Network operators benefit from understanding traffic types

21 November 2017 4 min. read

Towers channelling mobile phone traffic require increasingly complex investment strategies due to changes in consumer demand and technological advance. New techniques to identify the type of traffic that such towers carry allows operators to better allocate resources based on customer need, thereby improving customer-received usage experience and reducing churn.

The rapid proliferation of mobile devices as well as a growing demand for high-bandwidth services for content have created new dynamics in the network operators' market. As millennials continue to flock to on demand content, the absolute number of devices increases further, and investors turn to leveraging opportunities in the sector, mobile network operators are finding themselves in a period of uncertainty.

The uncertainty, according to a new Bain & Company report titled ‘Getting Quality Returns from Investments in Mobile Networks’, offers a host of opportunities, but also increased expectation from users to the reliability of expected service. The relative ease of switching operator means that delivering a superior customer-received usage experience (CRUX) has become increasingly important to preventing churn and generate steady revenue streams.Connected customers

As it stands, the increasingly competitive nature of the industry, coupled with limits to cash-flows, mean that investment in necessary upgrades become increasingly risky, while price-wars to reduce defections create potential industry-wide vicious cycles – further undermining the industry’s ability to invest in infrastructure.

Demand for services from customers is relatively broad across the day, with a wide variety of tasks leveraging networks from morning to night. Social media is a relatively consistent aspect of daily activity. However, more data-heavy types of activity are largely represented throughout the day, such as connected work and streaming media, which, depending on type, can create considerable bandwidth spikes. Yet, while network operators have a general ideal about what times networks are being used, and the weight of traffic, the rapid development of the market means that future oriented decisions are increasingly uncertain.The quality on investment curveThe nature of network upgrades is often related to individual ‘average throughput (bitrate) per user, and radio resource utilisation during busy hours in each cell’. Thus, if a cell is overwhelmed by demand, engineers are likely to invest in the upgrade of that particular cell-tower to smooth out performance. The consulting firm suggests that this measure misses key features related to customer usage type and the respective experience associated with that type, which may mean that upgrades miss the demand.

To better align customers’ CRUX with infrastructure utilisation, various network operators have explored the possibility of quality on investment (QOI) as a tool to assess whether upgrades are warranted. This technique uses a variety of KPIs and tools to assess the likely type of network utilisation, allowing companies to make more informed decisions about investment required in cell-towers while maintaining the maximal good CRUX score for considerably lower overall investment.

According to the study, new techniques that are able to identify traffic types across the network are able to offer considerable improvement to bitrate supply allocation. The insight allows companies to better allocate resources while reducing the need to invest in upgrades. The better the understanding of network, the better the results from QOI. Overall, the firm contends that ‘as much as a 30% improvement in customer usage experiences for the same level of investment by changing 20% of planned projects’ can be achieved – while in total, 10% shaved of CAPEX investment.Network operators gaining edgeSpeaking about the findings of the report, Jeff Melton, a Partner with Bain's Customer Strategy & Marketing Practice, said, “We believe that telcos need to shift their current focus on network performance more towards the customer’s overall experience, which can give operators an edge while stretching existing investments further. This approach begins with rethinking network performance metrics to improve outcomes that customers value most.”