The exciting move into an all – IP environment has been creating a lot ripple effect in the telecom industry. The consumer is so excited that everyone is just jumping into the bandwagon equipping themselves with smart phones that will enable them to enjoy the services offered to an all IP environment. And as the consumer anxiousness and anticipation grows, telecom operators are scrambling not on only to prepare what they can offer in terms of services and packages but in terms of how it can be delivered efficiently into the new environment.

Like a simple home network management principle, the new environment would entail a lot of facets to be able to deliver an outstanding quality of service to the customer. Managing the network is one of the most important parts as we move into the next phase of the technology. Response time, latencies, throughput, reliability and quality of service will all from part of the consideration in the network management.

But as the telecommunication industry is undergoing a period of unprecedented change. New technologies have introduced in the market. Thus customers are increasingly sophisticated and is demanding more from their service providers in terms of competitive pricing, better quality of service, a wider range of service and more applications that have not been available in the past. And as technologies continues to advance, network standards to evolve, bandwidth capabilities expand, and telecom software becomes more flexible, robust and bandwidth intensive. The capabilities of the network and the requirement of the customers is where innovation in terms of service.

Operators and vendors scramble to juggle on all these things that need to be considered to the next level of technology, more and more have been focusing on the right mix formula that would tailor fit the need of their customer and be able to respond to the market efficiently. Thus the importance of policy management came about and is currently one of the primary components for a telecom operator to efficiently provide quality of service.

Traditionally policy management is referred to as the systems and processes associated with ensuring that various types of network traffic receive the availability and bandwidth they require. As such, the policy management function has traditionally been owned by the network department within most communications service providers. Using policy management capabilities, network managers have been able to set static rules that govern the priority given to traffic based on variables such as time of day. Policy management functions usually comprises into these categories. First is Traffic shaping, these are when we use local rules on routers to balance network load and accommodate service level agreements (SLAs). Second is the QoS management where in we set rules for the allocation of bandwidth per service.

As services and applications become increasingly sophisticated, they also become more intensive in terms of bandwidth. These new demands on the network are often being generated by a small subset of users, and operators must either endlessly invest in the network to support these users’ requirements or find a way to manage their network usage to avoid abuse of network resources. Finally, end users have higher expectations for their telecommunications services than they may have had in the past. Assumptions about the reliability of wireless and IP services have changed over the last few years, with consumers of these services increasingly expecting the same quality of service as they have received from the circuit-switched wireline network. At the same time, customers are demanding more personalized services that address their specific needs, particularly as end user devices become more sophisticated and feature-rich. This has driven interest in capabilities such as fixed-mobile convergence, or availability of services regardless of device type.

The Market Today

According to the report published by Infonetics Research dated March this year. The wireless network investment is driving the policy market growth and the worldwide policy management revenue reached $418.7 million in 2010, a 55% increase over 2009, with deployments in the wireless space rapidly outpacing deployments in the largely mature fixed line market. Managing bandwidth consumption remains one of the greatest drivers for policy server deployments by mobile operators, and as smartphone and PC-based data traffic continues to overload 3G networks, the trend cannot be receding anytime soon. But in addition to that, policy management is also being used to provide value added services. Including guaranteed bandwidth for certain categories of subscribers and/or content, sophisticated service control capabilities, and the start of more targeted advertising campaigns and offers.

Operators in emerging markets such as Africa, Latin America, Eastern Europe, and parts of Asia are also focusing on using policy control capabilities, often in conjunction with real-time charging systems, to create innovative loyalty programs and payment options to combat high churn rates, particularly in areas where the subscriber base is primarily prepaid.

In addition, other factors that have contributed to the unprecedented growth on policy management are;

• Regulatory factors - such as the data roaming regulations implemented in the EU that are likely to be replicated in North America, which require wireless operators to implement real-time subscriber spend notifications and a cut-off mechanism once the subscriber’s bill reaches a certain limit; in the US, mobile operators are breathing a sigh of relief, as the FCC’s net neutrality rules seem to exempt them from regulation, and ongoing challenges of the FCC’s fixed line restrictions may result in those rules ultimately being overturned
• Rapid growth of IP-based traffic, and the need to move beyond best-effort management for IP services such as VoIP
• Growth in peer-to-peer traffic, of which affects bandwidth control
• Service innovation, such as triple play services, off-peak bandwidth boosting, and value-added services such as parental control and enterprise management of employee cell phones
• Plans and pricing, including tiered service plans based on speed of connection, bandwidth consumed, or both, with subscribers who consume more than their allotted bandwidth often charged an extra fee as an incentive to move up to the next tier.

The Race to Lead

Competition in the policy market is heatin up, with the top suppliers holding extremely close market share. Openet has pulled into the leading position in the overall policy management market with 9% of market share, followed by Bridgewater Systems and Tekelec. Openet as well leads the wireless market with 11% of revenue, followed by Bridgewater, Huawei, Ericsson, Nokia Siemens, and Tekelec. The wireless policy market also includes a large number of smaller suppliers that have focused their attention on the increasing wireless opportunity, often combining policy management solutions with adjacent solutions like charging, as well as larger IT and billing vendors that have branched into the policy market wireless opportunity.

The Quest Goes On

The challenges for operators to be able to juggle deliver service efficiently to the customers in relation to what their networks are capable of will continues. And to strike an even balance on such, policy management is playing a crucial role. As operators move away from their traditional all-you-can-eat billing strategies and begin introducing tiered pricing, they will need policy control capabilities to manage subscribers’ bandwidth caps, particularly if those bandwidth quotas are distributed across multiple device or network types. When integrated with charging, policy control also enables operators to go beyond tiers and offer more real-time, flexible pricing models, such as variable pricing based on time of day or the subscriber’s location, or charging for a bandwidth boost during peak usage hours for certain services. So the challenge will not sole be based on what customers wants but what operators can offer, and this should be wielded along with vendors and how they weave their magic and create different offering in policy management.