EV-DO: CONTROLLING CHALLENGES

AND CREATING REVENUE OPPORTUNITIES WITH TIERED SERVICES

WHITE PAPER

EV-DO: CONTROLLING CHALLENGES AND CREATING REVENUE OPPORTUNITIES WITH TIERED SERVICES

INTRODUCTION EV-DO, the new high-speed wireless technology, is coming fast to the market. While offering significant speed improvements and opening up a set of new application opportunities for Wireless Service Providers, EV-DO brings its own set of challenges to the table, including usage issues such as poor network performance, additional costs, and user complaints. Service Providers need to be proactive about dealing with these issues to fully leverage the benefits of EV-DO. In this document well discuss the challenges that EV-DO presents and identify a set of practices that Service Providers can implement to help control costs and leverage EV-DO to increase revenues.

EV-DO MEANS IMPROVED OPPORTUNITIES AND BENEFITS By implementing EV-DO, Service Providers have the ability to improve speeds significantly, in fact, essentially equivalent to that of broadband. CDMA2000 1xEvolution Data Only (EV-DO) is a recently implemented technology that optimizes the radio network to provide high-speed data services to wireless services. With basestation upgrades, Wireless Service Providers can deliver speeds of 300 to 600 Kbps with peak rates up to 2.4 Mbps for downloads effectively accelerating wireless device data speeds up to 10 times faster than whats available today. EV-DO is already being implemented by major Service Providers such as Verizon Wireless and Sprint in the United States and others worldwide. According to the CDMA Development Group (CDG), CDMA2000 1xEV-DO is leading in the deployment of 3G broadband networks worldwide, with 11 commercial networks, 18 additional systems to be deployed this year, and an established subscriber base exceeding 8.3 million users.1 With improved speeds, Service Providers are able to provide superior application performance to subscribers with handsets or laptops equipped with EV-DO cards. It opens up a whole new range of applications that may not have been practical at slower speeds, including interactive gaming, downloads, and higher speed browsing, as well as delay-sensitive applications such as voice and video over IP. For corporate customers, it means mobile subscribers can use their corporate email programs rather than maintaining an additional webmail account. Web pages will load much faster, and subscribers will be able to access and work with corporate applications previously not practical with slower speed wireless data services.

EV-DO ALSO MEANS CHALLENGES With this increase in speed, wireless networks will effectively face the same performance challenges as broadband networks: bandwidth is scarce and EV-DO offers always-on high-speed services. This puts Service Providers at risk of an over-consumption of available bandwidth when it is offered at an unlimited flat rate to subscribers. In many broadband networks, experience has shown that 5% of subscribers are known to consume up to 60% of bandwidth in resource-intensive applications such as peer-to-peer (P2P) file sharing and gaming. In some cases, the connection is maintained indefinitely, tying up network resources. With the widespread use of EV-DO, these same issues will become a challenge for wireless Service Providers. Equally serious from a Service Providers perspective is the loss of revenue from voice services. EV-DOs higher speed makes it attractive for subscribers to use Voice over IP (VoIP) over the data network especially if the data service is offered at a flat rate with high bandwidth and reasonable low latency. This jeopardizes the Service Providers ability to sell voice minutes and push-to-talk services. This combination of unlimited flat-rate access and always-on high-speed service threatens carriers with revenue loss and increased customer care. In spite of the improved speed and because of it subscribers can face poor quality service and unpredictable network access.

1 Press Release CDMA2000 1xEV-DO IS LEADING THE DEPLOYMENT OF 3G BROADBAND NETWORKS WORLDWIDE, CDMA Development Group, September 7, 2004.

EV-DO: CONTROLLING CHALLENGES AND CREATING REVENUE OPPORTUNITIES WITH TIERED SERVICES

MEETING EV-DO CHALLENGES HEAD ON There is a solution to control costs, prevent EV-DO traffic from devouring revenue, and even increase revenue. This solution involves creating tiers of services based on volume, quality, and/or speed. To do this, Service Providers must meter usage limits and use policy-based control to enforce tier parameters based on subscriber usage.

BANDWIDTH-BASED TIERS

IMPLEMENTING TIERED EV-DO SERVICES

TIERED SERVICES

Bandwidth-based tiers limit how much data a user can pass in and out of the network. An EV-DO network may support data rates of 600 Kbps: for users who find normal 1xRTT slow but dont want or need the full speed of EV-DO, bandwidth tiers could be set up to increase their maximum available speed per second by two or three times. This is similar to DSL models in which subscribers have a basic or lite service from which they can upgrade to subsequent levels for additional charges.
QUALITY-OF-SERVICE (QOS)-BASED TIERS

To effectively implement tiered services, Service Providers must be able to both meter usage and apply policy-based controls on subscribers to take necessary actions to ensure the parameters of the service tiers are being followed.
METERING USAGE

POLICY-BASED CONTROL

METERED USAGE

CREATING TIERED EV-DO WIRELESS DATA SERVICES

Quality of Service becomes extremely important in VoIP, video, and some enterprise services. Poor QoS for these types of services means no latency or jitter guarantees, which will result in the voice traffic breaking up and video traffic being choppy and difficult to watch. In general, best-effort QoS will provide an inconsistent experience for the subscriber, with the experience being good on some occasions and bad on others. A premium QoS-tiered service will ensure that subscribers do not experience these issues and will ensure consistency in their experience.
COMBINED TIERS FOR MAXIMUM FLEXIBILITY

In order to offer and control tiered services, Service Providers must be able to effectively meter usage. Every subscriber has a usage limit defined for their service tier: metering tracks the amount of data a subscriber transfers over a period of time normally the subscribers billing period and verifies usage against this limit. If the subscriber exceeds allowed usage, policies in the policy control system outline actions to be taken. Metering works by totaling up the usage information contained in the RADIUS accounting messages generated by the PDSN. These records are generated during every session the user starts and are fed through the AAA to the metering system. The metering system adds the byte counts from these messages to a running total and saves it as a total in a usage profile for the subscriber. Should the total in the subscribers profile exceed the limit of the service package, an action is initiated against the subscriber by the control system. Once a month, on a given date, the running total in the subscriber profile is reset to zero.
POLICY-BASED CONTROL

One of the advantages that the wireless industry has is that subscribers are generally accustomed to some form of limit, such as limited calling minutes. As a result, it should be a straightforward process to get customers to adopt tiered services. Instead of offering flat-rate services, Service Providers can create a set of tiered services that effectively control usage and provide additional revenue opportunities. Tiered services can be based around volume of data consumed, bandwidth, and quality of service.
VOLUME-BASED TIERS

These three types of control can be mixed and matched in almost limitless combinations to give subscribers real flexibility in their services. Here are a few examples: > Basic tier email and browsing only: unlimited volume, 256 Kbps bandwidth, best-effort QoS > Mid-tier service: 1 GB volume per billing period, 400 Kbps bandwidth, best-effort QoS > High-volume tier: 3 GB volume per billing period, full 600 Kbps bandwidth, best-effort QoS > Enterprise tier: 3 GB volume per billing period, full 600 Kbps bandwidth, premium QoS

In this type of service, a limit is set on the volume of data that can be consumed over a period of time, which can be effective at controlling users that monopolize bandwidth. Once the volume limit is reached, service can be limited or discontinued. For heavy-volume users, a self-serve portal can be set up to allow them to increase their volume for an additional premium charge, either for a short period of time to the end of the month, for instance or on a continuous basis.

To effectively and flexibly control subscribers who have reached their usage quota, the metering system must be accompanied by a policy control system. This system is responsible for managing subscriber and action profiles to deal with heavy users. Once quotas are reached, the policy control system will provide instructions to the PDSN to control a subscribers path through the network. When the subscribers usage exceeds a service tier as defined by their profile, this results in some type of action being applied to the subscribers service. Several different policy actions can be set to deal with different tier scenarios:

EV-DO: CONTROLLING CHALLENGES AND CREATING REVENUE OPPORTUNITIES WITH TIERED SERVICES

AAA / PDSN SUPPORT AND STANDARDS

ABOUT BRIDGEWATER SYSTEMS Bridgewater Systems develops the industrys most advanced subscriber-centric policy management software for IP-based services. Its solutions help global Service Providers maximize profits and launch new services faster. Bridgewater does this by providing Service Providers with a unified view of their subscribers across all access technologies. With Bridgewaters software, Service Providers have an intelligent policy-decision point for the management of subscribers, applications, and network resources. The Bridgewater Systems product suite delivers high-performance policy management via its market-leading authentication, authorization, and accounting (AAA) and Dynamic Host Configuration Protocol (DHCP) systems. It also offers a range of modular products for application support, mediation, and dynamic broadband management. Bridgewater Systems proven carrier-class products deliver on-demand data services, extensive revenue-capture capabilities, and out-of-thebox value that can be deployed in weeks instead of months. More than 40 leading Service Providers from around the globe (including Verizon Wireless, Sprint PCS, Bell Mobility, and Virgin Mobile USA) trust Bridgewaters technology and business insight to help them deliver world-class services. Founded in 1997, Bridgewater Systems is a privately held company.

> A subscriber that has used up the allotted service usage for the month can be disconnected from the service until the following billing period begins. > Alternatively, using a hotlining feature available in the PDSN or Home Agent (HA), the Service Provider can redirect subscribers to a portal that offers continued service for the month at a pro-rated fee. This presents convenience to the subscriber and an excellent revenue opportunity for the Service Provider. > The Service Provider may wish to reduce bandwidth back to 128 Kbps to discourage a subscriber from excessive usage. Policy-based control provides an excellent opportunity to encourage subscribers to upgrade services. Service Providers can offer a try-before-you-buy plan allowing subscribers to take a free trial of the next tier for a limited time before again being subjected to their service plan policies. And with subscriber self-serve portals, Service Providers give subscribers the ability to make changes to their tiered services in real time, offering flexibility and convenience.

Implementing tiered services in an EV-DO network requires that the AAA and PDSN or Home Agent are able to support bandwidth profiling, bandwidth limiting, and user redirection. Standards such as IS-835D are in development that will allow the definition of service tiers within the AAA system and the PDSN. Although this standard is not yet available, there are vendor-specific features available on many PDSNs and HAs that can make this a viable solution in the short term. With full support from AAA servers, a complete system can be put in place today with a simple migration to standards-based solutions when they become available. For PDSNs that do not support bandwidth limiting, metering can still be performed but with limited options: once the subscriber exceeds allotted usage, the only option is to purchase more usage. CAPITALIZING ON EV-DO Its not enough for Service Providers to simply offer flat-rate EV-DO services. To effectively capitalize on EV-DO, Service Providers must be in a position to control the small number of very heavy users who add significantly to the operational expenses of the network. They must also be able to use tiered services to launch new packages of different speeds, data volumes, and quality levels to generate new revenue streams over and above basic flat-rate services. To do this effectively, Service Providers must meter subscriber usage and use comprehensive policy-based controls to manage their service tiers and extract maximum value from EV-DO networks.

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