Openwave chief sees paid priority on mobile networks

Mobile operators could sell guaranteed performance to third-party application providers, he says

Mobile operators could collect detailed information about what's happening on their networks and use it to guarantee network performance for application providers that pay for it, according to Openwave CEO Ken Denman.

Carriers so far haven't controlled their networks as closely as they could, but they will start to tighten up as demand for mobile data services grows, Denman said in an interview on Tuesday. The talk offered a preview of his presentation at the Mobilize conference in San Francisco on Thursday. Multimedia content, especially video, will strain the capacity of all mobile networks. But information about subscriber location, connection strength, device type, application type and other factors can help the operators fine-tune the experience of their subscribers, he said.

Openwave sells software for collecting and using that information. Its customers include Verizon Wireless, Sprint Nextel, Deutsche Telekom and Vodafone. But Denman isn't the first person to predict that carriers will impose more management on their networks and sell better performance to content and application providers. Many back-end systems vendors are utilizing PCRF (Packet Core Routing Function), a standard that defines nine levels of quality of service, four of them guaranteed, on a mobile network. PCRF was introduced as part of the LTE (Long-Term Evolution) standard and has also been extended to 2.5G and 3G infrastructure.

The software Openwave offers goes above and beyond PCRF, but its purpose is the same: to optimize networks to deliver the best possible subscriber experience, he said.

Just as the performance of a given application depends on factors such as the processing power of the device, the strength of the radio signal and the resource requirements of the application, optimizing that performance requires collecting and using information about those elements, Denman said. He expects carriers to take advantage of that information and of software such as Openwave's to make third-party "over the top" services, such as video and social-networking services, work as well as possible. But there may be a business side to that effort as well.

"We're going to see competition in the app and content space drive both players in the ecosystem to actually want to go to operators and say, 'If you can deliver this capability in this way, I'm willing to pay you,'" Denman said. He believes carriers will sell this guaranteed performance to any third party that wants it.

That capability would be a bit of good news for carriers that are watching device makers and application developers draw much of the excitement in the mobile world, he added.

"This could be one of the ways that operators begin to share a portion of the value that's being created around them today, and which they're not sharing in," Denman said.

The new revenue stream could lead carriers away from a reliance on the exclusive deals they have made to differentiate themselves, he believes.

"Getting their share will be more important than trying to keep others from having the same applications or content flowing over their networks, or the same handsets available," Denman said.

The idea of mobile operators charging "over the top" service and content providers for guaranteed quality of service on their networks has raised the ire of some net neutrality advocates, but so far the wireless world has been largely untouched by net neutrality. Whether mobile networks should be governed by such rules is one question the U.S. Federal Communications Commission asked in a call for comments earlier this month. In a net neutrality plan proposed in August, Verizon Communications and Google said net neutrality should not apply to mobile networks.

Carriers also can more effectively use information about the behavior of subscribers, such as browsing habits, to play a bigger role in mobile advertising, Denman said. Other parties, such as Apple and Google, have gotten a head start on carriers in collecting this type of data, he said. For example, through its App Store, Apple has access to a great deal of information about what apps and content are purchased, Denman said.

Collecting data about subscriber activities can be done in a way that protects privacy, and it doesn't necessarily mean tying information to a named person, Denman noted. In fact, most advertisers aren't interested in that kind of data, he said.

"They're not typically looking to go to an individual user. That's a very expensive way to market," Denman said. "The anonymized trends, anonymized segments and subsegments, are where the real value and money is."

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