LBO or not, I want to break out...

This article was written by Peter Nas, Senior Solution Architect of F5's Traffix SDC solution 

For more than 10 years, the technology to offer local breakout (commonly known as LBO) exists, allowing the data use by roaming customers to be supported by the visited operator’s network. This is in contrast to the scenario in which data requests are sent back to the roamer’s home network, which of course, costs more. But despite the obvious fact that many people would like to get lower data roaming rates, a wish not limited to Europeans traveling in the EU, sadly it is not offered yet.

I can definitely understand some key arguments why mobile operators are not inclined to offer LBO, particularly when it applies to their subscriber. I also understand (a bit) that visited networks don't want to offer LBO, but let's see if we are about to see a change. After all, roaming has been a significant source of revenue for operators on both sides for some time now.

When I worked at a MNO over 10 years ago, I did some testing myself to see if and how LBO works. At the time, I became very enthusiastic and never expected it would take so long before this technology would be deployed on a large scale. In the early days of GPRS, indeed data roaming rates were also very high.  However in those days, roamers used their mobile phones for data much more infrequently than when in their home network. And if you have been observing the investments that have been made by mobile operators and GRX operators (GPRS roaming operators) to allow good quality data roaming, I can understand that these investments need to be earned back before the business could consider offering LBO.

In the meanwhile, I believe that many things have changed and surveys have shown that customers consider data roaming far too expensive. As a result, roamers typically switch off their data while traveling abroad (some recent figures show 73% of the roamers as silent roamers, meaning while abroad but disabled their device for data roaming).

Now the EU Roaming Regulations, in effect since July 2014, is explicitly mandating EU citizens to have the right to use LBO (when offered by the visited EU network), and VoLTE (Voice over LTE) is expected to be available. Therefore, we are approaching the inflection point during which LBO will be a realistic option for roamers.

If I was an IPX carrier how should I approach LBO?

Today all users’ data is backhauled via IPX carriers to the home network. IPX carriers have various sources of revenues and transporting users’ data is one important source of revenues. Currently, the main advantage to use IPX carriers seems to be the ease of connectivity among MNOs. However, people expect prices for pure transport to decrease making new and differentiating services the way IPX carriers can stay competitive and valuable.

It is simply a matter of time that IPX carriers will offer a wide range and the right destinations of roaming agreements that will bring prices down. So while anticipating that operators are willing to pay less per transported bit... and remaining confident in the escalating trend of high data growth in the future, would I advise MNOs to invest heavily in more transport capacity or try to be innovative by leveraging wide-scale LBO usage?

Let’s look at it this way. Assume an MNO can achieve service differentiation by looking at what opportunities LBO would bring. Well similarly, there are opportunities around LBO for IPX carriers which must be looked at as LBO will reduce revenues from backhauled data.

One interesting aspect of LBO is that the signaling for two additional Diameter interfaces, S9 for policy and Gy for charging, could be exchanged between visited and home networks, and if so, this will be done via an IPX network as per GSMA guidelines (IR.88). There are different views on whether or not using the S9 interface to exchange policy information between the visited PCRF and home PCRF, will be massively used once LBO is offered, but let's assume it will be used. In this case, an IPX carrier can offer various services around Diameter interworking, security and perhaps also screening, overload control, prioritization and potentially adapting policy rules and more.

People who doubt the uptake of using the S9 interface might be more interested if IPX carriers could offer services that help visited networks control which policies can be applied in the home network or in the visited network. The offering around S9 signaling can be the same as what is currently offered for transporting and managing S6a signaling (for authentication and mobility management), but offers security, quality, and many more differentiating features.

Another very interesting Diameter interface is the Gy, related to charging. Once LBO is offered, the visited network will have primary control of charging the visitor (for example to offer various ways how a customer can be charged, like per credit card, voucher, scratch card, loyalty points, other credits from OTT applications, etc.) but there is also interest by the home network to receive charging information.

Again, an IPX carrier can offer various innovative services beyond just transporting Gy charging information between visited network and home network. As we discuss charging information, what comes to mind are the potential of services in the areas of security, priority, firewalling, interworking, overload control, enriching, for example.

If you think about other creative services that a mobile customer like myself would like to have while roaming, there are more services that an IPX carrier is well positioned to offer. For instance, perhaps I’d like to choose the visited network that best fits to my needs (there could be static rules but also dynamic rules). For instance, intelligent steering in roaming could be a service offered by the home network, but perhaps might be offered by an IPX carrier, at least as an outsourcing partner for the various aspects of having a new Diameter based solution next to potentially existing SS7 steering. Some other ideas are in the area of OTT apps, such as enabling an IPX carrier to provide value add to the QoE of the apps that I am using while abroad.

Also when looking at LBO, it might be an IPX carrier that hosts other parties who want to offer LBO, or the IPX carrier itself can provide its 'own' LBO services via a local breakout gateway that reduces the costs (in region or on the other side of the world). Also IPX carriers can start to offer MVNE services that enable MVNOs to operate in their specific niche by providing the infrastructure and other services around it.

Much more value-add can be added by IPX carriers, and some will become a commercial success and others maybe not.... but if you don't explore, you'll never know. Let’s discuss some other value-add ideas in more detail in a next post, so stay tuned. 

Published Oct 12, 2014
Version 1.0

Was this article helpful?

1 Comment

  • Susan Hi. I enjoyed very much reading the article, I wanted to ask if you could please explain me why that using LBO would cut MVNO/MNO revenue? Hagai