Pure-Play Policy's Future Is Fading
Service providers are finding the policy technology they used to manage bandwidth and patrol their networks can't be scaled up to offer the advanced billing packages they need to monetize data, according to Heavy Reading research conducted for Amdocs Ltd. (NYSE: DOX) and released on Tuesday.
So now they are looking instead for policy management that is integrated with charging and billing systems, and can be used across network silos.
Every one of the more than 30 service providers interviewed had deployed policy management systems, either as a stand-alone product in their own implementation or as part of a packet core, says Heavy Reading analyst Ari Banerjee.
"When we asked them if they had extended these solutions to do monetization of data, the overwhelming majority said they had either tried and failed, or had found the projects needed so much integration that they can't make it work cost-effectively," Banerjee says.
All of the Asian service providers surveyed had that experience, 90 percent of the European service providers did and two-thirds of the U.S. service providers reported the same outcome -- their existing policy systems could not be morphed into policy management systems that would let them introduce new packaging of data services.
"Within the next two to three years, the pure-play policy market will be dead," Banerjee says.
Instead, service providers are looking to vendors who can include policy as part of charging and billing to enable a more flexible array of service plans that can be personalized and can operate across service silos and lines of business, including wireline and wireless services.
"They are looking to implement nuanced and advanced-parameter-type rate plans, not just based on volume or speed, but including device elements, subscriber data and specific applications," says Guy Hilton, director of Product Marketing, Revenue Management for Amdocs.
For example, more than 80 percent of interviewed operators said that in the future they intended to include data plans shared between several devices, such as tablets and smartphones, and over 65 percent said they intended to include data plans shared between several family members.
"Service providers realize they can't have a lot of complex plans," Banerjee says. And they can't base their plans on things consumers don't understand -- such as how much data usage is represented by a gigabit. Instead, service providers are looking to build plans around consumer needs, such as adding unlimited social networking into a service bundle, he says, or offering on-demand "turbo boosts" to enable streaming of a video.
The survey data would favor larger companies who are adding policy management to their existing OSS/BSS systems, as Amdocs did with its acquisition of Bridgewater. (See Amdocs to Buy Bridgewater for $215M.)
This trend could lead to further consolidation within policy management and OSS/BSS systems.
— Carol Wilson, Chief Editor, Events, Light Reading