This past year in telecommunications will be remembered for, among other things, the dawn of LTE and industry-wide support for IMS. We also saw the first of many moves away from the “all you can eat” data plan, with many operators globally introducing capped and speed-based tariffs as the battle intensified to take charge of the unstoppable data surge. Looking ahead to 2011, I expect to see several trends that will further redefine the market.

LTE to accelerate tiered services
As LTE continues to move into its first full year, operators will accelerate tiering of services on these networks to better allocate network resources. The reason is that not all data services are equal in terms of usage patterns, traffic and subscriber profiles, so different pricing and speed strategies will be required. For example, a text e-mail sent from a smartphone may use only one or two kilobytes (KB) of data, but downloading a Web page can consume 500 KB or more. Other high-bandwidth services such as video can easily devour megabytes (if not gigabytes) of data, and they do not actually generate any revenue for the operators in a one-size-fits-all environment. Furthermore, a minority of subscribers (only a few percentage points) generate the majority of network traffic. Unfortunately, this small set of users can cause congestion choke points during different times of the day, and the bulk of the expenses incurred by the operators are a direct result of having to allocate enough capacity to meet their data-hungry demands.

By providing tiered services, operators will be able to better match the needs of consumers based on the speeds and quantities of data they desire, leading to a better experience for all subscribers.

Monetizing data services
Instead of merely focusing on how to control costs by managing traffic, operators will shift their focus to revenue creation around data services. I expect to see further experimentation with flexible and more creative data service bundles and offerings. Recently, Vodafone CEO Vittorio Colao suggested that Vodafone is progressing to offer a video tariff that guarantees a connection speed that supports video, and a separate email tariff for subscribers using smaller amounts of data, moving beyond pricing plans by the byte. These types of service offerings will appeal to a wider range of customer segments, increasing retention and service plan personalization.

Personalizing the user experience
Operators will place a higher priority on the subscriber experience by moving beyond bandwidth management to providing users with an experience that is better tuned to the applications and services they desire. Instead of only ensuring the sufficient bandwidth for services, operators will want to leverage other technology components that can enrich the experience. For example, in the case of a sporting events video application, this means that location information can be pulled to “localize” the experience, as well as potentially provide users with targeted sports advertising for retailers close to the subscriber.

A better understanding of the network
As mobile broadband data continues to explode, operators will require a better gauge of how traffic is affecting network performance and the customer’s quality of experience. Performance management in terms of monitoring, reporting and analytics for data services will become increasingly important in 2011. Operators will want to better understand how to adjust their networks in real time and provide more data to subscribers to increase transparency of services. Increased sensitivities around net neutrality might also play a critical role in the importance of transparency, depending on the language of a potential ruling.

Net neutrality rules may have lost its sting
The FCC has finally come out with a ruling on net neutrality. In many respects, this is good news for service providers, as it finally provides some guidelines and clarity on what may or may not be acceptable practices. In the past, a lack of guidelines was problematic, hampered progress in many areas, and caused confusion. The good news: It seems the FCC understands that the extreme rhetoric of the past ultimately does not make sense and is not good for the public. Some of the past positions were pushing for regulations which would have ultimately resulted in the operators not being able to manage their networks and associated costs – the net result being poorer quality service and higher costs for consumers.

The current set of regulations enables operators to continue to manage their network costs, provide more choices of services (e.g. paying for the services they want), and leverage their investment in the IP network to deliver applications such as voice, video and new innovative services with high quality and lower cost. However, the devil is in the details, and it is extremely difficult – if not impossible – to cover all aspects of the regulations such that all confusion is eliminated with no room for interpretation.

Probably the most sensitive aspect of the regulations is how operators will deal with third-party application or content providers that will demand more from the access networks, without the ability for the operators to truly monetize the onslaught of traffic. FCC Chairman Julius Genachowski “discourages” operators from doing business with third-party content and application providers where money is exchanged, for fear this will disadvantage the smaller players who may have limited clout with operators. Such concerns may become issues in the future, but on the flip side, such limitations will likely stifle new business models from arising, which in the end will hurt the consumer, as subscribers will have to pay for everything directly.

Issues are cropping up – like the dispute between Comcast and Level 3 with regards to Netflix traffic. As more bandwidth is consumed and needed to transport the bits for new high-bandwidth services, who will foot the bill necessary for the significant capacity expansions required? And what does this mean for consumers in terms of their quality of experience, and what they pay? For now, the restrictions are on the fixed broadband network. The FCC has recognized the ballgame is different in the mobile space, as spectrum is limited and resource issues are acute. This should give more flexibility for mobile operators to innovate and grow revenues while containing costs.

This, of course, is just a sample of the market changes that will continue to bring innovation and advanced services to subscribers. Individuals continue to gain more personalization and control over their mobile experiences, and that fundamental will keep driving technological advances next year and beyond.

Susie Kim Riley is chief marketing officer of Tekelec. She joined the company from Tekelec’s May 2010 acquisition of Camiant, where she was founder and chief technology officer.