Spanish Mobile Challenger Wields DPI
Spanish mobile operator Yoigo has shown that deep packet inspection (DPI) technology can be used for generating new revenue, and not just as a tool for managing bandwidth and blocking certain types of traffic.
Yoigo, majority owned by Sweden's TeliaSonera AB (Nasdaq: TLSN) and currently the fourth-largest operator in Spain with about 2.3 million customers, launched a mobile data up-sell program in December 2010 using DPI equipment from Procera Networks Inc. (Nasdaq: PKT). (See Yoigo Picks Procera and TeliaSonera Launches Yoigo.)
Here's how it works. When customers approach their monthly limit for mobile data, they are first alerted and then directed to a Web page, where they can opt to buy a data top-up or do nothing, which results in the customer's service speed being reduced to 128 Kbit/s once (if) the limit is reached.
And the results so far? The operator has experienced a 72 percent acceptance rate of the mobile data up-sell option since the launch in December, according to Yoigo CEO Johan Andsjo.
For Andsjo, applying DPI technology in this way is more important for improving the customer experience than for adding new service revenue. However, he notes that with the additional customer revenues, the cost of implementing this project was paid back within three weeks.
"These were our best customers," says Andsjo. "We wanted to treat our customers well. It's more about customers than about [a revenue opportunity]."
Yoigo's customer base is evenly split between contract and pay-as-you-go subscribers. And the operator strives for simplicity with its tariffs.
In addition to the mobile data up-sell service, Yoigo uses Procera's DPI technology for three other purposes: meeting the recently introduced European regulation for mobile data roaming; traffic shaping and real-time quality of service (QoS), whereby streaming, for example, is prioritized over peer-to-peer and voice over IP (VoIP); and blocking access to images of child abuse.
Why this matters
As a small operator in the Spanish market, Yoigo needs to stand out amongst giant rivals Telefónica SA (NYSE: TEF), Orange Spain and Vodafone España S.A. , as well as a multitude of mobile virtual network operators (MVNOs). And this up-sell tool using DPI technology is one way to achieve that.
This is also an interesting example of an operator using what is often a much-maligned technology to improve customer experience. Mobile operators are typically reluctant to talk about how they use DPI for fear of raising their heads above the parapet for regulators to see as net neutrality rules evolve.
It also gives Procera something to talk about. A three-week return on investment is certainly a statistic worth talking about, and the deployment adds to the vendor's standing at one of Europe's leading carriers: TeliaSonera already uses Procera equipment in its fixed broadband access network, but the Spanish operator is the first mobile operator in the Scandinavian giant's international footprint to use the DPI technology to develop a mobile data upsell campaign.
And it could lead to further innovation. Yoigo's Andsjo says he could use DPI capabilities to create value-based pricing models for mobile data services. This is a potential new way of charging for mobile data, which TeliaSonera has recently proposed. (See TeliaSonera Develops New Mobile Data Model and TeliaSonera Blazes LTE Trail of Tiers .) For more
Devising innovative uses for DPI and its Service Provider Information Technology (SPIT) counterpart policy control is all the rage among mobile operators right now as they seek to capitalize on the ever-increasing data traffic loads on their networks. See the stories listed here for more background, and be sure not to miss Light Reading's Policy Management in the 4G Era event at CTIA Wireless 2011 in Orlando, Fla., later this month.
- The Policy Bandwagon Rolls On
- Mobile Operators Hot for Policy Control
- Boom Time for Policy
- Data Surge Fuels Policy Control Boom
- Five Things You Need to Know About Policy & DPI
- Procera Claims Deployments
- Procera Snares Tier 1s
— Michelle Donegan, European Editor, Light Reading Mobile