How do You Set Steering Targets for Maximum Overall Profitability?Posted May 2016
Steering of roaming is a vital tool for roaming managers in mobile networks. It helps them to actively manage their relationships with roaming partners; resulting in lower costs and higher profitability. Roaming managers therefore try to maximise its effectiveness. Some look for 100% “accuracy”. This article examines the trade-offs between “accuracy”, roamer experience and roaming partner relations. Specifically it sets out to answer the question of how to set a steering target to maximise overall profitability.
Steering: The Key Roaming Management Tool
Steering is arguably the most important of the tools available to a roaming manager. It is a tool that allows him to choose where he sends his roamers. Without this ability, there really is very little that he can do to actively manage his relationships with roaming partners. He can’t negotiate for better prices or quality. He can’t avoid temporary problems. So, in today’s market, it is difficult to see how an operator can be fully competitive without steering. The value of steering is also recognised by the GSMA.
There are a variety of methods for steering. The principal types used today are SIM based and SS7 messaging based. Generally SS7 messaging is the dominant method because it offers a direct real time control. However it is often used in conjunction with SIM based steering, especially if very extreme targets are required. By “extreme” I mean targets which require sending nearly 100% of traffic to one particular partner.
There is a widely held belief that an ability to steer up to 100% of traffic is essential. Taken in isolation, this sounds like an obvious, self-evident truth. But is it?
Is 100% a Sensible Target?
It is perfectly possible to achieve a target of sending 100% of traffic to one particular operator. You simply set the steering platform to reject any request to attach to another network. However, by doing this you potentially deny service to your roamers in situations where the network that you have selected either provides no coverage or provides service of only a very poor quality. This means dissatisfaction for your customer and lost revenue for you and your roaming partners.
This is also a problem in situations where intermittent coverage continually disrupts the steering and registration process. To see why this is true, consider what happens when a roamer arrives at the airport and boards the train for the city. He sits down and switches on his phone. As the train goes under bridges and tunnels, the signals received from various partner networks momentarily drop in strength. This causes the registration process to be cancelled and re-started. If the steering platform rejects the first one or two partner networks that request attachment, this can mean a delay of a couple of minutes with a significant chance of a lost signal during the extended registration process. During the whole journey he may therefore not get registered at all. The time sat on the train, where he could be making calls and using data services, is lost.
A further issue can arise when the roamer has actually been connected to the network to which he has been “steered” by the system. When he tries to make a call or use a data service, he may find a major problem with the quality. If he is an experienced traveller, rather than simply giving up, he may attempt to manually attach to another network. If the steering platform stops this from happening, this experienced roamer is essentially denied service. This is a particularly important issue because it tends to disproportionately affect experienced and high spending customers. It also tends to seriously annoy them as well!
Managing Roaming Partners
I would also argue that when setting targets it is sensible to take into account the long term health of relationships with roaming partners. To properly set up a roaming agreement, set up and test connections and to enable billing can cost an operator a significant sum. It may be as much as $30,000 per agreement when all costs are fully considered. There is also a significant on-going cost for periodic testing. If operators have invested this amount in becoming your partner, they will not be very pleased if you don’t send them any traffic. They may even decide to discontinue the relationship.
Therefore, unless you have decided that your roaming relationship should end completely, it makes sense to send some traffic to your non preferred partner. If the price difference is large perhaps you should send traffic to them in situations where your preferred partner either was not available or where an insistence on steering to the preferred partner would have denied service to your subscriber. You get business that you would otherwise have lost, your customers are kept happy and your partner has a reason to keep working with you.
Setting Sensible Targets
The number of situations where connection issues occur will vary from territory to territory. A good steering analysis system should be able to illustrate them clearly. They should give a “maximum” figure for steering targets that should be achievable if you have a statistically based system that handles the exception cases correctly. Such a target should maximise your savings through using the preferred partner without losing any traffic. This should result in maximum overall profit and optimum customer satisfaction. This “maximum target” should then be kept in mind when negotiating with roaming partners.