1. Operations and Business Support Systems
  2. Billing and Revenue Management

Ericsson Dynamic Discount Solution

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The Ericsson Dynamic Discount solution/Yield Optimization provides a tool for innovative tariffs and introduces possibilities to optimize the utilization of the network, the revenues generated from the network and subscriber management via acquisition and reduced churn. The solution makes yield-management business models viable, and provides a strong competitive advantage. It is a strategic tool that controls the inventory and sells it to the right customer at the right time for the right price.

Executive summary

Your network has capacity going to waste. You could use it to increase your revenue, grow your subscriber base, use your network more efficiently, relieve peak-traffic congestion, and reduce your capex and opex.

Dynamic Discount Solution/Yield Optimization uses tariffs to shift loads within your network, away from periods of peak congestion to times when your network has unused capacity. But it is not a blunt instrument, like a static, off-peak pricing scheme.

This solution is dynamic: it uses historical and current load and revenue data, and the business rules set according to your business objectives, to determine the optimal discount, quality of service (QoS) or quota for each individual cell, at specific times.

It’s all about seeing the excess capacity in your network as a resource – one that can make you money and help your business. Using our experience, it can help you achieve your business objectives – whether you want to maximize revenue, optimize network utilization or expand your subscriber base. We’ve been doing this for years, helping operators win millions of customers, and the solution won the AfricaCom prize for innovation in 2008.

User experience

The Dynamic Discount solution/Yield Optimization has been designed to ensure a transparent and simple user experience from the very beginning. It is simple for users to register for the service. They receive constant notifications, which clearly state the level of discount, QoS or quota that applies at that time in that cell, enabling subscribers to follow how the tariff goes up or down.

When the subscriber places a call, starts a data session or sends an SMS, a separate notification states clearly exactly which discount, QoS or quota applies.

As well as putting subscribers in control of their spending, these notifications act as advertisements for the dynamic offering, as their users will become aware of the service and the advantages they can get. The discount, QoS or quota level discourages them from connecting at peak times, when tariffs are high, encouraging them to do so when tariffs and traffic are low, and when the network has spare capacity. And after the call, SMS or data session, the reporting system ensures the correct tariff is applied for billing and revenue tracking.

The system’s simplicity helps customers feel comfortable with the service, so they can get the best possible value for money.

Operator benefits

Protect and maximize profit
Dynamic Discounting Solution/Yield Optimization uses a revenue-optimization loop to ensure revenue is maintained and maximized. Business rules are set according to the objectives, whether maximizing subscriber growth or revenue, first one and then the other, or a mix of both.

The tariff can be used as a tool to generate traffic that optimizes revenue. This requires an understanding of how differences in price affect users’ behavior (price sensitivity). The solution determines the tariff at which (discount, QoS or quota) the resulting subscriber usage provides the optimal revenues, and it creates traffic demand suitable for the network while maximizing income.

Increase market share
Our Dynamic Discount Solution/Yield Optimization lets operators introduce innovative business models that win new subscribers and retain existing customers. Targeted tariffs can attract price-sensitive users without eroding prices for – and therefore the profitability of – other users. Subscriber growth comes primarily in two ways: low-income users suddenly get access to affordable telephony services; and the tariffs attract subscribers from competitors’ networks.

Get the most out of network investment
Mobile networks are expensive investments. Ensuring sufficient capacity to handle peak-traffic periods – a regulatory requirement in many markets – unfortunately means that much of that capacity is underutilized during off-peak periods.

Ericsson Dynamic Discounting Solution/Yield Optimization shifts traffic from high-traffic periods to low-load times. As well as using underutilized capacity, this means less peak-period pressure on the network, resulting in better voice quality and call completion, and leading to satisfied and loyal customers. The solution allows the operator to increase traffic by using the network capacity currently available.

Shifting traffic from high-load times also extends the network’s lifetime. Without the constant pressure to expand peak capacity, operators can defer further capital investment until they have received the greatest return from their network. This in turn keeps operational costs down by avoiding the need to operate additional equipment.

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