Realising the full potential of the mobile internet

The Holy Grail for analytics will be its ability to form predictions of what is likely to happen in the near future, based on historical and circumstantial facts.

It goes without saying that mobile internet usage has experienced significant growth over the past couple of years and has become an integral, irreplaceable part of many people’s lives. Analyst firm Forrester predicts that 125 million Europeans will access the mobile internet by 2013, more than tripling today’s users. On a more global scale, Cisco Systems estimates that mobile data traffic will double every year through 2013, reaching over two exabytes per month by 2013 .

On the one hand mobile data usage is being driven by our changing professional and social lifestyles: consumers expect faster, simple and omnipresent access to the internet. On the other hand, the rise in usage is a direct result of the way in which mobile operators, device manufacturers and all the other associated players in the industry make the web available to us on the go.

Increasingly, we are seeing userfriendly payment options for mobile broadband with bundled-rate and pay-as-you- go billing models; faster and higher bandwidth networks; and continuous improvements in mobile device capabilities.

The regular churn of new device models entering the consumer market is driving the range and quality of key features and functionalities; particularly in the area of user interface (touch-sensitive screens are the most obvious).

More traffic is good news for mobile operators and their bottom lines, but too much of a good thing can create significant challenges as operators struggle to fortify their networks for the growing number of transactions. Failure to prepare for this growth can have a dramatic effect. If operators are unable to accurately predict future growth in data volumes, they could miss out on the inevitable increase in ARPU.

‘One Web’ Experience

Bringing a high quality web experience on mobile devices has historically proven to be a challenging feat, specifically with regards to harnessing the power of a system that was designed to be used and viewed on personal computers with large screens and at broadband speeds. The launch of the iPhone changed everything – moving the industry toward a unified one web experience where the web experience on a mobile became tantamount to the PC.

Whether or not you bought an iPhone or one of its many clones, you understood what was possible. Mobile operators understood as well; one by one, their walled garden internet portals came down. They quickly realised that they could not sustain their revenue growth – let alone increase it – if they were to prevent access to off-net services. Their subscribers would just churn over to an operator that allowed open internet access.

New Rules for a New Game

Of course the f lipside of embracing a more open approach to off-net content is the risk of losing control of subscribers. Traditional WAP1 or WAP2 feature phones go through an intermediary proxy gateway owned by the operator for authentication, access control, transcoding (if applicable) and potentially other value-added services. This model allows the operator to maintain control of the user experience, and by suitable manipulation of proxy server logs, access a wealth of knowledge about users’ online behaviour. This includes trends relating to most popular sites, device types and average browsing duration.

Smartphones typically do not have proxy settings pointing to the intermediary gateway. They are similar to laptops in that their data traffic goes directly to the internet unaided. More importantly, most of the mobile internet traffic comes from smartphone users. According to comScore, in the UK nearly 80 percent of iPhone owners accessed news and other information via a browser, nearly four times the rate for all mobile phone users, and mobile e-mail was used by 75 per cent of British iPhone owners, making it the most popular type of mobile content consumed on the device .

Translation: operators are seeing a short term gain in data ARPU as a result of increased mobile internet usage, but they have far less visibility into what these high value subscribers are doing. The question is: how can these operators monetise the increasing amount of off-net traffic? The answer lies in regaining that bird’s-eye view of subscribers’ online behavior so they can offer them revenue-generating services which are deemed relevant and useful to each individual user.

The Role of Analytics

Operational Analytics

Mobile analytics services provide operators with business intelligence and reporting that not only describes what is happening in their network, but also provides insightful information as to why it is happening. The Holy Grail for analytics will be its ability to form predictions of what is likely to happen in the near future, based on historical and circumstantial factors. One of the major benefits of this type of service is its capability to provide early identification of mobile data trends and proactively help operators avoid potential bottlenecks.

Operators can leverage analytics to assist with critical operational functions such as network and capacity planning. This helps operators identify network congestion areas and predict trends where congestion is most likely to occur in the coming months. By proactive capacity planning, operators can defer CAPEX/OPEX costs and use bandwidth management solutions to address capacity problems.

Marketing Analytics

An in-network mobile analytics solution can turn the raw data on an operator’s network into actionable intelligence to help improve traffic flow and monetise traffic. Mobile analytics solutions can provide aggregate data that allows operators to understand what is occurring in their networks, both on-portal and off-portal, at a more granular level, so they can build a 360-degree view of the mobile subscriber.

Using the 360-degree-view of the customer, operators can understand the subscriber and the effectiveness of services by asking:

Once the subscriber is profiled, mobile analytics can enable up-selling of new services and service bundling. For upselling, operators should analyse the subscriber’s product preferences, their needs and spending threshold in relation to their particular segment.

For example:

Successful service bundles are those that are tailored to address the subscribers’ specific needs. Using mobile analytics, operators can analyze usage patterns of subscriber segments and then develop highly targeted services for those segments, driving increased ARPU.

Ecosystem Analytics

Mobile analytics offers real business value to competitive markets. It is critical to ensuring successful targeting by operators wishing to promote their own services. It also provides valuable information for advertisers. Besides increasing ARPU and improving customer satisfaction, mobile analytics can turn operators into information brokers engaged in powerful partnerships with advertisers, content publishers, and Web 2.0 companies who will pay a premium to reach a specific audience to create new revenue streams. Using mobile analytics, an operator can aggregate, anonymise and sell access to consumer data to ecosystem partners as a subscription service.

The mobile operator continues to occupy the ideal position in relation to the consumer who is also a mobile internet user. From their vantage point the operator uniquely collects the knowledge that is key to monetising the mobile internet. The more an operator can understand about their subscribers, the more they will be able to determine, and then provide, services that are not only relevant, but ones which subscribers might be willing to pay for.

The Time is Now

With mobile internet usage continuing to rise unabated through 2010, it is clear to us that the scale of the challenge facing the mobile industry is immense, but so is the opportunity. Leveraging the mobile operator’s network ownership and direct relationship with the consumer can deliver a fast, safe and seamless user experience, while providing operators with the monitoring tools to manage traffic and effectively market their services.

It is therefore paramount that operators embrace the situation head-on, invest in capacity and begin to develop services that will protect these investments and make the most of the coming opportunities. Some are already doing this, but if the industry and consumers are to really benefit, more need to follow.

Ken Denman is CEO of Openwave