To Be GUARANTEED

Wireless carriers face several hurdles before they can offer absolute, infallible, unconditional, no excuses, 100% service-level agreements.

Service-level agreements (SLAs) in wireline communications are well-known ways to guarantee voice and data communications quality. For landline voice and data carriers, it's a way to attract high-dollar accounts and keep network quality in check. Here in the wireless world, though, SLAs are in their infancy. Whether it's due to inadequate spectrum or spotty coverage, wireless has yet to reach a Superman level of reliability.

“Service-level agreements are not that common, even with some of the more premium customers, just because of the challenges in ensuring reliability within a wireless mobile network,” said Phil Marshall, Yankee Group (www.yankeegroup.com) senior analyst.

Of course, wireless is growing and has ambitions of wireline displacement. Eventually, SLAs will be critical tools for carriers to keep their networks running efficiently and attract elite enterprise customers. Continual improvement to coverage, capacity and spectrum resources aside, carriers aren't going to be able to benefit from SLAs without enhancing their network-monitoring capabilities.

LEGO Networks

Gary Barton, Agilent senior marketing manager (www.agilent.com) for wireless, said that carriers never talked about SLAs prior to six months ago. With their new interest, carriers have found that their main obstacle is being able to monitor the numerous network elements.

“They are iffy about offering agreements that could be contractual to customers, even huge customers,” Barton said. “The problem is that there are so many different pieces to the network. They are talking more about service-level monitoring.”

Traditionally, Barton added, carriers have monitored different network elements separately. With SLAs, though, it's not enough just to know that there is a problem. Carriers need to be able to pinpoint the problem's origin and fix it before their contractually obligated rebates exponentially increase.

Another shift in network management is its point of view. Barton said that monitoring is increasingly being done with measurements from the handset — better known as the customer.

“(Carriers) are always talking customers,” Barton said. He said carriers don't care if something goes down as long as it doesn't affect the customer's perception of network quality.

In their regard for customers' perceptions, though, carriers can't fall into the trap of just cutting a check when SLA conditions are not met.

“If you have to mail a rebate, you are just being reactive, just trying to keep the customer happy when the customer just wants the service,” said Ken Davis, Sirius (www.sirius-eos.com) COO.

Carriers can offer SLAs, but consumers will need to be more vocal to make carriers adhere to the contracted performance levels. Davis said that most consumers don't report bad service.

“We (consumers) are making calls and switching cells, and we get dropped, and we call back, and we get a network busy, and we can't get through, and then we get ticked off and then, well, we'll call back later,” Davis said.

Carrier SLAs probably will come in the typical silver, gold and platinum quality categories. High-dollar enterprises, however, will be in the driver's seat when it comes to what an SLA will outline.

“When you go to a Sears or a General Motors or a very large account, they are going to tell you that you can take that silver, gold and platinum and stuff it — this is what we want,” Davis said. “Because they are paying X millions for this service, the (carrier's) account manager is going to say they can have whatever they want.”

Those enterprises will make their demands and expect to pay for what they get.

“We're being told that carriers could charge a 20% to 25% premium for very customized SLAs,” Davis said.

Barton said carriers told him they were offering SLAs fully knowing that they could not measure them nor guarantee what the customer was getting. With quarter-percentage premiums, that can't happen. Furthermore, carriers can't offer shady SLAs with paragraphs of fine print.

“You're dealing with physics at the end of the day, and you can't disguise poor performance in the network,” Marshall said.

One example of a wireless SLA is the agreement between Orange (www.orange.co.uk) and the Birmingham police department.

“(Orange) has to guarantee them uptime availability; they can't have X amount of dropped calls; they can't have a network busy,” Davis said. “There's a lot of different parameters involved.”

Typical SLA metrics include coverage, call retainability, dropped-call rates and call quality, Marshall said. Current SLAs, he added, might focus on providing an enterprise coverage in the business' area and to some language pertaining to reliable service.

Parry Snow, Cibernet vice president (www.cibernet.com) of global marketing, believes fixed-wireless carriers will be early adopters of SLAs for their applications that aren't impaired by congestion and mobility.

“In the fixed-wireless environment, you'll see them first, because they are looking at a bypass mechanism to the landline networks, so they are going to have to move to an SLA to be competitive,” he said.

Guaranteeing Data

As wireless data establishes itself as a critical tool for enterprises, SLAs will become more common.

“The intention is to segment the customer base so that you can provide slightly better performance to the premium customers,” Marshall said. “There will be a greater need to allocate your resources. Potentially, SLAs will say that X% of the time you'll get a data rate of so many kilobits per second.”

With data SLAs, it will be crucial for carriers to be able to back up their guarantees, as customers will be blatantly aware of service quality.

“It's like a landline phone where all you are really interested in is a quality call versus a modem connection where the end user becomes conscious of the data rate that they are achieving,” Marshall said.

At some point, it's conceivable to imagine an SLA between a carrier and a wireless ASP.

“It depends on who is at risk there,” Snow said. “If the carrier is branding an ASP service, I think they would want to look for an SLA-type agreement since it's their reputation and their service that's on the line.”

One reason SLAs are not yet more common in wireless is “that many people have a lower level of confidence in the delivery of wireless providers,” according to Hagai Schaffer, Oblicore CTO (www.oblicore.com). Offering SLAs, then, without any catches and with the data to prove their performance, will build confidence and become a strong tool for acquiring enterprise customers.

“There are some enterprise customers that are going to be willing to pay for bandwidth or network availability,” Snow said. “It is a strong marketing pitch to be able to say that you can guarantee 99.9% service availability or that you've got 90% of the population covered or you can provide 56kb/s data rate.”

Back it up and enterprises will listen. That's a guarantee.

Tampa Benchmarks

Drive testing of six networks in the Tampa, FL, area included 1,800 miles driven between Oct. 9 and Oct. 20, 2000. Calls totaled 11,801. The figures represent an average of all Tampa networks.

Next market: Boston

Statistics provided by Agilent Technologies (www.agilent.com/find/benchmarking)