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International Issue: August 2005
Cover Story
The Mobile SLA Puzzle
Are SLAs on mobile data performance key to wooing the enterprise customer?
by Ken Wieland
Asking questions about emerging industry trends is a lot easier than coming up with convincing answers. The world of mobile is no exception, particularly when it comes to SLAs (service level agreements) for the enterprise customer.
What type of SLAs, for example, will mobile operators offer on data performance? Do enterprises really expect such SLAs anyway, or do they have other priorities? Will mobile SLAs, due to the inherently unpredictable nature of the wireless network, be forever restricted to customer care issues (such as handset replacement in an agreed time frame in the event of loss or theft)?
As with any contentious subject, answers to these questions vary according to who you speak to.
“Due to enterprises’ growing reliance on wireless data services, there has been a change in their mindset,” says Kieran Moynihan, CTO of Vallent. “They are putting more pressure on their service providers to commit to minimum standards of network performance on such things as accessibility, retainability [connections maintained], latency, throughput and MTTR [mean time to repair].”
Bearing in mind that Vallent provides software that is designed to help mobile operators collate network performance information from different elements of the network — its service quality management (SQM) system — which, in turn, feeds into its SLA system (alarms are triggered if SLAs are in danger of not being met) then you can see where Moynihan is coming from. If enterprises are demanding more stringent SLAs on data performance then mobile operators would need to sign up to vendors like Vallent. It’s in Moynihan’s interests to paint a picture of enterprises champing at the bit for ‘full’ wireless SLAs.
But Orange — one mobile operator who was willing talk on this subject — does not share this perception. “I’ve sat in front many CIOs who’ve said they don’t care about network-based [SLAs], “ says Cynthia Gordon, vice president of business marketing at Orange Business Solutions. “Rather than spend time examining agreements and making sure they get paid compensation in the event of a network ‘failure’, what enterprises are more interested in is having a good service across the piece. This includes good customer care and making sure that the network meets their requirements. The network shouldn’t be an issue if we invest in it, as we do, to make sure that it covers those areas where our customers are most likely to be.”
A cynic might argue that it’s in the interests of mobile operators to downplay the level of enterprises’ demand for network-based SLAs. If this became a public battleground for winning and keeping enterprises customers, they would be pushed into investing significantly more on hardware and software. They would also be exposed to greater financial risk in the form of penalty payments.
If, on the other hand, enterprises are demanding network-based SLAs — as Moynihan suggests — then mobile operators will have to bite the bullet on both the extra capex and risk.
“While data still represents perhaps only 15-20 per cent of a mobile operator’s revenue [from the enterprise], what the enterprises are now saying is that if they can’t get satisfactory SLA commitment on data then they will also move their voice business to another service provider,” warns Moynihan. “This is higher margin revenue which operators can’t afford to lose. The stakes on SLAs have been raised.”
Mobile SLAs today
One thing that everyone can agree upon is that it’s still early days for SLAs on mobile data “Apart from Sprint in the US [over its CDMA2000 network] we are seeing precious little on this,” observes Ewan Sutherland, executive director of INTUG (International telecommunications User Group).
In March this year, Sprint announced it was launching nationwide wireless data SLAs for its mobile business customers. These are based on network performance metrics such as dropped data sessions, blocked data sessions and data network availability. Sprint said at the time of the announcement that the reason for making this move was “to erase the artificial barriers between wireless and wireline solutions and encourage greater wireless data usage among business customers”.
It would appear that other mobile operators prefer to remain quiet on their data SLA intentions. “Although most Tier 1 operators have SQM/SLA projects underway, they are not making their SLA intentions public,” confirms Moynihan. “It’s commercially sensitive information. They not only want to lock in their own existing customers but they want to compete with other operators for their customers. They don’t want to show their hand.”
One of Vallent’s customers that is prepared to be named is Cingular Wireless (or AT&T wireless as it was known when it started to deploy Vallent’s SQM/SLA system in February 2003). Moynihan doesn’t reveal whether or not Cingular is using Vallent’s software to help design hard SLAs on data performance but he does talk in general terms about how an SQM/SLA system can improve mobile operators’ customer care levels.
“Customer care is an important part of the SLA equation,” says Moynihan, “and the beauty of an SQM/SLA system is that it gives the customer care people the chance to see what the hell is going on when a customer makes an enquiry. They can access the service management system [which contains metrics on network performance] just like the network operations people. They can intelligently respond to enquiries on such things as lack of network availability and say, for example, whether it’s a network or a handset problem.”
The SQM/SLA system can also be used by mobile operators to give their enterprise customers detailed reports (or ‘granular reporting’ as Moynihan describes it) on how their remote workers are experiencing the network in a particular place and time. Again, this type of reporting could be part of a wider customer care SLA that is not directly related to SLAs on the performance of the network itself.
The mobile SLA focus of Orange (as we might expect from Gordon’s earlier comments) is directed at non-network performance issues. In the Orange Business Solutions service brochure there is reference to ‘service performance indicators’ but these relate to things like handset delivery and replacement times as well as round-the-clock customer support (if required). In the event of mobile phone theft, Orange can also initiate call barring within two hours.
The aim of Orange is to offer these service levels consistently across all its territories in order to appeal to MNC customers; it believes this can be achieved by early next year (it already has this available in eight countries). The next step will be to extend a consistent set of service levels across the footprints of its FreeMove alliance partners (T-Mobile, Telefonica and TIM).
Has Orange ever offered a network performance-related SLA to a business customer? “We’ve done it on an individual enterprise customer basis but it requires heavy [network] investment to deliver on it,” says Thierry Mutschler, director of service and product delivery at Orange Business Solutions. “For one customer in the UK, for example, we offered one free call within two minutes after a call was dropped. But to provide that service you do need to have a very accurate call management system.”
The 3G SLA challenge
And it doesn’t look like things are going to get much easier on the data SLA provisioning front with the arrival of 3G networks.
“CDMA-based networks are a lot more difficult to engineer than [TDM-based] GSM and GPRS networks,” says Joachim Samuelsson, executive vice president at Actix. “With 2G systems, you have the possibility of using only software to fix network capacity problems [through frequency planning] but with CDMA-based networks there are also hardware problems to address, such as the way the antenna on the base station is tilted. In the US there is already awareness about the heavier engineering requirements of CDMA networks but in Europe they are just waking up to these problems.”
Actix plays in what Samuelsson calls the ‘performance engineering’ space. By using its software, mobile operators can improve network performance or at least identify problem areas. But Samuelsson does not go so far as to suggest that SLAs on 3G data performance will be impossible to deliver — it’s just that it’s going to be tough.
“The problem is made worse with ‘cell breathing’ that exists on WCDMA networks [cell size contracts according to the amount of capacity consumed],” he says. “A bandwidth-hungry user could force another user of the network in mid-session.”
There are ways of prioritising calls of particular users, which could be a way to keep 3G enterprise customers happy but — as Samuelsson points out — there is no sure way of knowing how the 3G network is going to behave once it gets more fully loaded with voice, data and video.
There is also, alas, no sure way of knowing how the market for mobile data SLAs is going to pan out.
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