Mobile Video

Tekelec Plays Mediator for Operators & Apps

DUBLIN -- Management World -- Tekelec is helping wireless operators welcome -- reluctantly, for some -- over-the-top (OTT) applications into their fold with upgrades to its Diameter Signaling Router (DSR), announced Tuesday.

The DSR sits in the operator core and can now connect OTT apps, such as social networks, video or music services, to the network, giving the operator a direct billing relationship with the app and the ability to extend its policies and service rules to it. The idea is that the wireless operator can change up how they bill for said services or even get the OTT player to subsidize usage of its app in exchange for not counting it against the data cap.

Another example Michael Heffner, Tekelec's director of product management, suggested is to have video count against the cap only in standard definition, but charge the app provider for the bandwidth required to deliver an HD video.

Tekelec also said Tuesday that it has signed up six mobile operators and four hub providers for DSR since the beginning of March, bringing its total to 19 customers across 10 countries. (See Tekelec on a Tear and Tekelec Launches Signaling Router.)

Why this matters
The wireless operators have a tenuous history with OTT apps that ride on their networks and, in a lot of cases, make more money than they do. In fact, earlier this month Sprint Corp. (NYSE: S) CEO Dan Hesse spent much of his time on stage in a CTIA keynote bemoaning this dynamic, saying several times that companies like Apple Inc. (Nasdaq: AAPL) and Amazon.com Inc. (Nasdaq: AMZN) "ride over the top of wireless investments."

That may tick the wireless operators off, but it's become a fact of life for them, so their best bet may be partnering. As Heffner says, they both have something that the other wants. For the OTTs, they want the last-mile access to subscribers and control over network quality. For the wireless operators, it's clearly about more revenue. It might not be an arrangement YouTube Inc. would agree to, Heffner concedes, but he says a Netflix Inc. (Nasdaq: NFLX) or Hulu LLC would likely be on board.

"Over-the-tops have capitalized on the fact that the giants were asleep at the wheel," he says. "But, they can't guarantee QoS, and they don’t own the last mile. The carriers do. Now these guys are waking up [to the fact] that they control a valuable link on this chain."

For more

— Sarah Reedy, Senior Reporter, Light Reading Mobile

optodoofus 12/5/2012 | 5:32:32 PM
re: Tekelec Plays Mediator for Operators & Apps

I am really tired of hearing how PCRFs and now - apparently - DSRs are going to enable all these innovative billing solutions through which carriers can monitize third-party applicaitons.  Ain't gonna happen.  While the basic technology may be there, there are a host of obstacles in the way : regulatory concerns, unwillingness to pay from the third parties, inflexible billing systems, non-scalable and overly complex LTE QOS mechanisms, etc.

Color me skeptical.  I'll believe it when I see it.

Tekelec would be better off putting their engineering efforts into making scalable Diameter solutions rather than focusing on innovative billing solutions.  While the thought of additional revenue may be appealing to carriers, the ability to scale a network to support hundreds of millions of subscribers and machines is a real and immediate problem for carriers right now.  All the markeitng slides in the world aren't going to help build a robust network solution.  If Tekelec can solve that problem, they will make a lot of money.  If they continue to focus on pie-in-the-sky innovative billing, they will end up with lots of articles on Light REading but no money in the bank.


joset01 12/5/2012 | 5:32:26 PM
re: Tekelec Plays Mediator for Operators & Apps

I mostly share your sentiment here. Verizon CTO, Tony Melone, however, did pipe up that "toll-free billing" -- hotels and whatnot covering calls and sessions within their walls -- was becoming an option for Verizon. But yeah, how much further it goes is completely open to question.

mheffner77 12/5/2012 | 5:31:31 PM
re: Tekelec Plays Mediator for Operators & Apps

The concerns you raise are valid, although we are not dealing with this problem in a single dimension as you may have interpreted from the article...  The focus of the discussion with Sarah was around higher-layer business value that can be derived from our Broadband Network Solutions (BNS) portfolio - and more specifically, how can we help operators address the very real concern they face in competing/cooperating/etc. with OTT and 3rd party content providers.  Obviously, underpinning all of this discussion, we must be able to deliver a platform that is rooted in scalability, reliability, high availability, etc.  These characteristics are deeply rooted of the Tekelec BNS portfolio - born from our history in the SS7 signaling realm but evolved to meet the new challenges that we face in the transformation to IP.  While operators need to find ways to innovate their businesses and business models, they also realize that innovative ideas that get adopted by tens of millions of subscribers still require scalability and five 9's reliability.  This point was emphasized during the CIO Roundtable at the TMF (with participation from large providers such as BT, Vodafone and Telefonica).  Actually, if you look at the published material on our web site (http://www.tekelec.com/resource-center/briefs.asp) in the Policy section and Diameter Signaling section, there are numerous white papers and briefs dealing specifically with scaling the new network.

And while some of this stuff we are talking about is forward looking, you can see by Dan Jones' comment that there are some operators who "get it" and are looking at including some of these ideas as part of their innovation plans.  I think we can all agree that there is a lot of work to be done but change and evolution must be backed by a solid vision - which I believe is what Tekelec is laying out to the industry.


Mike Heffner

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