4G World: Cisco's Smart Pipe Suggestions

CHICAGO -- 4G World -- Cisco Systems Inc. (Nasdaq: CSCO) wants to help the wireless operators get smart and get paid, which is why it's introducing the Cisco Traffic Packet Optimization (TPO) service, being announced here on Wednesday.

TPO, a new in-line service on the Cisco ASR 5000 platform, is built around helping wireless operators better manage data traffic on their IP networks by identifying any dynamic network conditions and adapting the traffic to accommodate it. According to the company, doing this can potentially reduce the amount of traffic on the network by 50 percent.

The service was mentioned today in a keynote address by Ashraf Dahod, senior vice president and general manager of Cisco's mobile Internet technology group and founder and CEO of Starent, which was acquired by Cisco last October, earning it a nod in Light Reading's Leading Lights awards for Best Dealmaker. (See Leading Lights: Best Deal Maker and Cisco to Buy Starent for $2.9B.)

Dahod used his keynote address to inform wireless operators of Cisco's guide to making money. Business models are changing from business-to-consumer to business-to-business-to-consumer (B2B2C), he said, which requires a different set of arrangements in the ecosystem. The opportunity -- and the challenge -- is for service providers to drive revenue on both the business and consumer side of the equation.

"As the landscape is changing, we need to change our perspective and how we look at the model from a business and technical point of view," Dahod said.

Dahod said the real opportunity for profitability comes through intelligence -- knowing what's going on in the network, where users are, and what services they are using.

Traditional services on the network make up around 80 percent of operators' total capex, while mobile Internet services account for only 20 percent of the investment, he said.

"It is really the investment in the intelligence in the IP infrastructure that we believe opens up the door for profitability," Dahod said. To monetize the investment, he had a couple of suggestions.

First, tiered pricing. When asked if this might cause consumers to jump ship to another operator that offers unlimited plans, Dahod said, no. They are more concerned with devices and quality of service. There is no free lunch.

Second, he said to charge for premium mobile video. Let users opt in to pay a fee for an accelerated download. They'll do it. Or offer "freemium" services -- provide access to social networks without counting it against the monthly quota, but offer enhanced features within the service.

Another option is to let advertisers or content providers subsidize access to the broadband network. That's an example of B2B2C, he said.

Beyond monetization, operators should focus on capex and opex reduction by optimizing the network through offload, video optimization, and transrating, or adapting and transcoding multimedia traffic, and -- his Cisco plug -- using the vendor's new TPO service.

"We believe in not building big, fat dumb pipes," he said.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

kshyam 12/5/2012 | 4:20:57 PM
re: 4G World: Cisco's Smart Pipe Suggestions

the customers/consumers would hate such suggestions and its a big step backward in advancing communication in the world....monetizing video..bandwidth are all useless and would seriously deter and inhibit any other interesting model to develop...and thr is nothing innovative about these models.and we all know networking providers suck in writing software so wht monetization are we talking about based on user behavior ?? .....the real way to go would be to change the current business models of the network providers...instead of they going after consumer content and consumer behavior they should rather  focus on what they are good at..and they should rather move into the service model and start building the data center networks of the content providers that will keep them profitable...and same time build better and more modern networks..we have a precedent in a different industry.. IBM which did this perfectly and became quite profitable due to the transformation..

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