Israeli billing systems vendor FTS (London: FTS) claims to have developed a platform that combines policy management capabilities with business and marketing rules to help carriers derive more benefit from monitoring service information in real time. (See FTS Touts Business Control Layer.)

FTS is also determined to introduce a new telecom term, Business Control Layer, into an industry already saturated with marketing terminology. (See FTS Rebrands.)

News that a back-office systems vendor has expanded into the service and network policy management sector will come as no surprise to Heavy Reading analyst Caroline Chappell. Just two weeks ago she noted that policy control specialists, such as Bridgewater Systems Corp. (Toronto: BWC), Camiant Inc. , Operax AB , Redknee Inc. (Toronto TSX: RKN), and Tazz Networks Inc. , should expect a "competitive threat from some OSS companies that are looking to extend their capabilities from the service assurance sector and into policy management and bandwidth control." (See Operax Scores $15 Million.)

Chappell also noted that such companies would have a hard time catching up with those specialists in terms of developing technology that meets emerging industry standards, especially IIP Multimedia Subsystem (IMS).

FTS's answer is to make use of the massive amounts of data generated by telecom networks and put it to business use, right now. "Everything a customer does is registered as 'an event,' but the network either ignores those events or they're simply used for billing purposes," says the firm's VP of marketing and business development, Yair Sakov.

He says a network event, such as a video-on-demand (VOD) download, has a billing implication (the customer needs to be charged for the event) but also has a business implication. "For instance, the customer could be awarded loyalty points," and be informed about other VOD options or related services, such as increased bandwidth.

The FTS system puts the service data to use now, before IMS standards become finalized. "Customers want instant gratification, instant access, and instant response," says Sakov. "IMS will enable real-time capabilities, but how can carriers get IMS-type functionality today?"

The policy system will also help manage customer service. For example, if a customer reaches a certain quota level of text messages or broadband download capacity, those customers don't need to be simply disallowed from using the service again until the next month, says Sakov. Instead, they could be directed to a Web page to review their options, or sent a warning message to tell them they've nearly reached their quota, and what upgrade opportunities there might be.

Such extensive data monitoring and communication will require the system to conduct a number of functions, such as policy control, CRM, billing, and rating (the capability to place a value on a service or event for billing and marketing purposes).

FTS has teamed up with a number of deep packet inspection companies, including Cisco Systems Inc. (Nasdaq: CSCO), Allot Ltd. (Nasdaq: ALLT), and CableMatrix Technologies Inc. , whose technology can measure broadband service usage.

The company already has its Leap BCE (Business Control Engine) up and running at Belgian cable operator Telenet , which has been offering services using the system since February. (See Telenet Deploys FTS.)

Telenet has used the platform to offer additional services to its 20-Mbit/s customers that reach their monthly download quota. Previously, those customers would have been automatically downgraded to a 64-kbit/s connection for the remainder of the month once the quota was exceeded, a measurement made by Cisco's deep packet inspection product, the Service Control Engine (SCE).

Now these customers get a warning by SMS or email that they're approaching their quota, and are able to opt for additional download capacity that is billed per megabyte of data. Telenet has also introduced a "bandwidth on demand" service for broadband customers who, for example, use services that require a short-term increase in bandwidth, such as online gaming.

Sakov says Telenet reports that about 15 percent of the 20-Mbit/s customers that reach their monthly quota opt for the additional, per-megabyte service, resulting in a 40 percent reduction in broadband-related calls to the customer service center and a reduction in customer churn. Telenet reported in its six-month report that broadband churn had dropped to 8.4 percent in the first half of 2006 from 8.8 percent a year earlier, and that this was "a positive reflection of customer satisfaction for this product."

So how does FTS compare with the policy server specialists? Sakov says the new approach is all about making policy management "more service aware... Many of these other companies offer static policy management." He admits, too, that Redknee is "coming to the market with business thinking," and that the near-term challenge, in terms of like-for-like capabilities, is likely to come from vendors such as Tazz and Bridgewater.

But that's not how others see it. "The idea that what's already available is static policy management is false. The concepts and solution being proposed here are not new," says Tazz's marketing director Richard Cardone. "Our platform has the ability to do the same thing, combined with deep packet inspection capabilities. The concept of adding business logic to policy management is the right thing to do, but it's what we've been talking about for years."

And Heavy Reading's Chappell is a little dubious about the timing and positioning of FTS's offer. "The technology sounds helpful, and there's no doubt that policy management is going to become a very big deal. But I'm not sure that introducing a new proposition at this stage will help the carriers very much. There's more chance it will cause confusion," says the analyst.

— Ray Le Maistre, International News Editor, Light Reading