experts who analyze that data to produce reports customized for different users within the operator’s organization. For example, the marketing team might choose reports about the popularity of certain smartphone applications. The combination of the Tellabs SmartCore 9100 series

and Tellabs Insight Analytics Services gives operators a clear, actionable picture of user behavior and network resource usage, including: • How network usage varies by time of day • The most popular applications • Which users consume the most bandwidth • The most congested backhaul links.

The combined system extracts

intelligence about that content, including the type of application used and, with the user’s permission, who’s using it. Unlike header-only processing, which looks just at IP and TCP header information, content awareness analyzes each packet’s payload. This information enables operators

to define and implement policy- control rules, such as different QoS levels for different traffic types or customer groups. Content awareness also gives operators a powerful new tool for blocking DoS attacks, malware and other hacker traffic that waste bandwidth and degrade the user experience. In fact, operators often initially

“Mobile operators can spend themselves into a hole well before users run out of hunger for capacity.”

deploy content awareness for security and to comply with law-enforcement requirements. But once that feature is installed, they’re better equipped to monetize data traffic and remain profitable. In that sense, content awareness today is like E-911 Phase II a decade ago: Although U.S. mobile operators initially added GPS and other location functionality to meet FCC requirements, those deployments set the stage to offer a wide range of revenue-generating services. Current examples are turn-by-turn navigation, location-based advertising and mobile social networking apps.

Beyond Bandwidth Caps Armed with new, deep insights into their traffic, operators can optimize network performance and create policies that ensure the most fair and efficient use of network assets. They also can identify potential revenue opportunities, such as premium-service delivery of popular applications. One possibility: Users can pay extra for advertising-free streaming-video services.

— Rob Pullen, Tellabs president and CEO

This flexibility is key as operators wean users off of

flat-rate, unlimited-use data plans. These plans no longer make financial sense due to the skyrocketing adoption of smartphones, tablets and other bandwidth-intensive devices. But tiered plans – often 200 Mbps or 2 Gbps per month – aren’t a panacea. One drawback is that many users inevitably will exceed

their data-use limits, experience sticker shock when their bills arrive and possibly defect to another service provider. Another drawback is that operators are still serving as “dumb pipes” and thus are still headed for the end of profitability.

New Business Models An intelligent network enables more effective alternatives in terms of revenue opportunities and market differentiation. These alternatives include the flexibility to quickly develop value- added services that capitalize on ever-changing market conditions. For example, an operator could use content

awareness as the foundation for a two-part pricing model that consists of 1) a set amount of data for a fixed monthly fee plus 2) custom, user-selected services at an incremental cost. Another example is a family plan that enables parents to monitor their children’s phone traffic for inappropriate content, such as access to adult sites. Content awareness also gives operators more

flexibility to shift the cost of service to third parties. For example, an operator could partner with a streaming video provider to offset the cost of that bandwidth-intensive service. When users access that service, the content provider would

pay a fee to help cover the delivery costs. As a result, the operator doesn’t have to limit or block user

access to video services or charge customers extra for using them. That’s a major plus in price-sensitive markets. In the process, this transaction-oriented, double-sided revenue model helps operators maintain and even increase profitability. “Operators need critical intelligence to survive and prosper,”

said Vikram Saksena, Tellabs executive vice president and chief technical officer. “That’s why we’ve introduced a new smart mobile backhaul solution and an improved smart mobile packet core platform.” 

4G: Fourth Generation CapEx: Capital Expenses DoS: Denial of Service

FCC: Federal Communications Commission GPS: Global Positioning System

TELLABS INSIGHT Q2 7

IP: Internet Protocol OpEx: Operating Expenses QoS: Quality of Service

TCP: Transmission Control Protocol