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TDF in LTE: Part I
TDF Development in the Midst of the Data Storm

| June 21, 2013 | Service Provider Infrastructure |
| Analyst: Lynnette Luna, Senior Analyst

LTE has matured at a surprisingly quick pace. The Global mobile Suppliers Association (GSA) latest LTE report indicates 175 networks have been commercially launched in 70 countries, compared with 163 networks in 67 countries reported in April. LTE subscriptions reached 68.33 million at the end of 2012, prompting the GSA to declare that LTE is now “mainstream.”

The rapid deployment of LTE provides networks with greater bandwidth than 3G networks, which has encouraged new business models and fostered aggressive competition from over-the-top (OTT) players such as Facebook, Skype and Netflix. The environment has now turned into the perfect storm: data usage is surging, everyone is innovating on top of LTE and carriers are looking to monetize LTE services beyond access fees as the data speed advantage ushered in by LTE networks is quickly losing its differentiation.

What’s more, as this “storm” gathers, traditional pricing models based on downlink speeds and simple data usage will become increasingly less tenable. While a threat to an operator’s traditional business model, this also creates the opportunity to introduce new pricing models that take advantage of LTE’s network attributes around IP flexibility, data speed and QoS. Think personalized mobile charging models, such as service tiering, OTT application-based pricing, on-demand bandwidth (turbo boost) for applications such as streaming video and the notion of toll-free content access whereby the content provider pays the wireless operator for the data consumed by its subscribers when they view the provider’s content.

However, in order to make creative new pricing schemes possible, increasingly sophisticated network capabilities will be necessary. For example, one key for operators to add value, and thus monetize, OTT traffic depends on the ability to identify the traffic and glean useful information related to subscriber, the application or content in use, and the device in use.

A key enabler of these types of pricing schemes is Traffic Detection Function (TDF). This two-part Advisory Report series discusses TDF development, and the role that it can play in helping operators support new pricing models that can help them combat the well-known conundrum of flattening data revenue against the back drop of dramatically increased data usage. Part I describes the drivers behind TDF development. Part II then goes on to describe the practical implementation requirements for TDF, and the use cases that operators have at their disposal to leverage TDF.

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