Like any new Apple product, the launch of the iPad was an exciting one and created a real buzz across the country, both among users and mobile network operators. Over the last few years, Apple has taken a fresh look at portable data and caused a mobile revolution. The iPad now looks likely to do the same as the iPod and iPhone, with 3m units sold in the first 80 days.

Due to this demand, leading operators have announced new pay-per-day and pay-as-you-go iPad price plans for wi-fi and 3G data, featuring monthly ‘capped’ data download levels, with the option of further instant data top-ups if required. Orange, for instance, will offer a tariff which will allow users to simply pay for what they use, at a cost of 5p per MB, up to 800MB. These offerings demonstrate how competitive operators need to be to lure customers away from one another.

For operators, offering capped limits, with the option to pay extra once the capped limit is exceeded, is an interesting insight into their long-term strategy. Fundamentally, it’s all about how they turn their main asset – data – from near-commodity, to profit centre.

Next-generation networking
LTE and 4G networks will allow data to be downloaded at far greater speeds than today, and devices like the iPad will drive ever greater consumption. LTE and 4G themselves are necessary steps to maintain and improve service, while increasing the strain on the operator’s infrastructure, and also increasing the challenges around delivering good Quality of Service. The iPhone has been the most visible driver of vastly increased mobile internet traffic in recent years, placing great strain on existing network infrastructure and this is only likely to get worse now the iPad is with us, with its competitors to follow.

For operators to consistently deliver a rich mobile internet experience and generate revenue growth, their customers must be able to get the content and services they want. Conversely, operators can lose revenue opportunities from customers’ inability to buy additional content and services during downtime. There is ultimately the risk of churn, which could lead to a dip in both new and loyal users, resulting in millions of pounds worth of lost revenues.

What operators need is the ability to deliver more sophisticated, targeted data applications that increase their revenue streams. To do this, they need to intelligently manage both the volume of data traffic, and the use of their applications, to maximise the efficiency and productivity of their networks. Only by managing network resources to allow the delivery of increasingly feature-rich content can operators give customers what they want. 

Instead of using the standard SIM card that GSM phones use, the iPad uses a 50 per cent smaller micro SIM format. This means that users can’t tether it to an iPhone to use the 3G connection, even though it runs off the same network. This has been done for a number of reasons: to make operators additional money through new data contracts, and to track the data being used by certain devices. As with many other innovations, however, there are already methods being discussed in public forums and sites to customise standard SIMs for use with the iPad.

New payment era
What seems like a generous standard capped data offering today, will seem inadequate tomorrow, as the use of video streaming and other rich media platforms increases rapidly. Operators are preparing us for a new payment era, where Quality of Service remains key and where users are segregated, serviced and charged, based on the amount and type of data consumed.

Similar to the fixed-line broadband market, users will need to look at whether they are likely to stream films or music from mobile networks, or whether they spend more time simply accessing news sites, and choosing the wrong tariff could prove costly. Current payment plans are offered at a standard rate. As devices develop and applications become richer, however, payment plans will be offered to suit user types and needs. This should, over time, help to structure mobile networks usage, develop the mobile industry and deliver a superior, more reliable mobile experience.  

Owen Cole is technical director, EMEA at F5 Networks