INCREASING LTE REVENUES:

TOP 10 INNOVATIONS AND OPERATOR EXAMPLES

Increasing LTE Revenues 2
LTE means high speed and high capacity this has been driving data usage and
inspiring innovations throughout the world. According to the GSMA, LTE users
consume on average 1.5 GB of data per month, which represents almost twice the
consumption of non LTE data users, many of whom exceed their data limits (see
Fig. 1). Furthermore, operators have been innovating, with new oers and business
models, to better capitalize on the demand, speed and capacity of LTE. All of these
mean more revenue opportunities.
In fact, a study from the GSMA has shown that the average revenue per LTE user
(ARPU) tends to be higher than the ARPU from non LTE users. In developing
markets, operators have found that ARPU from LTE users can be 7 to 20 times
higher than non-LTE users. In developed markets, operators have found that LTE
can generate 10 to 40% more ARPU.
Overall, LTE is not only the fastest developing mobile system technology ever
as stated by the GSMA (see Fig. 2), LTE is also driving innovation and revenues
for operators. This guidebook presents the top 10 service innovations that LTE
operators have launched to increase revenues, with recent examples and results.
It also discusses the key Business Support Systems (BSS) requirements for these
services, according to operators worldwide.
LTE Drives New Revenue Opportunities
Fig 2: LTE usage and ARPU stats (Source: GSMA Intelligence)
Fig 1: Share of Android 4G smartphone users using >100% of monthly data limit, by plan, major
markers, Dec-13 Source: Mobidia / Informa Understanding todays smartphone user 2014
ARPU from LTE users is higher
7-20 times in developing markets
10% to 40% in developed markets
LTE users consume twice as much data
3G
Increasing LTE Revenues 3 Increasing LTE Revenues
Many LTE operators are leveraging LTE speed to dierentiate, by using tiered
pricing to create perceptible value based on speed and encourage customers
to upgrade to higher packages. Below are some examples showing dierent
approaches to speed tiers:
y KPN oers data volume tiered packages with varying speed entitlements
y EE oers double speed and double data for an extra 3
y Telia, the worlds rst LTE operator, uses speed to enhance the value of
post-paid oers and attract more post-paid customers. Telia applies a speed
cap of 20 Mbit/s on its 4G pre-paid oers and provides maximum speeds up
to 100Mbit/s to its 4G post-paid customers.
y Orange France uses speed to dierentiate with its sub-brand Sosh: Orange
France oers maximum LTE speeds up to 150 Mbit/s on its main contracts,
whilst Sosh oers speed tiers varying from 14 Mbit/s 3G speeds to 150 Mbit/s
y Swisscoms Natel Innity plans oer the always popular unlimited data, using
speed as a dierentiating value (see Fig. 3). However, the speed is reduced to
64kbit/s when a specic amount of data is consumed. They stated in their 2013
report: Figures from recent quarters shows that customers switching to
Natel innity are generating higher revenues (ARPU)
Using LTE Speed to Dierentiate:
Speed Tiers
Fig 3: Swisscom Natel Innity plans
Increasing LTE Revenues
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LTE has brought the opportunity to not only use speed as a dierentiator but
also to upsell high-speed. Some operators have been leveraging LTE speed to
develop dierent upsell strategies:
Upselling high speed add-ons and temporary speed boosts
A1 Telekom Austria is oering high speed add-ons to supplement base tiered
packages with lower speeds (see Fig. 4).
Upselling time of the day speed and unlimited data
A1Telekom Austria was also oering its business customers a data add-on
(Eur 8.25) with night time access (22:00-08:00) to unlimited data, at full speed
as per their base package. This is an interesting approach to managing speed
and network resources whilst oering the always popular unlimited to create
a new data revenue stream.
Upselling data (volume) add-ons to restore the speed
Another approach adopted by Ooredoo is to oer tiered data packages (see
Fig. 5) and reduce the customer speed when they reach their limits before the
end of the month. Customers can then purchase various data add-ons Extra
packs to restore the speed.
Using LTE Speed to Dierentiate:
Speed-Based Upsell
-
Fig 4: A1 Speed add-ons
Fig 5: Ooredoo My Net offering
2
My Net
Unifed internet packs
and much more
The new My Net packs from Ooredoo,oer
you high speed internet at aordable rates.Now
you can browse and download freely with out
worrying about bills, as the new control page will
help you monitor your usage 24/7 and buy Extra
packs when needed.
Increasing LTE Revenues 5 Increasing LTE Revenues
According to research rm Juniper, almost 75% of roamers worldwide do not
use data services*. Most roamers choose to turn o mobile data or substantially
reduce usage for fear of bill shock. The EU Parliament has tackled this issue
by voting to abolish roaming charges altogether from 15 December 2015. The
question therefore for many operators today is how to keep driving revenues
from travellers.
T-Mobile US have implemented an interesting approach. They oer unlimited
data whilst roaming as part of their Simple Choice Plan (see Fig. 6); however
the speed is limited to 128Kbit/s. Whenever customers require higher speed, they
can purchase high speed data roaming passes that provide total cost control;
they oer 1 day/100MB, 1 week/200MB and 2 weeks/500MB passes. The plans are
also subject to fair usage rules and include unlimited SMS while roaming.
This approach is very attractive for customers as they can access data abroad
for free even though at low speed; yet the operator can still generate data
roaming revenues by upselling high speed roaming passes.
Driving Data Roaming Revenues With No Roaming Charges:
Upselling High Speed Roaming Passes
Fig 4: A1 Speed add-ons
Fig 5: Ooredoo My Net offering
Fig 6: T-Mobile US Simple Choice Plan
*Source: Juniper Research, Mobile Roaming Report, October 2012
Increasing LTE Revenues
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In a recent survey, 84% of operators revealed that they will invest in solutions
for smart upsell oers, triggered by real-time context information, such as
network usage, application access, location and more (see Fig.7). This will
help operators to maximize upsell opportunities and sales conversion rates
as the oers are more relevant and timely. For example, a subscriber on a low
speed data package, accessing Netix, could trigger a high speed add-on oer;
Another subscriber trying to access Facebook with no data package could
trigger a data pass oer with unlimited access to Facebook.
One operator successfully used this approach to stimulate data adoption by
upselling real-time data passes (10MB for 1 day) to subscribers who had no data
plan when they tried to consume any data. They used data passes to provide
total cost control and remove any fear of bill shock (see Fig. 8).
Maximizing Upsell Opportunities and Uptake:
Real-time Contextual Upsell
Subscribers with no data
plan trying to access data
Data pass oers in real time
(e.g. 10MB per day)
10% conversion to recurring
monthly data plans
17% growth in data usage
26% growth in data users
Fig 7: Global survey of 100 operators Operators BSS Strategies, Telecoms.com Intelligence
Fig 8: How an operator successfully stimulated data
adoption through real-time contextual upsell
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According to a 2013 survey by telecoms.com, 80% of operators are planning
to launch VoLTE within 24 months of launching LTE (see Fig. 9). Knowing that
voice and SMS represent about 60-70% of operator revenues globally*, voice
remains an important service to capitalize on. With VoLTE, voice becomes data,
which provides the opportunity for operators to develop more innovative voice
and data bundles. VoLTE enables operators to enrich their customer experience
by providing high quality audio to better compete with over-the-top (OTT)
providers. Furthermore, with VoLTE, operators will be able to eliminate legacy
voice networks to reduce complexity and save cost.
Overall, about 40 VoLTE deployments and trials are ongoing. 9 VoLTE networks
have been launched so far by AT&T, T-Mobile US, Evolve Broadband in the USA,
O2 Germany, CSL in Hong Kong, Azercell in Azerbajian, SK Telecom, LG U+ and
KT in Korea. Verizon, Telus and EE are also deploying VoLTE. Below three launch
examples:
y AT&T launched its VoLTE services AT&T HD Voice in May 2014, with
marketing messages focusing on call quality. AT&T HD voice also provides
simultaneous voice and data at 4G LTE speeds and is oered at no
additional cost.
y SK Telecom launched VoLTE in August 2012 and now has 50% of their LTE
subscriber base using VoLTE **
y LG U+ launched 100% LTE voice, meaning that all their voice calls are purely
LTE based. They stated that their 100% LTE voice call success rate is as
high as 99.89%***
Enriching the Voice Experience & Competing with OTT:
Voice over LTE (VoLTE)
Fig 9: Survey results, Telecoms.com Intelligence, February 2013
* GSA, Mobile HD voice, March 2014 ** Analysys Mason, Jan 2014 *** Korea Joongang Daily, Aug 2013
34%
27.4%
6.6%
13.2%
18.9%
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In todays multi-device ownership market, allowing multiple users and mobile
devices to share a common pool of data is proving a win-win for operators and
customers (see Fig. 11). With shared data, operators are leveraging LTE capacity
to extend their user base, accelerate data usage and spend. It is currently one of
the most popular plans among LTE operators worldwide. Operators who have
implemented shared data plans include AT&T, Verizon, T-Mobile US, EE, Orange
Slovakia, Telstra, Telia and more.
Shared data is proving to be a real success story for mobile operators. As an
example, AT&Ts mobile share accounts tripled year on year to reach 11.3
million accounts and represent 45% of the post-paid subscriber base, with an
average of 3 devices per account. AT&T also reported a high 46% take-up rate
of their larger data plans with over 10GB of data; this represents a 70% growth
from the previous quarter.
AT&T has further extended the concept of shared data to cars with Audi:
Audis AT&T-powered in-car LTE service starts at $99 for 6 months, 5 GB.
Additionally, starting this summer Audi will become the rst car maker to oer
an AT&T Mobile Share shared data plan option to AT&T customers who would
like to add their vehicle to their existing Mobile Share plan. (Source: Fierce
Wireless, March 11, 2014)
Accelerate Data Usage and Revenues:
Shared Data PlansExtended
Fig 11: Smartphone app for sharing/gifting
Gifts
Gifts
Fig 10: AT&T Mobile Share Advertisment
View Short Video >>
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Increasing LTE Revenues 9 Increasing LTE Revenues
Fig 11: Smartphone app for sharing/gifting
Sponsored data enables customers to access mobile content, apps and overall
data services, free of charge, with no impact on their data allowance. The data
charge is paid by the sponsoring company, which could be a content provider,
advertiser, retailer or a business operating a Bring Your Own Device scheme to
pay for specic business related apps and services used by employees.
Sponsored data benets all parties; it enables sponsors to access the operators
subscriber base and drive more trac and subsequent revenue, thanks to the
appeal of free data; it also enables operators to create new sources of revenues
from multiple industries, and customers to enjoy free data.
AT&T has recently launched sponsored data and Hersheys premium line
of Scharen Berger chocolate is one of the rst brands to leverage it with
a mobile advertising campaign. The ads are running as banners within the
Pandora iPhone app. A click-through on the ad brings up a landing page
showing a video, with a message explaining that watching the clip is free and
will not aect their data allowance. The ad also indicates that the video is
sponsored (see Fig. 12).
Creating New Sources of Revenue:
Sponsored Data
Fig 12: Scharffen Berger ad campaign leveraging AT&T
Sponsored Data (Source: Mobile Marketer)
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Content is increasingly being used by mobile operators to augment the value
of their oerings, attract customers and stimulate data usage. LTE reinforces
this trend enabling operators to oer high value, even high denition mobile
content and enhance the customer experience.
More operators are partnering with OTT and content providers to package
various types of high value content on LTE. These include music streaming with
Spotify and Deezer, TV, lms, social media such as Facebook and gaming.
For example, Vodafone UK launched LTE with Spotify premium or Sky Sports
included in its Red 4G plans. They are also partnering with Netix to enable
customers to enjoy TV programmes and lms on the go for 6 months, as part
of their plans as of July 2014, anyone signing up or upgrading to a Vodafone
Red 4G plan can opt for Netix as their entertainment pack of choice.
T-Mobile Netherlands sells the Deezer music streaming service to its
customers, enabling them to pay directly via their mobile accounts, which is of
benet to subscribers as its simpler; it also enables Deezer to benet from a
new sales channel and reach the operators subscriber base indirectly (see Fig.
13).
Oering high value content has proven to signicantly reduce churn. Orange
France for instance has indicated that customers with an active Deezer
connection are twice less likely to terminate their Origami oer.
Increasing Value and Data Usage:
High Value Content Partnerships
image music flm
Fig 13: T-Mobile Netherlands Deezer oering
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Application service passes oer a data entitlement to use a specied
application or group of applications for a dened time period. Application
service passes provide total cost control and simplicity, which removes any fear
of bill shock. This, combined with the popularity of some applications and social
media, enables operators to stimulate data adoption and usage. A number of
operators have launched application service passes.
For example, Axis Indonesia oers daily, weekly and monthly Viber only
passes. Movistar Mexico also oers 30, 7 and 3 days data passes with
unlimited access to a bundle of popular apps such as Facebook, Twitter,
WhatsApps and e-mails, in addition to some data allowance (see Fig. 14).
However the speed is reduced to 64Kbps after 1GB of unlimited app
consumption.
Leveraging Popular Applications to Stimulate Data
Adoption and Usage: Application Service Passes
Fig 14: Example of Movistar application service passes
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Maximizing Loyalty and ARPU:
Real-time Interaction & Purchase
By providing real-time visibility and control to customers, operators can
stimulate trust, customer satisfaction and subsequent loyalty. This means real-
time notications for all customers whether pre-paid or post-paid and self-care
dashboards on the device (see Fig. 16).
Real-time notications also represent an opportunity for operators to upsell,
as LTE subscribers regularly exceed their data limits. EE for example sends
notications at 80% and 100% of data usage; the notication includes a link
for customers to buy a one-o data pass. Customers must then either buy a
data pass or their data access is blocked until the next bill. Another operator
revealed that they achieved, on average, over 20% of sales conversion simply
through up-selling data with threshold alerts.
Operators can further give customers the exibility to buy now on the
device and have their service delivered immediately anywhere; this approach
is viewed by 74% of operators as the most successful strategy to build loyalty
and increase ARPU (see Fig. 15); this can also generate reduction in customer
service and sales costs.

Fig 16: Selfcare app with Dashboard
Fig 15: Survey of 80+ operators Charging & billing for the digital economy, Openet, 2013
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Increasing LTE Revenues 13 Increasing LTE Revenues
In a recent survey of 101 operators, 89% said that existing BSS limitations can
delay new product innovation and launches. The operators surveyed stated the
following as the main reasons for delays.
- No one single system to centrally develop, launch and manage oers
- System integration work is too complex
- Systems are heavily reliant on vendors to set up new oers
- New rate plans can be too complex
Also 64% of operators said that IN charging systems were designed for circuit-
switched voice services and therefore not totally suitable for data (see Fig. 17).
As a result more and more operators are evolving their legacy BSS, including IN
charging and billing systems, towards real-time and more agile BSS solutions.
The Foundation for LTE Service Innovation:
The Need to Evolve Legacy BSS
Fig 17: Survey of 80+ operators
Charging & billing for the digital economy, Openet, 2013
37%
23%
9%
31%
Increasing LTE Revenues 14
The following statistics sum up the key BSS requirements for LTE service
innovation and faster time to market according to mobile operators worldwide:
80% of operators stated that LTE is driving them to move towards BSS
solutions that are real time, with 85% saying that billing systems need to evolve
to become real-time*
70% of operators said that IN prepaid charging will be replaced by real-time,
online charging systems within the next 4 years**
73% said that integrated policy and real-time charging/OCS (PCC) and the
extension of PCC to the device (61%) using a secure interaction gateway are
important in enabling innovation**
Finally, 79% of operators said that a centralized oer catalog is important in
accelerating time to market**
Below is the real-time BSS architecture that summarises the above,
representing the foundation for LTE service innovation:
The Foundation for LTE Service Innovation:
The Move Towards Real-time, Agile BSS
Fig19: Top 10 LTE Service Innovations Fig 18: BSS foundation for LTE service innovation
Music
Player
Music
Player
3G 4:08 PM
Speed Tiers
Speed-Based Upsell
Shared Data
Sponsored Data
Real-Time
Contextual Upsell
High Speed
Roaming Passes
Application
Service Passes
High Value
Content Partnerships
VoLTE
Real-Time Interaction
& Purchase
* Telecoms.com Intelligence, Operators BSS Strategies, global survey of 100+ operators
** Charging & billing for the digital economy, Survey of 80+ operators, Openet, 2013
(PCRF)
(OCS)
Increasing LTE Revenues 15 Increasing LTE Revenues
Since the introduction of mobile data services in 1998, Openet has helped
service providers capitalize on opportunities and overcome challenges. With
competitive pressure accelerating, todays service providers rely on Openet
software to evolve business models around networking smartphones, M2M
devices and third party services. Openets portfolio combines policy and
charging control with device and third party interaction to enable innovative
charging models, to control operating cost and to personalize services. More
than 80 of the worlds largest service providers across over 32 countries use
Openets high performance software.
Openet has helped operators worldwide take advantage of growth
opportunities by evolving legacy platforms to provide a exible, real-time
charging/OCS capability integrated with policy control (PCC).
For more information, please visit www.openet.com.
www. o p e n e t . c o m
About Openet
Fig 20: Openet Real-Time Transaction Management Software
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