MVPN Business Case

MVPN Business Case

Mobile VPN is a data service that can be provided within any system or network supporting authenticated (most often wireless) access to a data network. Let's look at MVPN business case as a combination of VPN and wireless data business cases and analyze its value for operators, in the form of revenue and marketing potentials, and customers, as a vehicle for delivery of new services and functionality. Based on our findings, we will look at MVPN market from both service provider and customer perspectives and evaluate the MVPN benefits and values proposition for specific customer and provider segments.

Moving to Mobile VPN

The Internet, now accessible from almost anyplace where telephone lines, cellular service, or satellite services are available, has fundamentally changed the way we communicate and access information and services. The Internet is rapidly becoming the medium of choice for business communications. However, it is a public shared network, whereas business communications requires private secure facilities. That means if the Internet is to be used for private communications, the user information transported over it must be somehow secured.

Suites of networking and security technologies were devised in response to this requirement and quickly became popular methods for conducting private communications over the Internet or any other shared IP networking medium. These were known as IP VPN technologies. In the course of wireless networks' development, the requirement of mobility became more and more stringent in the provisioning of IP VPN services. This fostered research, standards efforts, and the development of MVPN technologies in the industry. Today, operators are preparing business plans and architectures to support a variety of MVPN offerings to serve the needs of their business and institutional customers.

Wireless Communications with MVPN

For wireless operators deploying latest-generation cellular systems based on packet-switched data such as GPRS and CDMA2000, and especially those targeting business customers for significant portion of their revenue stream, the importance of services based on MVPN technologies is hard to underestimate. For operators, MVPN is not only one of the required technologies for business customers' private network access but also a foundation for other services requiring interaction with private networks such as m-commerce, virtual presence and gaming applications, and multimedia applications (which includes Voice over IP-based services).

The benefits of deploying Mobile VPNs for businesses and institutions include:

  • Uninterrupted, media and location-independent connectivity to private networks

  • Seamless private network access mobility

  • Connectivity to a particular Internet service provider (ISP) or application service provider (ASP)

  • Mobile remote access outsourcing possibilities

  • Secure m-commerce enabler

  • Constant remote-workers reachability

  • Higher cost-effectiveness

As a result, businesses, which already had a positive experience with wireline VPN services, are now looking to wireless operators for extending these services into wireless environments. In our view, during the next few years as the latest generations of cellular systems and other wireless technologies take off, an enormous market opportunity awaits wireless carriers who can meet demands for services requiring private network access.

MVPN as a Differentiation Tool

Mobile VPN is a powerful differentiation tool especially for service providers dedicating a significant portion of their offerings to serving business customers. But why is differentiation so important? During the last few decades, we witnessed the cellular communications gradually rise from luxury item and status symbol to necessary tool and then abruptly become a commodity. Commoditization is undesirable for any industry. But it is also a natural part of almost any product life cycle and is no stranger to the wireless telecommunications. As Internet-based Web services boomed in recent years, ubiquitous and fast Internet access became an immediate goal of the wireless data industry as well. However, wireless data services consisting mainly of Internet access are considered as generic as today's cellular voice services, and face price-based competition that is already hurting wireless voice revenues. Subscribers will not have enough incentive to stay with a particular carrier for reasons other than pricing. The situation is further complicated by the ease of switching from one carrier to another, known by operators as customer churn, which has plagued the wireless industry since its inception.

MVPN seems to be one of the likely answers to these problems. Since MVPN technology is highly customizable and can be implemented in different flavors to accommodate different customers needs, the MVPN service offerings can also be packaged and marketed differently by different wireless operators. That means they would be able to offer more "sticky" or unique services, and therefore prevent price-driven customer churn. This is especially true for large institutions and enterprises expected to make unique MVPN services from different wireless operators an integral part of their IT infrastructures.