Why a subscription to vBNG is more profitable than a license?

July 29, 2022
Why a subscription to vBNG is more profitable than a license?
Subscription payment is beneficial and convenient for both customers and businesses. With subscriptions, users have the opportunity to pay only for the time they use the services and plan their budget. And the business gets a tool for long-term growth and scaling.

Subscription model of consumption is getting more and more popular every year. From Netflix to Adobe, subscription services have changed the way consumers get entertainment, clothing, and software. Services for Internet Service Providers are no exception: virtualization, billing systems, and cloud services are all already available for purchase by subscription.

At some point, the operator realizes there is a necessity for improvement of the quality of communication and additional services need to be implemented. One of the most important advantages of the virtual BNG is the ability to flexibly expand the functionality of the solution. This includes scaling by increasing performance. We previously shared our experience about the scaling capabilities of software BNG in an article on our blog.

vBNG – the software solution for authorizing and terminating subscribers on the network, now is also available by subscription.

It works pretty simple – the operator pays only for the maximum number of subscribers which it serves per month.

This approach is beneficial because the subscription model reduces the initial implementation costs of the solution.

Operator costs are reduced to CAPEX for hardware and OPEX for upgrades, license rental and technical support services.

Here’s an example. On average, each 1000 subscribers generates about 2.5 Gbps of incoming and 0.5 Gbps of outgoing traffic. Is it worth to buy a licence for vBNG and pay for support or is it more profitable to buy a subscription to the solution?

If in this case the operator purchases a full license for the vBNG solution, the cost for it could be:

  • $3000 – one-time purchase licence fee
  • + 12% per year of the licence cost each subsequent year of use ($360).

If you buy a subscription to vBNG with a customer base of 1,000 subscribers, the amount of payment per year will be $ 1200 ($1.2 per subscriber per year or $0.1 per subscriber per month).

Stingray Service Gateway pricing models OPEX vs CAPEX

Comparison of OPEX and CAPEX for purchasing vBNG.
Prices are current at the time of publication of this article.

It turns out that for the first 3 years it is more profitable for the operator to use a subscription, but after 3 and more years it is more reasonable to buy a permanent licence. After this period, costs for subscription and license become comparable. At the same time, it is important to remember that when choosing a subscription payment model, the operator doesn’t need to simultaneously invest a large budget. Therefore, in a situation when the ISP cannot afford high upfront costs, subscription payment mode for the vBNG is a better option.

Also, an important aspect is that the subscription already includes support.

So the operator doesn’t need to additionally monitor whether the support is paid for or not – there is only periodic payments should be made.

In addition, a feature of the subscription model is that the licence can be divided among several devices. This gives the operator an ability to use different options for balancing traffic and not depend on the limitations of a particular BRAS/BNG.

The Stingray SG solution from VAS Experts is a system that has advanced functionality: BNG, NAT, a QoE module for viewing statistics and reports, and DPI for traffic classification and filtering according to the regulator. Thus, this solution allows the ISP to simultaneously increase operational efficiency, provide subscribers with additional functions and comply with legal requirements.

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