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Telcordia Crashes Crowded Policy Party

Telcordia Technologies Inc. has unveiled its Bandwidth Manager, the latest product in its Service Provider Information Technology (SPIT) toolbox to help communication service providers address the mobile broadband bandwidth crunch.

The move positions Telcordia in one of the telecom sector's hottest, and already overcrowded, markets -- policy control.

The vendor's new product includes Policy and Charging Rules Function (PCRF) software that, according to the vendor, can be integrated into existing carrier networks, allowing operators to set bandwidth and charging rules. The enforcement of the rules can be customized to individual markets or customers, based on the access they require, the time at which they're consuming the data services, and the network congestion at that time.

Telcordia believes operators can reduce their broadband network capital expenditures by up to 25 percent through the use of bandwidth optimization capabilities, regardless of whether the network is fixed (DSL) or wireless (3G or LTE).

Graham Cobb, marketing director of Telcordia revenue management solutions, says the new tool is designed to let carriers offer tiered plans that are built around services, not volume caps. This is a message that Telcordia has been peddling for some time now. (See Telcordia: More Services Are the Answer.)

"There's a move away from all-you-can-eat," says Cobb, a statement that chimes with the times. (See 'All You Can Eat' Is Off the Menu.)

He says the key challenge is to provide capabilities that can satisfy the needs of the marketing as well as the network operations teams, and to help stimulate service use and drive revenues, as well as enabling operators to limit the use of certain network assets at particular times.

Cobb suggests that operators offer a low-tier data plan as an entry-level tool, then add additional services on top. "If [customers] are on the basic Web plan, and want to watch a video, you can offer, in real time, a temporary upgrade," notes the Telcordia man. "For $10 you can give them video access for just the weekend. That's where the profit comes from."

The key is that consumers have to be aware and continually informed about what's going on. There can't be fine print that causes bills to skyrocket or services to get cut off mid-month.

That's something that AT&T Inc. (NYSE: T) (not a Telcordia customer) might quickly realize. The carrier last week announced its oft-discussed move to tiered pricing. It has promised granular controls for consumers and is letting them plan for their bandwidth usage with an online Data Calculator.

Whether that approach is acceptable to customers remains to be seen, says Heavy Reading chief analyst Graham Finnie. (See Capping the Data Gusher and AT&T Intros Mobile Data Caps.) "It's an inevitable development," Finnie says. "It's a question of doing it in a way that's actually not perceived by end users as just the carriers coming down on their heads and making their lives more difficult."

While Telcordia is certainly entering a key market with its new product, it's fairly late to the party. The network policy control market is already a very competitive space with around 30 players, including the main network equipment providers and established specialists such as Bridgewater Systems Corp. (Toronto: BWC), BroadHop Inc. , Camiant Inc. (now part of Tekelec ), and Openet Telecom Ltd. , notes Finnie. (See Tekelec Splashes $165M on SPIT Specialists, The SPIT Manifesto, SPIT Watch: Comarch Eyes Expansion, Bharti Airtel Picks NSN, and AlcaLu Wins Angola Deal.)

However, the analyst notes that Telcordia's advantages lie in its size and the fact that it has a whole set of supporting services that fill in the wider SPIT space, allowing it to create a more integrated offer. (See Telcordia: Still a $700M+ Player, Mgmt World: Telcordia Offers Plan B, and Telcordia Unveils Dynamic Pricing Tool.)

"The hardest thing [for Telcordia] will be getting visibility in a very crowded market," says the analyst. "Policy management is strategically very important, and there's no question that mobile operators are very keen on deploying one or another set of tools."

Cobb acknowledges significant competition from four or five vendors on the network side, but claims that Telcordia is strongest on the software front, where it differentiates with policy flexibility. With many other wireless operators expected to follow AT&T into some kind of tiered-pricing structure, he says it's the hottest market to be in, and will ultimately have room for more than one player as carriers figure out what works best for them.

Heavy Reading's Finnie also expects to see further growth in the policy control market. "All mobile operators are looking for ways to use policy engines to differentiate and refine mobile data services, rather than just offer all-you-can-eat data packages," Finnie adds. "They want to create more value for customers and get them to spend more money, frankly. It's driving investment in this area."

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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