MOBILIZE THE DATA PLAN THE ALCATEL-LUCENT SMART PLAN SOLUTION STRATEGIC WHITE PAPER Around the world, mobile and fixed-mobile operators are evolving their approach to mobile and broadband tariffs. These service providers want to shift their focus toward offers that can capitalize on the growing demand for mobile data and stabilize declining voice and SMS revenues. To make this shift, they need flexible solutions that help them build compelling offers and business models around mobile data. The Alcatel-Lucent Smart Plan solution addresses this need by enabling service providers to create offers that simplify, personalize and extend the data-centric service experience. This flexible payment, charging and policy control solution helps service providers reduce operating costs while giving customers greater control over their services. This flexibility also improves service providers ability to partner with other players to explore new business models and create unique offers. Service providers can leverage Smart Plan to complement their retail strategy and create a new convenient touch point on customers mobiles. Through either Smart Plan s built-in mobile app or APIs to their existing app, service providers can offer customers easy access to their product catalog and services. By providing a retail shopping experience that customers can take with them, service providers can encourage spur-of-the-moment purchasing of telecom products.
TABLE OF CONTENTS Introduction / 1 Seeking business model innovation / 2 The importance of experience / 2 The Alcatel-Lucent Smart Plan solution / 3 Smart Plan Builder / 4 Smart Plan Mobile Apps and Web browser support / 5 Rules Engine / 5 Plugins / 5 Online Charging System Plugins / 6 Policy and Charging Rules Function Plugins / 6 Customer and Network Analytics Plugins / 6 Loyalty and Campaign Management Plugins / 6 Professional and Consulting Services / 7 Simplify the experience / 7 Personalize the experience / 8 Extend the experience / 10 Go to market faster / 11 Conclusion / 11 Acronyms / 12 Contacts / 12
INTRODUCTION Smartphone penetration and mobile Internet usage are on the rise. Globally, 19 percent of all handsets are smartphones and 30 percent of mobile customers are mobile Internet users. 1 Customers are embracing an increasingly connected lifestyle that demands easy access to broadband data services and content. To keep pace, service providers need payment, charging and policy control systems that can boost profitability while addressing customers evolving demands and expectations. Legacy prepaid and postpaid models aren t equipped to address this increasingly complex and competitive environment. Service providers are looking for better ways to segment, target and charge for their offers. They recognize the importance of adapting their approach to pricing. Increasingly, they also recognize the value of using demographics and psychographics to identify, understand and tailor offers to a variety of market micro-segments. Some leading service providers are already taking steps to overhaul their mobile pricing strategies. 2 These providers want to develop business models that increase mobile data use. New pricing strategies give them more opportunities to encourage new users to try mobile data and inspire early adopters to use more mobile data. Innovative pricing is also helping to stabilize declining voice and SMS revenue. For example, some providers offer customers the ability to share a single mobile data plan across multiple devices, including smartphones, tablets and laptops. As part of these plans, customers pay a device access fee to share data across devices and gain unlimited use of voice and SMS services. New thinking about payment, charging and policy control can bring new ways to engage with customers and encourage service use. Many consumers avoid using data services because they worry about exceeding the limits of their plans. A recent UK-based study reveals that about half of mobile customers don t know how much data they use, and that most have no idea what happens when they exceed their data limits. 3 Service providers can inspire confidence and encourage service use by enabling customers to control their mobile spending and choose subscription plans that suit their lifestyles. Consumers clearly want to use more connected devices and services. ABI Research projects that the global volume of mobile data traffic will exceed 107 exabytes in 2017 eight times more than what s projected for 2012. 4 Service providers have to keep increasing network capacity while continuing to provide great value to customers. With flexible payment, charging and policy control mechanisms, service providers can build new business models that monetize capacity, generate new revenue and keep customers coming back for more. 1 Ahonen, Tomi. The State of the Union blog for Mobile Industry all the stats and facts for 2012. Communities Dominate Brands blog post, February 27, 2012. 2 AT&T data fees to jump in new shared plan option. Telecom Engine, July 19, 2012. 3 Managing your megabytes: How fear of data charges is driving mobile users to WiFi. PricewaterhouseCoopers LLP, February 2012. 4 Worldwide Mobile Data Traffic Will Exceed 107 Exabytes in 2017, But That Doesn t Imply a Data Tsunami. ABI Research, July 2012. 1
SEEKING BUSINESS MODEL INNOVATION Service providers are being challenged to meet increasing demand for mobile data. Consumers now use multiple connected devices. Their focus is shifting from voice and SMS to data-centric offers. Quality of experience (QoE) and pricing are their top priorities. Service providers worldwide are rethinking their voice- and SMS-centric business models and building new offers that center on mobile data. For example, some service providers have launched offers that enable phones, laptops, and tablets to share from a single bucket of data. They bundle these data buckets with voice minutes and text messages in some cases unlimited voice and SMS. Customers are offered flat access fees for each device and a variety of options for shared data. Offers like these are new to the industry. They represent a major evolutionary step toward a charging model that can consolidate multiple subscriptions, promote device adoption and facilitate revenue uptake. This model encourages customers to embrace data services while preserving their interest in voice and SMS. For service providers, this model presents opportunities to generate new data revenue, earn customer loyalty and stabilize declining voice and SMS revenue. THE IMPORTANCE OF EXPERIENCE The shift toward data-centric plans demands a greater focus on customer experience. Customers are interested in plans built around mobile data. But data plans are still new to many customers. Service providers need to encourage more customers to think and feel confident about data-centric plans and give them compelling reasons to embrace these plans. A superior customer experience is an essential part of this process. In adapting their business models to data-centric usage trends, service providers face three key challenges relative to customer experience: 1. Remove customers fear of exceeding their data, SMS and voice usage allowance 2. Satisfy individuals needs without increasing the operational burden 3. Build compelling offers that generate new revenue The way forward for service providers is to build attractive offers around the data component of the mobile plan and to provide an easy-to-access mobile retail experience for telecom products and services. Since the advent of the mobile device, every aspect of the digital economy the network, web sites, applications, hardware and lifestyles has adapted to become part of the fast-growing and lucrative mobile arena. Everything, that is, except for the mobile data plan itself. With a flexible, modern, data-centric approach to mobile offers and a mobile app complementing their retail strategy, service providers can address this shortcoming and enhance the customer experience. 2
THE ALCATEL-LUCENT SMART PLAN SOLUTION The Alcatel-Lucent Smart Plan solution enables service providers to build compelling data-centric offers for every target market from traditional voice users to heavy mobile data users. It increases revenue and decreases overhead by making it easier for customers to understand, tailor and manage their own service plans. The Smart Plan solution helps service providers address three key objectives: Simplify the experience: The solution enables service providers to reduce churn and ease customer fears by empowering customers to take a larger role in controlling their mobile spending and usage. This empowerment helps service providers lower management costs and simplify operations and support. Personalize the experience: The solution helps service providers increase impulse buying and maximize network yield with offers that address diverse customer behaviors and lifestyles. It supports these offers using Agile Rules Technology (A.R.T.) to process advanced analytics and other contextual and network data. Extend the experience: The solution helps service providers bring more value to the network and build partnerships with other brands. Through partnerships, service providers can create unique offers that excite customers and generate new revenue. The Smart Plan solution is an agile, dynamic solution that integrates easily into existing service provider ecosystems. Figure 1 provides a high-level view of the solution and its key components. The sections that follow the figure describe how these components contribute to the solution. Figure 1. Smart Plan solution integrates easily into existing ecosystems SMART PLAN SOLUTION Smart Plan Mobile Apps Web Apps SMART PLAN BUILDER OCS Plugins PCRF Plugins Analytics Plugins Loyalty and Campaign Plugins Other Plugins SurePay ICC 5780 DSC (PCRF) Network and Customer Analytics Loyalty and Campaign Management Other Systems Professional and Consulting Services 3
Smart Plan Builder The Smart Plan Builder simplifies the task of creating flexible data-centric plans and offers. Built on the Alcatel-Lucent 5780 Dynamic Services Controller (DSC) platform 5, it manages interactions between mobile users and network elements. Service providers can use these interactions as the basis for creating catalogs of personalized offers. These offers can take advantage of a broad range of network enablers, including: Matching tariff plans and real-time processing across online charging systems (OCS) Policy and Charging Rules Function (PCRF) Loyalty and campaign management systems Analytics Service providers can also use the Smart Plan Builder to automate the commercial offer processes. Automation allows service providers to address customers needs with real-time, personalized and dynamic contextual offers for data, voice and SMS services. Figure 2. The Smart Plan Builder SMART PLAN BUILDER Smart Plan Mobile Apps Smart Care Contextual Offers Smart Notification Service Orchestration Rules Engine Web Apps Plugin Framework The Smart Plan Builder (shown in Figure 2) includes four key components: Smart Care, which consists of a set of APIs to enable mobile customers to manage their mobile plans and browse and purchase new personalized offers. Smart Notification, which enables mobile customers to receive real-time notifications about new personalized offers and account status updates (for example, an alert about a low account balance or an approaching usage threshold). Contextual Offers, which enable service providers to build relevant, segmented offers based on available services, real-time network information, customer analytics and user preferences. Service Orchestration, which is a flexible, sophisticated, and trigger-based function designed to execute real-time actions across various network elements to reduce operational overhead; for example, to subscribe or unsubscribe to a particular service bundle. In addition, the Smart Plan Builder interoperates with customer-facing applications and browsers, and with a rules engine that can define business logic for specific service flows. These components are described in subsequent sections. 5 Alcatel-Lucent 5780 Dynamic Services Controller 4
Smart Plan Mobile Apps and Web browser support A great mobile retail strategy needs a great point of entry the mobile app to complement service providers existing channels: brick-and-mortar stores, online stores and customer care centers. Smart Plan Mobile Apps help service providers enhance the customer experience by moving their entire product catalog closer to customers and enabling customers to manage their plans and usage on popular ios and Android smartphones and tablets. These brandable apps combine use of the Smart Plan Builder s RESTful interfaces with ios and Android push notification services. This combination not only optimizes the user experience around shopping and managing of their telecom needs but also allows service providers to reduce time to market for new services. Service providers can use the Smart Plan Builder s RESTful interfaces to build their own mobile apps or extend existing apps. Service providers can also provide a Web-based user experience by using these RESTful interfaces in a Web portal. Rules Engine As part of the 5780 DSC platform, the Smart Plan Builder inherits a powerful rules engine called Agile Rules Technology (A.R.T.) built with over 150 pending patents. 6 A.R.T. is known for its ease of use, performance, scalability, flexibility and maintainability. A.R.T. helps service providers save time and money as well. After initial deployment, service providers can leverage A.R.T. to easily and quickly define or enhance business logic and service flows on their own for selected use cases without having to wait for new software upgrades or additional consultation. A.R.T. also improves run-time efficiency by anticipating and caching the key data requirements of each mobile data, voice or SMS service flow. It triggers the service orchestration when it encounters specific conditions. Modeling with A.R.T. effectively reduces the complexity of all use cases. Thanks to A.R.T., network performance is excellent and does not deteriorate based on scale or complexity. Plugins The Smart Plan solution can adapt to a multitude of deployment scenarios across many different external elements. To offer service providers the greatest level of flexibility, the Smart Plan Builder uses an abstracted layer, the plugins, to represent generic external systems. The plugins come with a pluggable framework so the Smart Plan Builder can easily and quickly process data and orchestrate services across the various systems in the network. Initially, the solution is pre-integrated with Alcatel-Lucent online charging system and PCRF products. The solution roadmap will continue to add more pre-integrated Alcatel- Lucent components. The pre-integration with our online charging system and PCRF is a big time saver in the initial deployment for service providers. Service providers can also work with us to create and adapt custom plugins to integrate their own existing systems for policy, charging, analytics and many other systems. The strength of the plugin framework is that the plugins can be added or modified as part of field integrations without creating the need for new custom software releases. 6 The A.R.T. of Policy Management. Alcatel-Lucent White Paper. 5
Online Charging System Plugins The Smart Plan solution is pre-integrated with Alcatel-Lucent SurePay 7. As required, the solution can use its pluggable framework to integrate with Alcatel-Lucent Instant Convergent Charging (ICC) 7 suite and service providers existing OCSs. The Smart Plan Builder interacts with the OCS to provide customers with clear, real-time views of their service plans, spending and usage. It can also build chargeable, personalized and contextual offers for specific customer or market segments to promote incremental real-time purchasing. When coupled with OCS, the Smart Plan Builder enables service providers to create innovative tariffs and business models that address evolving demand for mobile data, voice and text services. Policy and Charging Rules Function Plugins Defined by 3GPP, the PCRF offers a standard set of Diameter-based interfaces. Using these interfaces, service providers can instantiate policies into the network to support a given business model. These policies determine how to treat specific packet flows (QoS) and how to count, charge and report on specific flows down to the application context. The Smart Plan solution is pre-integrated with a plugin to support the Alcatel-Lucent 5780 DSC (PCRF) the same platform used by the Smart Plan Builder. The Smart Plan Builder relies on the PCRF to act as a network mediation device. Using the PCRF, it can communicate with the network to receive updates while instantiating policies according to service provider-defined business models. Support from Agile Rules Technology (A.R.T.) 8 ensures premium performance, scalability and ease of use. If required, service providers can use the Smart Plan solution s pluggable framework to integrate with their existing PCRF solutions. Customer and Network Analytics Plugins The Smart Plan solution helps service providers use analytics to create personalized service offers. Through the analytics plugins, the Smart Plan solution can be developed to connect to network and customer analytics systems such as the Alcatel-Lucent 9900 Wireless Network Guardian 9, the Motive Analytics solutions 10 or existing analytic systems. With insight into per-device usage trends and enhanced customer and network intelligence, service providers can increase customer loyalty and revenues across mobile, fixed and video networks. Loyalty and Campaign Management Plugins Through the loyalty and campaign management plugins, the Smart Plan solution allows service providers to enhance the user experience with personalized campaigns and incentive programs. These campaigns and programs can help increase loyalty, reduce churn and stimulate service usage. As a part of the solution roadmap, Smart Plan can be integrated with service providers existing systems including Alcatel-Lucent Loyalty Management and Campaign Management (LMCM) 11. LMCM enables service providers to establish automated, two-way communication 7 Alcatel-Lucent SurePay and ICC 8 The A.R.T. of Policy Management. Alcatel-Lucent White Paper. 9 Alcatel-Lucent 9900 Wireless Network Guardian 10 Motive Analytics 11 Alcatel-Lucent Loyalty Management and Campaign Management 6
with prepaid and postpaid customers. Service providers can use this communication to deliver highly targeted real-time and near real-time campaigns. The LMCM application helps service providers develop deep insights into customer preferences. They can then use these insights to offer real-time rewards that surprise and delight customers. Professional and Consulting Services Alcatel-Lucent offers a comprehensive suite of professional and consulting services that further enhances and strengthens the core value proposition of the Smart Plan solution by allowing service providers to empower their users, engage new business models, and maximize customer lifetime value in more innovative and cost-effective ways. These services are built on the expertise and experiences of business consulting and network integration, and have been industrialized into a unique end-to-end, use case-driven framework that consists of three specific phases: Definition, Design, and Deployment. By working with a service provider and the appropriate internal stakeholders (for example, business partners, product teams, engineering and IT teams), Alcatel-Lucent can help them define, design and deploy targeted use cases that meet their specific business objectives. SIMPLIFY THE EXPERIENCE With the Smart Plan solution, service providers can build a simple, branded experience around mobile data. They can make it easy for customers to understand and manage spending, track consumption, perform self-care, and control their mobile data experience in real time. They can also extend this simplicity and control to other services, including voice, SMS and converged services. Consider this example: Heather, shown in Figure 3, is about to board a train to the airport for an international flight. She s going to use mobile data on her phone as she travels, so she needs to make sure her family plan will support her usage. Since Heather downloaded the Smart Plan Mobile App to her phone, she doesn t need to contact customer service to check on her account. Figure 3. Building a simple mobile data experience using a data usage estimator 7
While waiting for her train to arrive, Heather uses the app to access her account. She sees how much data she has used so far this month and how much she has spent on it, all updated in real time. Heather sees she has 100 MB of data left, but she s not quite sure how far 100 MBs will take her. She wonders whether she has enough to stream a movie or upload photos throughout the trip. Heather checks the app s mobile data estimator and sees that she doesn t have enough of a data allowance to watch a show on the train and post all of her pictures to Facebook and Twitter. With her data limit translated into practical terms, Heather knows she needs more data. The Smart Plan solution offers Heather several different ways to add to her data pool. For instance, she can top up her account by purchasing more mobile data, right from her mobile device. The Smart Plan solution automatically applies the change and charge in real time as shown in Figure 4. Figure 4. Example of balance transfer and refill TRANSFER REFILL Since Heather is on a shared plan, she can also choose to transfer data from a member of her family. Her plan combines multiple mobile allowances into a well of data that is shared by the whole family. Using her app, Heather can set limits, allocate data and transfer data between her family s accounts. She can set thresholds and get warnings as she approaches her data limit. She can even make sure that no one accidentally uses up the entire family s monthly data allotment. PERSONALIZE THE EXPERIENCE Service providers can use the Smart Plan solution to create flexible data plans and contextual offers that are tailored to customers unique lifestyles and preferences. These plans and offers can adapt in real time as customers needs and desires change, and reward customers for their loyalty. The result is a more meaningful and personalized experience for every customer. 8
For example, Heather s service provider knows that she is a high-value customer. Its analytics show that Heather has been a loyal subscriber for 5 years. Heather s service provider also knows, based on her opt-in preferences, that she is a big Facebook user. To reward Heather for her loyalty and retain her as a customer, the service provider offers her a free package that covers all social media traffic for a month (Figure 5). She receives a contextual offer and accepts it. The offer immediately shows up on her Smart Plan App. Figure 5. Personalizing the mobile data experience with a social media package After she boards the train, Heather logs in to her Facebook account to catch up with friends. The network detects this traffic using deep packet inspection (DPI) that was authorized by Heather through an opt-in mechanism that protects her privacy. The Smart Plan solution ensures that traffic from Facebook is counted but not charged. Checking her Smart Plan app, Heather sees no decrease in her data usage balance. Later, Heather decides to watch a movie on her tablet, which also has the Smart Plan app installed. Knowing her viewing habits, Heather s service provider offers her the opportunity to purchase an HD with High Speed upgrade for the movie. Heather chooses this option and enjoys her movie in a higher quality as shown in Figure 6. Figure 6. Example of HD and roaming offer 9
Eventually, Heather gets on the plane and reaches her international destination. Heather s service provider knows that she travels regularly. It also knows which type of roaming plan she is most likely to accept. When Heather s plane lands, the service provider automatically offers her the roaming plan that best meets her needs as shown in Figure 6. The plan saves her money and provides a better option than not using her mobile connection while she s traveling. The service provider benefits by earning additional revenue from Heather s purchase. The Smart Plan solution s Agile Rules Technology enables service providers to segment customers needs and desires according to a broad range of factors, including demographic, churn likelihood and loyalty. This segmentation ensures that only offers with a high probability of acceptance are sent to each customer. EXTEND THE EXPERIENCE The Smart Plan solution opens the door to new relationships that can lead to lucrative partnerships and business models. By sharing the solution s flexible payment, charging and policy control capabilities with an ecosystem of partners, service providers can extend the mobile data-centric experience to new domains and bring more value to the network for businesses and consumers (Figure 7). Figure 7. Extending the experience through new business models Monetization Network Capabilities Retailer/ Advertiser Ecosystem Pre-paid Advertisement Enabled Post-paid Sponsered Service Smart Plan Builder Merchandise PCRF Loyalty PCEF Analytics OCS Sales Rewards Programs Special Offers Coupons Personalized Subscriber Experience Service providers can begin to extend the experience by reaching out to other key brands, including retailers, advertisers and content providers. Through partnerships, service providers and brands can combine their capabilities to build offers and plans that excite customers, win their loyalty and generate new revenue. For example, brands or retailers could purchase blocks of mobile data points from service providers at a bulk or wholesale rate. They could then use these points to reward shoppers for their loyalty. Shoppers could redeem the points to increase their mobile data allowance, pay for new offers or offset existing bills. The offer would help each partner monetize its capabilities while delivering the personalized experiences that customers crave. 10
GO TO MARKET FASTER The Alcatel-Lucent Smart Plan solution integrates readily into any service provider ecosystem. This ease of integration speeds service development processes and helps service providers go to market faster. The solution accelerates time to market with operational benefits that extend throughout the entire service lifecycle. These include: Removal of barriers to service and offer conception Smooth interoperation during deployment Quick and easy service creation, modification and evolution Quick deployment of services to new network capabilities during network expansion and when introducing new network elements The Smart Plan solution is designed and built to address the high-performance demands of the mobile data-centric service experience, including real-time responsiveness and unified management of users and services. The solution s Agile Rules Technology (A.R.T.) dynamically addresses the challenges inherent in going to market with personalized offers. Its easy-to-manage network and subscriber rules enable service providers to respond instantly to business demands, customer segments, network usage patterns and market evolution. CONCLUSION At Alcatel-Lucent, we are innovating to connect the world around us. We help service providers roll out nationwide commercial LTE services, deliver industry-first shared data offers, optimize networks and create new services. Now, with the Alcatel-Lucent Smart Plan solution, service providers can mobilize the data plan, simplifying and personalizing the experience in a way that inspires customer loyalty while increasing revenue and decreasing overhead. In addition, they can use the Smart Plan solution to extend the experience to partner brands and explore new sources of revenue. Alcatel-Lucent s expertise spans the entire mobile, fixed and converged charging ecosystem and the complete customer experience. We know the network. Our customer experience consulting expertise can help service providers develop prioritized and actionable business plans, and conduct periodic business reviews based on use cases to mobilize the data plan and to achieve the anticipated business benefits. Our multi-vendor integration capabilities can ensure that service providers remain flexible with their charging, billing, payment, and loyalty solutions now and into the future. 11
ACRONYMS 3GPP API A.R.T. BSS CLV DPI DSC HD LMCM OCS OSS PCRF REST QoE QoS SMS The 3rd Generation Partnership Project Application programming interface Agile Rules Technology Business support system Customer lifetime value Deep Packet Inspection Dynamic Service Controller High definition Loyalty Management and Campaign Management Online charging system Operations support system Policy and Charging Rules Function Representational State Transfer Quality of experience Quality of service Short Message Service CONTACTS For more information on the Alcatel-Lucent Smart Plan solution and its related products and services, please contact your local account team. You may also click here and select the speak to a sales representative option. www.alcatel-lucent.com Alcatel, Lucent, Alcatel-Lucent and the Alcatel-Lucent logo are trademarks of Alcatel-Lucent. All other trademarks are the property of their respective owners. The information presented is subject to change without notice. Alcatel-Lucent assumes no responsibility for inaccuracies contained herein. Copyright 2013 Alcatel-Lucent. All rights reserved. M2013015603 (February)