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Monetising IoT demands a smart revenue management strategy
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Monetising IoT demands a smart revenue management strategy

Posted by Zenobia HegdeMarch 22, 2016

Transforming itself into a major value-added player that is a key part of the IoT value chain is not necessarily straightforward for a CSP, but it is expected to be a key part of many CSPs’ vision.

Since volume-based plans will commoditise, CSPs (to ensure future revenue growth) will need to embrace and introduce value-based plans, which in turn means that their underlying platforms possess the ability to identify the value inherent in the transaction, and then act appropriately. In order to shape vision into reality, CSPs need to adopt a “service enabler” strategy, says Ari Banerjee, senior director Strategy, Netcracker.

The role of IoT asset and data management becomes a critical piece of CSP differentiation and value delivery in the context of CSPs “service enabler” strategy. Most IoT platforms have a very myopic view of the IoT world and are only aware of SIMs and how to activate, provision and manage SIMs.

These platforms possess limited functionality and do not have a broader view of how SIM-enabled assets are part of an asset group and the type of applications the asset group is running. Operators are therefore typically blind to all the assets that communicate via a gateway, unaware of the applications that are running on those assets, and incapable of understanding and acting on the data flowing through the network.

This makes value-based charging difficult, if not impossible, restricting CSPs’ role to being a connectivity provider. With asset and data management handled elsewhere, it is hard to “connect the dots” for smart monetisation. Alternatively, with asset and transaction information in hand – as provided by an advanced enablement platform that they would offer – CSPs can easily provide sophisticated charging capabilities. CSPs can enable an IoT transaction to be charged on value and not just connectivity parameters.

Only with these abilities can CSPs elevate their position in the IoT value chain. The key to smart monetisation is to identify the intrinsic value of IoT service and charge accordingly. CSPs with access to the underlying application data can help enterprises provide tiered services for different asset types, at different speeds, or with unique classes of service and prioritisation schemes, or for bundling multiple assets associated with a single subscription as other options to grow revenues. Smart CSPs will price different services in different ways.

What CSPs need today is an underlying platform that is able to provide asset management and transactional insight that supports innovative and aggressive business models. Hence the platform needs to be capable of not only securely managing data captured from assets, but also transforming that data into relevant information that can be used to monetise the IoT activity and in other value-added ways.

Such an enablement platform would allow CSPs to become a solution enabler horizontally across verticals – providing economy of scale, increasing the CSP’s role in the IoT value chain and effectively monetising core assets for the disruptive business models of the IoT market. CSPs that deliver on such an approach can successfully differentiate themselves from connectivity-centric CSPs, and also help their high-value customers differentiate themselves.

A future-proof IoT solution is essential for mobile network operators to increase value and monetise any IoT business model – even across verticals. A key ability for an IoT enablement platform is the ability to define rules and intelligence that adds value to the enterprise by turning raw data into information and alarming and triggering the enterprise to take action in various conditions and scenarios.

An IoT enablement platform must include a flexible IoT BSS stack (policy management and enforcement, service delivery, rating and charging, billing, administrative portal, etc.) that is tightly integrated with a purpose-built IoT application middleware (asset management, data management, development kit, integration framework and enterprise self-service portal). This platform would cover everything from asset connectivity to integration into enterprise customers IT ecosystem.

The IoT BSS stack should interoperate and integrate with the CSP’s existing IT ecosystem, of course, while addressing key concerns on financial data exposure, security and privacy issues with any typical off-premises deployments. The IoT application middleware, on the other hand, should integrate with the enterprise customer’s IT ecosystem.

Other critical aspects include:

  1. Bulk SIM management and comprehensive asset management capability: In most cases, IoT assets are SIM cards that are activated at the factory. SIM activations need to be zero-touch and these assets need to be supervised for delivering reliable service with QoE. Routine upgrades, maintenance, fault recovery, etc., also need to be handled.
  2. Integrated customer self-service portals and zero-touch service activation: Ordering specific services at any time whether at home or on the go requires self-service portal applications. This will help enterprises optimise overall customer experience and enabling them to process orders and provision services on the go. Support for multi-channel order management and integrated product catalog becomes extremely critical for supporting advanced revenue optimisation initiatives.
  3. Converged BSS capabilities: Support variety of billing models (retail, wholesale, billing-on-behalf and re-branded); support variety of charging models, with differential pricing based on asset connectivity (always connected vs. sporadically connected), “value per bit” (instead of “pay for MB” tiered pricing), time-of-day, asset or traffic prioritisation, shared data plan and bundles, etc.; support multiple rate plans and product offerings, real-time rating and policy management, support for transaction aggregation and both prepaid and post-paid scenarios; partner management; complex contract management and partner settlements capability.
  4.  Embedded Big Data & Advanced Analytics for real-time decision support
  5. Flexible invoicing capability: Go beyond an aggregate price per asset per month to support distribution of one-off as well as recurring charges to various players. Customised promotion and offer management capability
  6. Flexible roaming module:
  • Creation of permanent roaming agreements and tariff plans with selected partners
  • Support for Billing on behalf, consolidated billing (integration to other billers), integration to partner billers
  • Template-based catalog
  • Fast partner onboarding and product configuration and rollout
  • Partner-dedicated product, services and pricing
  • Volume discounts, activity fees, proration rules, revenue sharing plans, dormancy charges, multi-partner value chain settlement
  • Ability to run campaigns (segmentation, tiers, trial periods, personal usage)
  • Service-specific monetisation models

The author of this blog is Ari Banerjee, senior director Strategy, Netcracker.

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Zenobia Hegde

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