The market for policy management solutions has been forecast by Analysys Mason to grow at 23% CAGR in the next five years. At the same time, network costs are reported to be growing faster than revenue. Ultimately, it has been suggested that costs will exceed revenue, the “nightmare” scenario for network operators.
This means that investment in policy management solutions has to pay dividends. The point of policy management is to deliver optimised, quality services to customers and to control the experience of individual customers. This has to generate some sort of return.
It’s early days for policy initiatives. While many operators have invested in such solutions, their use has largely been restricted to avoiding bill shock, ensuring the right charging plan has been applied and interacting with metering solutions to control allocations to customer pricing plans. However, many recognise that policy can go far beyond this and some have defined this as “Policy 2.0”. That is, the evolution of policy from a “defensive” position, protecting and assuring revenues, to a more forward-thinking position, enabling “innovation” and new ways of “monetising the network”, as has been well noted here.
But the threat of the revenue / cost divide means that this process needs to accelerate. This will require, not only continued investment in all the paraphernalia required to build policy-enabled networks, but also new investment in end user device based capabilities. Currently, this is the missing link in the policy chain. With the inexorable rise of user generated content and likely effect on congestion on the uplink direction in both fixed and mobile networks, the ability to monitor and manage traffic that originates in user devices and platforms will become critical. It’s been overlooked, but needs to be incorporated into solutions. Without it, policy frameworks may not be able to achieve their potential and generate the returns necessary to help address revenue shortfalls.