REDKNEE

THE FUTURE OF DATA RATING, CHARGING AND POLICY

The Future of Data Rating, Charging and Policy

The wireless industry is in the midst of a transformative phase. While it is true that it has always been in a state of constant growth, the progress we are seeing today is more disruptive than anything seen since the introduction of the first handheld wireless handset in 1973. As with any industry transformation, there will be companies who plan for change, and those who resist. New technologies and new business models will need to be embraced. This paper is about how service providers can best prepare to ensure they have the systems in place to fully leverage the benefits of new 3G and 4G networks. Real-time rating, charging and policy play an important role in the new ecosystem, helping to protect your network and enable new charging models, better quality of service, and greater customer loyalty.

rate plans, the majority of subscribers have been subsidizing the heavy data use of a few; paying high fees for a data plan they may actually use very little of. Todays problem is that many of the low volume users are now becoming heavy users themselves, so this model is no longer efficient. New data-intensive devices such as smartphones, Apples iPhone and iPad, along with services such as mobile broadband and YouTube have made almost all subscribers data-hogs. Watching an hour of YouTube clips is the equivalent in terms of data usage to sending a million text messages. Downloading a movie over a mobile device equals almost 400,000 emails. And laptops that surf the Internet over a mobile network are further taxing network capacity. With the growing field of machine to machine (M2M) communication around the corner, soon practically every devicefrom the vehicle you drive, the gas meter outside your home, and even your refrigerator - will be tapping into data networks. This sudden uptake in data demand has left operators scrambling to increase capacity, dumping millions of dollars into building out their networks in hopes of keeping up with todays unquenchable demand for data. In order to combat this problem, many of todays operators have been using methods to target their heaviest users; purposely slowing their network speeds and reducing
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A Change in Mindset
With the introduction of 4G services and LTE networks, the wireless business model is rapidly changing. Flat rate data plans are being replaced by a multitude of new tiered pricing models that will end up being beneficial, and in many ways more cost effective, for most subscribers. Under flat

Redknee The Future of Data Rating and Charging 2010 All Rights Reserved

the quality of service for the heaviest users. Redknee believes this is the wrong mindset. Service providers should be in the business of providing service- not limiting it. Our data rating, charging and policy management solution enables operators to support new pricing models that encourage increased usage and better quality of service while boosting average revenue per user (ARPU) and protecting the network from capacity strains.

network, it is imperative that service providers establish back-office support systems (OSS/BSS) that can adapt to this environment. The importance of an open architecture and APIs cannot be overstated. Furthermore, the ability to support service level agreements (SLAs) and QoS standards puts added responsibility on the service provider. At Redknee, all of our solutions have been built on these standards, and will aid in supporting the growing list of SLAs resulting from new partnerships.

Changing Business Models

Unwired Insight reports that mobile Web traffic will increase more than 20 times over the next four years. To prepare for this, many of the worlds leading operators are upgrading their network architecture to Long Term Evolution (LTE). This provides the much needed increased capacity and speeds to help accommodate todays new devices, and will change some long standing business models. One of the most significant changes will be the increase in third party partnerships between operators and content providers, including mobile advertising. In the past, mobile content was limited to ringtones and photo sharing. Since the introduction of the iPhone and other smartphone devices, a new world of content including movies, mobile apps and access to Facebook and Twitter have changed the game plan. Because this new content comes from new partnerships and requires quick on-boarding to an operators

Redknees Three Pillars of Success

1. Rating and Charging Flexibility With todays ever-increasing demand for data, traditional all-you-can-eat payment plans are no longer practical from the service providers perspective, and it is clear that operators are moving towards tiered pricing for data services. Tiered pricing plans are actually more beneficial to all subscribers. Low volume users no longer will be subsidizing the use of heavy users, and new bundles will be introduced that will give subscribers the types of services they are most interested in- and willing to pay for. Although paying for what you use is certainly a concept most subscribers can understand, tiered pricing puts new demands on an operators rating and charging solution. Instead of a simple flat rate, now various packages and tiers of service need to be individually rated,
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Redknee The Future of Data Rating and Charging 2010 All Rights Reserved

charged and enforced. Redknees Next Generation Rating and Charging (NGRC) enables operators to track, rate and charge for data usage in real-time. It enforces tiered pricing levels and supports single use, or bolt-on, services. Redknees NGRC provides the flexibility required to support almost any type of bundled offering. Service providers can help build customer loyalty by offering more personalized packages. For instance, a Facebook bundle that supports enhanced social networking apps and services aimed at high school and college aged subscribers; or for the business user, an instant messaging/email bundle. For long road trips, parents can opt for a bolt-on package that allows for unlimited movie downloads so their kids can be entertained on the long car ride. The same type of pay-for-what-you-use concept has been fairly standard in the prepaid market, which has seen an upsurge as the quality of prepaid handsets has made this type of service more appealing. Prepaid Blackberrys and 3G Smartphones now provide the types of services and content to a prepaid market that only postpaid subscribers used to enjoy. Redknee believes that payment type shouldnt dictate service availability. Subscribers should be able to get whatever type of service they want, and pay for it whichever way works best for them. To do this, service providers need a rating and charging system with the flexibility to

dynamically track quotas, usage, rates, and individual profiles - all in real-time.

2. Integrated Policy Control With flat-rate pricing, there is no incentive to promote heavier usage of data. Instead, service providers have been using policy management to police their networks and dissuade the heaviest users even going to the lengths of degrading service and sending out warning notices. With tiered pricing and prepaid plans growing in popularity, Policy Control, or PCRF, shifts from controlling costs and degrading service, to generating revenue and ensuring quality of service. Redknee considers this the second pillar of success. Policy Control, especially when integrated to the charging layer, helps to enhance the user experience. It can track when subscribers data use goes beyond a certain threshold so the operator can send balance notification alerts and help avoid the dreaded bill shock. User profiles and preferences can be supported, creating a more personalized user experience and helping to engage and empower the subscriber. In a recent survey, Light Reading predicts service providers will add a new policy every six to eight weeks. Polices set around service delivery will impact various triggers, including location, network type, device, the subscribers tier, URL, type of application, time of day, subscriber preferences, etc. The list is practically endless, bringing a new level of personalization and quality to the mobile
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Redknee The Future of Data Rating and Charging 2010 All Rights Reserved

subscriber, greater customer loyalty, and more revenue to the service provider. Yet in order to gain these benefits, back office systems must be closely aligned. In fact, Light Reading also states that, service providers need to use policy in a new way and work to integrate it with backoffice operations and support systems and with other functions such as charging. Redknees NGRC is a fully integrated rating, charging and policy solution that is in production at some of the worlds largest mobile networks. 3. Personalization The third and final pillar of success is about subscriber personalization. Todays subscribers have more control over their entire mobile experience. Service providers can better segment their market and deliver highly targeted promotions, including 3rd party advertisements and incentives based on all types of criteria- from the type of handsets subscribers have, to their current location and demographic data, along with historical usage patterns. For instance, if Joe regularly uses the GPS function on his handset, the operator will want to notify him when a new GIS app comes out, or send promos for the latest GPS enabled handset if his two year contract is about to expire. And perhaps Joe would like to opt in to receive SMS coupons for his favorite coffee shop when hes in the vicinity. Family plans also benefit from personalization options. Parents can assign bandwidth policies to their individual

family members, ensuring that 13 year old Sarah cant access Facebook during school hours, but still provides her with access to her schools online homework portal.

Why Redknee
Todays new services and technologies require a flexible rating and charging engine that is pre-integrated with an industry compliant Policy Management solution, or PCRF. This powerful trio helps to ensure service providers can remain competitive in a world where the old rules no longer apply. Redknees focus on innovation and technology leadership has led to more than 50 issued patents or patent-pending applications, many in the area of real-time transaction management. The fact is, data has changed everything and Redknees NGRC is the fully compliant, flexible, real-time solution that will help you not only survive, but prosper, in todays new data-centric environment. Below are just a few recent examples of how some of our customers have benefited from Redknees award winning NGRC solution.

Zain Kuwait
CEO Khalid Al Omar commented, Since the launch of our first 3G connectivity cards in 2006, our data services have gained in popularity with our youth, Arab expatriate
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Redknee The Future of Data Rating and Charging 2010 All Rights Reserved

and inbound roaming market segments. By launching new flexible, tiered pricing plans, we are able to bring the benefits of mobile broadband in a manner that is attractive to new markets segments, such as the costconscious and light-usage customers, as we continue to concentrate on driving data revenue.

competitive advantage. Our further investment in Redknee will enable us to enhance the customer experience, deliver fresh and innovative services and capture market share, stated Muhammad Buldansyah, Bakrie Telecoms Deputy President Director.

Telefonica O2
Chief Technology Officer, Pat Moynihan of O2 Ireland, commented about their prepaid mobile broadband offering, and how Redknees NGRC played a key role. It was a priority for O2 to deliver a prepaid mobile broadband offering to our customers in 2009. Redknee was selected to deliver the project based on their technical NGRC solution that enables our customers to have real time and flexible charging capabilities. There was a very strong commitment throughout the project to deliver on our customers expectations and the feedback from our customers since launch has been very positive.

VivaCell-MTS
VivaCell-MTS in Armenia also recently launched a mobile broadband service, becoming the first internet connection to many of the regions underserved. Ralph Yirikian, VivaCell-MTS General Manager, stated, The number of VivaCell-MTS wireless broadband subscribers has grown tremendously since the Company launched its HSPA/UMTS-based 3.5G network, reflecting the intensifying demand for wireless broadband access in Armenia. Therefore, the priority for VivaCell-MTS now is to be able to support future data traffic growth. Due to our extremely competitive market, we are focused on always outstripping our competitors by providing differentiated products that appeal to our customers. Redknees support has been instrumental to our successful launch of the most innovative mobile broadband services to the people of Armenia.

Bakrie Telecom
At Bakrie Telecom, where the operator is launching mobile broadband, NGRC is the solution of choice. The competitive landscape that we operate in means that we are continuously looking to our partners to provide us with the tools to maximize our

Redknee The Future of Data Rating and Charging 2010 All Rights Reserved

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About NGRC
NGRC is a real-time rating, charging, and policy management solution for mobile data services. Recognized in 2010 by Billing and OSS World as the Best Service Enablement Tool, NGRC is based on patented technology and offers communications service providers the flexibility and scalability to launch new services, while creating new revenue streams based on diverse pricing options for both prepaid and postpaid subscribers. NGRC enables operators to rate and charge for all their data services, including in-

demand offerings such as mobile broadband and mobile TV, helping them to monetize these new services and drive ARPU growth. It gives service providers the flexibility to charge for these services in ways that work best for their subscribers, whether prepaid, postpaid, or a hybrid of both and based on time or bandwidth consumed. Redknees NGRC offers service providers a flexible and scalable solution that seamlessly integrates into existing systems, maximizing the current network infrastructure and differentiating its services from the competition. For more information, please visit www.redknee.com

For more information on Redknees rating and charging solutions, visit: www.redknee.com/products Or email us at: contact@redknee.com

Redknee The Future of Data Rating and Charging 2010 All Rights Reserved

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