Move to 4G spurs policy management market

The policy management market could hit $471 million in 2010, according to new research from Infonetics.

In its updated 2010 Policy Servers report on market size, share, and forecasts, Infonetics tracks policy management software deployed in 3G broadband, WiMAX, and LTE wireless networks and in fixed line broadband and cable broadband networks. In the report, “policy” is defined as those products which are “PCRF compliant,” meaning the policy controllers performing the policy charging rule function (PCRF) according to 3GPP/2 standards.

There has been a lot of momentum in the North American market, as evidenced by deals between Verizon and Camiant (now Tekelec) or Metro PCS and Cricket with Bridgewater, noted Shira Levine, directing analyst next-gen OSS and policy at Infonetics.

“In the last eight months, we’ve seen a lot of deals and RPFs, as operators move toward 4G and LTE,” said Levine, noting that capacity crunches would no doubt be driving more operators to evaluate their charging and policy capabilities for supporting a broader range of services, as well as more flexibility in pricing and billing (e.g., tiered offerings and services).

No longer the domain of just network “geeks,” policy is now moving up the stack to IT and even marketing, where products and services need to be conceived according to usage and what is actually happening in the network. As a result, Levine believes it’s possible more traditional IT-focused companies, such as Oracle or Amdocs, may do more to get into the potentially lucrative field of policy—most possibly through acquisitions or partnerships. “They may want to move into this realm and there’s certainly no shortage of smaller vendors for them to buy,” she noted.

Additionally, M&A activity, such as that between Camiant and Tekelec, may become more prevalent, according to Levine, who thinks the market will respond to operators’ needs for more robust solutions. “Tier 1s want best of breed and Tier 2s and smaller telcos will want full suites,” notes Levine, who expects all vendors will work toward more innovation for more sophisticated data charging and usage-based decision making capabilities based on real-time analysis of information about users, networks and services.

Indeed, the “leaders” like Bridgewater, Tekelec/Camiant, Openet, Nokia Siemens Networks and Ericsson have been gaining traction, as have smaller policy players like Volubill or Comverse. As Connected Planet reported not long ago, there already seems to be some changes taking place, with “unified” solutions capable of combining real-time charging and policy are more widely discussed.

Regardless of how the competitive landscape shakes out, the fact remains that the triumvirate of charging, policy management and policy enforcement will become more crucial for enforcing policies according to real-time subscriber behaviors, which is what operators need to prioritize traffic during busy- or peak-hour times of usage, as well as to tailor the user experience according to customers’ potential profitability.