Policy control is more about enabling than controlling

Written by on June 7, 2016 in Opinion with 1 Comment

policy-muitplayYou would be forgiven for thinking that policy control is all about mobile. Certainly, mobile is where it started. It is, however, important to remember that policy control is also a sharp-edged marketing tool, says real-time specialist Openet Telecom. It is equally important to understand that it can be a double-edged sword.

Take the Netflix effect. The amount of data that Netflix and other online video services use has driven a large increase in the amount of data being consumed. Ofcom, the UK regulator says that the amount of data downloaded increased by 93 percent between 2013 and 2014, and the speed increased by 28 percent. This sounds like good news, but an HD video from Netflix can eat data at 3GB an hour and an Ultra HD video can account for 7GB an hour. Even with a significant data allowance, that does not make for much viewing before, say, a 20GB bucket is used up.

Policy control allows an operator to send alerts about data usage – along with solutions – to customers to avoid the dreaded bill shock. Bill shock is still one of the pressing issues for customer experience. Managing it, by alerting customers, and indeed telling them about, for instance,  turbo boost options to better manage large downloads, must make sense, according to the Openet white paper, ‘Policy in a multi-play, multi-network world’.

Multi-play reduces churn, and for every new element to the ‘play’ or bundle, the likelihood of churn goes down. As the paper says, ‘with mobile churn at almost 22% and quad play at 2.5% the case for multi-play is very strong’. But take care, while the churn rate might go down the more services you offer, it may be for the wrong reasons. Instead of customers being delighted with you for offering all they could ever need, it may be that they are so confused by what happens if they cancel something, or want to change something, they are simply waiting until the end of the contract to cancel everything. Policy can play a role in managing customer expectations in this increasingly complex arena.

Policy, it turns out, has many more applications and uses for operators than at first glance. It can manage shared data plans, where a family, for example has complex and different needs, that might span both home applications and, for instance, public Wi-Fi applications. Operators, such as Vodafone, are taking advantage of the opportunities by making a big deal about parental controls, also the domain of policy management.

Not only are there multiple uses in shared data and managing the quality of service for those demands, but marketing has further opportunities awaiting. Some operators are on the case with sponsored data and content partnerships. Vodafone, again, is offering to ‘pick up the Netflix bill’ for a year, as an incentive to get customers onto their LTE network. As the cost of data falls ever further, the ability to zero rate high bandwidth applications can only increase and can only make such offerings more compelling. Ono, the Vodafone shop in Spain, is extending the offer to over a million Wi-Fi hot spots managed by the operator. An example of using policy to manage network offload.

Policy is not just the tool to manage video and other content applications and partnerships. Banking, for instance, is an opportunity to take advantage of policy management. In Brazil, Banco Bradesco wanted more of their customers to use their banking app. With the cost of an in-branch transaction sitting at $4.25 and the cost of the same transaction on a mobile device sitting at 8 cents, it is not hard to see why. The bank worked with operators to zero rate their banking app – visibly, on the handset – and the results were impressive. Mobile banking users increased from three million to seven million in a 14 month period and the bank is predicting that 40 percent of all their banking transactions will be via mobile by the end of 2016.

It is, says Openet, important to think outside the box when it comes to third-party applications.

While overages are one of the dangers for operators when it comes to churn, there is at least one operator who seems happy with the revenue overages generate. As Suddenlink’s outgoing chairman said on a recent earnings call, ‘overage charges have become a significant revenue stream for us’ although he did go on to say that he did not want them to ‘become too big of an allowance for us.’ This is not to be recommended if you want to keep your customers, and is comparable to the ‘dark revenue’ generated from paper bills, which are now widely charged for.

There is more detail and more insight in this paper, which you can download here for free (short but quick registration is required) but it provides an excellent overview of the potential of policy control, which is far beyond the initial remit of managing customers’ data limits. Marketing will love it.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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  1. Bob says:

    ‘Policy management’ or policy control has always seemed to me to be a very strange concept. Since it first emerged – mid-2000’s? – we’ve talked about it as though it were a discrete function – like billing, charging or mediation. But in the sense that it’s no more than codifying business rules and applying those rules to business events or data, policy control is no more than a variant on our old friend data processing. In a sense, almost everything in IT is ‘policy control’ – ‘billing’ applies the company’s billing policy to network events, automated CRM applies its customer management policy etc. In recent years we’ve been automating, and making smarter, access to network resources – particularly data – and services, but it’s still fundamentally data processing… has it benefited our thinking in any way to treat policy control as a discrete business function?

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