|Issue:||Europe I 2010|
|Topic:||Policy control and charging for LTE|
|Title:||Founder and Chief Technology Officer|
Joe Hogan is the Founder and Chief Technology Officer of Openet and the principal architect of Openet’s FusionWorks based solutions; he has more than 20 years of software engineering experience. Mr Hogan represents the company in the IETF, 3GPP, IPDR.org, and GBA forums and frequently speaks at, and chairs, conferences throughout Europe, Asia, and North America. He was also a senior architect with Sun Microsystems’s European kernel development centre before leaving to found Openet.
Policy control allows service providers to establish policies, business rules, that define how a user will be treated, and its needs handled (QoS, priorities, bandwidth allocation, etc.). The level of service accorded is intimately related to the rates charged. With services such as LTE and EPC, ARPU growth will be slower than data growth so revenues per megabit will drop. Operators will need increasingly sophisticated and scalable policy control and charging to walk the line between profit margins and customer satisfaction.
It is no secret that many mobile network operators are committed to deploying long-term evolution (LTE) technology to deal with the rapid growth in wireless data services. With this network development mobile network operators are faced with some difficult choices in deciding how to evolve their charging, policy management and billing mediation platforms as they deploy LTE and the evolved packet core (EPC). There is a critical trade-off between delivering the full potential for LTE and IMS to enrich the end user experience and the cost of replacing and upgrading the existing network and support systems. The end user experience, with the appropriate charging and billing infrastructure, will translate into increased revenue and customer loyalty. Mobile operators are realising the need to optimise their network and service architectures to continue to grow capacity, lower costs, improve network performance, manage devices, and meet subscriber expectations. LTE business case Wireless data growth will be the principal driver behind the first wave of LTE deployments. Analyst house Heavy Reading has forecast that wireless data traffic in developed countries will increase tenfold between 2008 and 2015, and sevenfold in emerging markets over the same period. Revenue per megabyte will continue to fall, driven down by increasing competition and flat rate pricing. Operators will deploy LTE to cope with data growth and deal with the divergence of revenue and cost. LTE, strictly speaking, refers only to the radio access standards introduced by 3GPP in release 8. This is part of a broader 3GPP program called system architecture evolution (SAE) that includes the evolved packet core (EPC). LTE is part of a broader SAE that will bring additional benefits. Operators will deploy the EPC alongside LTE in the radio access network (RAN). Together these provide a flatter and simpler IP architecture with lower latency and a more sophisticated make-up. Other key drivers: • Mobile operators are offering higher wireless data rates with attractive flat rate data tariffs. This is possible because of the deployment of 3G technologies and successor technologies such as HSPA and other 3G enhancements; • The use of netbooks and laptops with 3G USB dongles, mainly by enterprise customers, will continue to grow rapidly as tariffs become more attractive; • Smartphones with large touch screens, high bandwidth connections and compelling user interfaces – the Apple iPhone has been the leader in this area, but all major device manufacturers are now offering competing products; • Advances in mobile data services and mobile devices have made the full Internet available to mobile end users. This in turn has stimulated development of mobile versions of existing Internet services such as Facebook, Google maps, Google search, Twitter and YouTube. Location-based services, operator billing, reduced bandwidth requirements and mobile specific user interfaces are becoming increasingly popular; and • New types of devices and services are starting to exploit the unique characteristics of mobile data services. Amazon’s Kindle is an example of an application specific device that uses a dedicated mobile service. Machine to machine services will drive further usage growth. Improved network coverage and reliability will also stimulate the use of cloud computing to simplify deployment and management of new applications. This will lead to continuous growth in wireless network traffic per user over the next five years. The growth in mobile data usage is obviously good news for operators, but it creates a dilemma; data usage will grow much faster than ARPU (average revenue per user) resulting in a significant decline in revenue per megabyte. The cost of maintaining the existing, non-LTE, network will soon begin to erode operators’ profit margins and will eventually outstrip revenue. Compared with legacy networks, LTE improves spectral efficiency and employs a flat-RAN architecture, which also reduces the number of network nodes. Jointly, the benefits of improved spectral efficiency and flat-RAN architecture reduce network carriage costs and create a cost-growth curve that tends to track revenue rather than demand, allowing the operator to maintain a healthy profit margin. Compared with previous access technologies, like GSM, CDMA or UMTS, the smaller size of the LTE access node brings other benefits, including lower power consumption and a much smaller space requirement. Policy control and charging Over 65 per cent of the service providers polled in a recent Yankee Group survey currently require policy control or will within the next 12 months to manage mobile data growth in their 3G networks and they are not waiting for LTE. The fundamental issue operators will face is how to evolve an already complex policy control, charging (PCC) and billing infrastructure to accommodate the needs of LTE. A migration path is required from the legacy environment to the LTE/SAE architecture. The increased transaction rates that the PCC will have to support will drive the replacement of most legacy components during the migration. The pre-paid platform, in particular will be gradually eliminated as balance management migrates to the online billing platform and the circuit switched infrastructure will eventually be replaced. In current 2G/3G networks policy control, charging and billing mediation are already complex functions. In the short term, the evolution of policy control, charging and billing to support LTE will mean that existing billing mediation platforms will need to be extended to support the EPC elements. The rapidly increasing data traffic will force these systems to scale-up to meet demand. Although these systems can be complex and expensive to upgrade, operators should focus on enhancements to the policy control and charging. Operators can achieve significant benefits by centralising control across mobile access technologies. Benefits include smoother service migration and better management of mobile data traffic and applications such as the ability to direct traffic and applications to the optimal access network. This can result in significant capital and operating cost savings. As the cornerstone for mobile personalisation and management, ‘smart’ subscriber service and policy controls enable mobile operators to moderate data traffic and entice subscribers with innovative, personalised services. Deployment of full IMS (IP Multimedia Subsystem) capabilities will significantly increase the volume of charging and policy events that the policy and charging control and mediation functions must deal with. Consequently operators must carefully evaluate the scalability and performance of systems deployed during the transition phase to full LTE/IMS deployment. In the utility sector, to encourage consumers and businesses to increase usage during off-peak hours when rates are lower and decrease usage during peak hours, utilities are deploying smart meters to help manage electricity consumption. Operators will need to adopt a similar approach introducing controls to manage the demand for data during peak hours. This is where such EPC control components as the Home Subscriber Server (HSS), Policy Controller (PCRF), and inter-working functions (3GPP AAA) come into play. Together they form the central control plane and include the main repository for subscriber and device information, provide authorisation and authentication functions for services, apply policies to manage network resources, applications, devices, and subscribers, and ensure inter-working with other access networks such as EVDO, WiMAX, and WiFi. Policy and online charging will become increasingly connected as the network evolves towards full LTE/IMS and operators must evaluate how these will integrate over time. LTE will offer the increased capacity operators and their customers require. However, to ensure an appropriate return on investment, carriers will need to ensure charging and policy controls scale to support an exponential rise in the number of events and new services. Only an integrated and well-planned network can offer the experience LTE promises to deliver.