quota management

32. Policy Management
Strategic drivers
− Greater personalization and user control
− Enhance management and monetization
− Real time network intelligence
− Content usage patterns
− High value customers

33. Mobile Service Evolution
Broadband Usage Protection Market Segmentation Extend Business Paradigm
2-Slided Business Models
On Demand Application (Apps Store QoS & Telco 2.0)
Fair Usage, FMC & QoS Capacity&Control
Capacity Mngmt.
Managed Services
Tiered Quota (VoIP, IMS,RCS, M2M)
Bill Shock / Usage Mngmt.
Policy Management Policy Management
Policy Management (Gx,
Policy Management (Gx) (Gx), Charging (Ro), (Gx&Rx), Charging
Systems Rx, S9) & Charging
& Monitoring Monitoring & (Ro&Gy), DPI,
(Ro&Gy), Monitoring &
Enhancement Monitoring &
Enhancement, DPI
Enhancement
Applicable 2.5G/3G/LTE Visiting/Home PCRF,
Mobile 3GPP 2.5G/3G PCRF, PCEF and
2.5G/3G PCRF &DPI OCS/OFCS, PCEF, IMS, GAN and
OCS/OFCS
Standards AF
Minimizing Network CAPEX Network Investment and ARPU Improvement through
Finance And Customer Care OPEX Reducing ARPU Erosion improved value proposition

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