[Strategy Analytics]: How Operators Could Succeed in Content Distribution?

A new report by Nitesh Patel [pictured], Director, Wireless Media Strategies, Strategy Analytics identifies "strong ambition and alignment with operator assets, as two fundamental requirements for operators to successfully define their position in the evolving digital content distribution landscape. Additionally, evidence from successful operator initiatives, particularly those from Japan and Korea, indicates that targeting consumer appetite for local or regional content, and the acquisition of exclusive rights to compelling content both as significant for success.

AT&T’s acquisition of DirecTV, Bharti Airtel’s launch of music and video streaming services, Singtel’s video-on-demand service HOOQ, and Verizon’s launch of Go90 highlights a recent significant shift in operator ambition with respect to digital content distribution, particularly related to video. 

Strong demand for video content, particularly on mobile devices, has prompted mobile operators such as AT&T, Bharti Airtel, T-Mobile USA, Singtel, and Verizon, among others, to seek a more aggressive position in digital video delivery, despite previous failed efforts in content distribution. 

However, T-Mobile USA’s Binge On [see "YouTube vs. T-Mobile: Do Customers Prefer Price over Quality?" - here] signals an alternative enablement approach, leveraging network assets to provide optimization and zero-rated access to video content streamed over its network. Either way, operators must align their content strategy with both their ambition and assets"

See "Strategy Analytics: Strong Ambition and Asset Alignment Fundamental to Operator Success in Content Distribution" - here.

[Strategy Analytics]: "Wi-Fi traffic is growing at more than double the rate of Cellular traffic"

Data from Strategy Analytics’ Telemetry Intelligence Platform shows that "consumer appetite for data (Cellular and Wi-Fi combined) has exploded over threefold between H2 2013 and H1 2015. During the first half of 2015, on average, US Smartphone users consumed 9.7 GB / Month, of which only 1.6 GB / Month or 17% of the total data was generated on Cellular networks .. Wi-Fi traffic is growing at more than double the rate of Cellular traffic across all ethnicities".

Related post - "[ABI]: Wi-Fi Offload Traffic Volume will Exceed All Cellular Traffic" - here. 

The analysis is based on over one million individual application sessions from 3000+ panel members in the US. The results are powered by Strategy Analytics’ state-of- the-art Telemetry Intelligence Platform by leveraging three core components – a best-in-class telemetry application, an opt-in panel, and big data analytics framework to support rich analysis". 

See "Smartphone Data Traffic Explodes in US, Witness over 300% Growth in 2 Years" - here.

[Strategy Analytics]: 3G Service Revenues Decline

A new report by Phil Kendall [pictured], Executive Director, Wireless Operator Strategies, Strategy Analytics finds that:

• Global mobile service revenue growth will accelerate in 2014, though after passing the $1 trillion mark in 2015, will struggle to grow any further
   
• Europe remains a drag on global mobile service revenue growth, with 2014 revenue forecast at 17% below its 2008 peak. The jump in global growth in 2014 is largely down to the slowing rate of decline in Europe
   
• 3G service revenue has begun to decline in 2014 as 4G growth accelerates. 4G LTE connections will account for 9% of global service revenue in 2013 and more than half of the 2018 total

• Despite the healthy 4G LTE contribution, revenue growth prospects are slim for mobile operators this decade. Mobile connectivity revenue will begin to decline in 2019.

See "4G LTE Boosts 2014 Mobile Service Revenue Though Impact Short-lived" - here.

[Strategy Analytics]: OTT Messaging will Reduce SMS Revenues by 20%

A new report by David MacQueen [pictured], Director, Media & Apps, Strategy Analytics  finds that "Global expenditure on operator messaging services, which includes SMS and MMS, declined for the first time in 2013 following its peak in 2012 ..  operator revenue from messaging services fell by almost 4 percent last year to just below $104 Billion. Continued intense competition for subscribers between operators combined with the fast growing popularity of over-the-top instant messaging services like WhatsApp, Line Messenger and Tencent’s WeChat will drive a 20 percent fall in global operator messaging revenue by 2017".

"While RCS/ RCS-e enables mobile operators both to evolve mobile messaging beyond SMS and MMS and keep operators relevant in mobile messaging, it will not offset the current decline in messaging revenue. We forecast that by 2017 there will be just below 180 million users of RCS/ RCS-e based services. However, RCS/ RCS-e messaging will contribute little direct revenue for mobile operators. To offset lower consumer spend levels, carriers should aim to tap opportunities such as mobile marketing, or increase innovation by opening up SMS platforms to businesses and the developer community"

See "Operator Messaging Revenue to Decline 20 percent by 2017" - here.

[Strategy Analytics]: SDN can save MNOs more than $4B CapEx by 2017

   

A new study by Sue Rudd [pictured], Director, Service Provider Analysis, Strategy Analytics (sponsored by Tellabs) finds that "SDN can save mobile operators more than $4 billion in capital expenses by 2017. Savings stem from 5 key SDN applications for mobile backhaul networks [see below]".

The highest % of savings relates to Wi-Fi Offload and video redirect (over $1B). 

"The Tellabs Congestion Control Application, which it demonstrated earlier in 2013 [here], is one example of SDN in action. The application applies SDN to head off bottlenecks and reroute traffic in the backhaul network before users are aware of any problems with their service. For this demonstration, Tellabs’ approach was to add the SDN controller to its existing Tellabs® 8000 Intelligent Network Manager. This means that customers can deploy SDN seamlessly without the need to rebuild the network to achieve the advantages that SDN brings"

See "New Study Reveals: SDN Could Save Operators $4 Billion in Capital Expense by 2017" - here.

[Strategy Analytics]: Smartphone Traffic Forecast, by Application

A new report by David MacQueen [pictured], Executive Director Apps and Media, Strategy Analytics predicts a ".. strong growth in data traffic to mobile phones for the coming 5 years. This presents network challenges for carriers to ensure end user satisfaction with data-hungry smartphones .. Data traffic has been almost doubling annually as smartphone penetration has increased and attractive, compelling media services have launched".

See "Handset Data Traffic to grow over 300% by 2017 to 21 Exabytes" - here.

[Strategy Analytics]: How MNOs will Reach 300M Joyn Subscribers?

How can MNOs go beyond SMS and voice when competing with OTTs? - just put it in the box and support market features says Strategy Analytics. And pricing is also important.

A new report by Nitesh Patel (pictured), Senior Analyst, "8 Reasons Why Joyn Has A Role In The Future Of Messaging" underlines "how Joyn, an evolution of current mobile operator communication services, will allow mobile operators to remain relevant in mobile messaging, despite its slow roll-out and fierce competition from messaging applications like WhatsApp, Facebook, Blackberry Messenger and Apple's iMessage".

"Strategy Analytics identifies the native integration of Joyn by handset OEMs, consumers' use of multiple communication services, and support for the most popular messaging features as three major reasons Joyn will become part of consumers' mobile communications mix ..  Joyn can be discovered easily, is simple to access and use, supports the most widely used messaging features and is priced comparably against competitive offerings .. A key barrier to Joyns discoverability and availability will have been overcome once Joyn is integrated on handsets .."

 

"To date, just nine operators in four countries have launched Joyn services. Strategy Analytics expects a continued fragmented launch of Joyn by operators over the next 12 months, with the decision to offer Joyn, dependent on deployment plans for LTE and the motivation to fight against OTT players: 

Country	Operator	Launch Date	Device support
Germany	T-Mobile	Mar 2012	Android  2.3+ and iOS apps
S Korea	SK Telecom	Dec 2012	Android 2.3 app iOS app slated early 2013 app
S Korea	KT Freetel	Dec 2012	Android 2.3 app iOS app slated early 2013
S Korea	LG U+	Dec 2012	Android 2.3 iOS slated early 2013
Spain	Orange	Nov 2012	Android v2.2+ and iOS Samsung Galaxy SIII LG Optimus L9, One S HTC, Nokia Lumia 920 Sony Xperia Z
Spain	Movistar	Nov 2012	As Above
Spain	Vodafone	Nov 2012	As Above
USA	MetroPCS	Oct 2012	Android v2.2+
Germany	Vodafone	Aug 2012	Android v2.2+ and iOS

See "8 Reasons Why Joyn Will Approach 300 m Users By 2017" - here.

[Strategy Analytics]: "Operators are beginning to see the huge potential for SDN"

A new report by Sue Rudd (pictured), Director Service Provider Analysis, Strategy Analytics predicts that "virtualization and Software Defined Networking (SDN) will shift mobile operator costs dramatically and accelerate service offerings in the coming decade .. Operators are beginning to see the huge potential for SDN beyond the Data Center - SDNs will extend across technologies, frequencies and protocols to deliver network services everywhere from anywhere. The immediate opportunity is IP routing for virtualized caching and storage followed by shared processing for the Radio Access Network (RAN) and load sharing for mobile backhaul, leading eventually to a virtualized network core".

See "Virtualize to Win - BT, Deutsche Telekom, SingTel, Telstra and Verizon Pioneering Virtualization, Software Defined Networking (SDN) and 'Services at the Edge'" - here.

[Strategy Analytics]: 88M LTE Connections Now, 1.6B by 2017

Yet another forecast regarding the number of LTE connections (see also "[ABI]: 103M LTE-Enabled Devices Now, 785M by 2017" - here see table below for more).

A report by Phil Kendall (pictured), Director of the Wireless Operator Strategies, Strategy Analytics, predicts that ".. Explosive growth in the last quarter helped to make 2012 a breakthrough year for LTE services as connections in the dominant markets of South Korea, the USA and Japan rocketed". 

"There were 88 million connections on LTE networks at the end of 2012, with Strategy Analytics predicting this number will grow to 322 million in 2013 and 1.6 billion in 2017 ..18 percent of the total market generating over 40 percent of service revenues".

The table below shows forecast from a number of analyst for the size of the LTE market:

Analyst	Date Published	LTE Connections 2012	Forecast	Post/ Release
Strategy Analytics	Jan 8, 2013	88M	1.6B/ 2017
ABI Research	Jan 4, 2013	103M	785M/ 2017	Here
Infonetics Research	Dec  5, 2013	51M		Here
Global  Industry  Analysts	Aug 31, 2012		1.46B/ 2018	Here
iSupply	Aug 29, 2012	73.3M	1.2B/ 2016	Here
Pyramid Research	Aug 9, 2012		802M/ 2017	Here
Juniper Research	Nov 8,2011		428M/ 2016	Here
Informa	Nov 8, 2011		613M/ 2016	Here

See "4G LTE Connections to Hit 1.6 Billion in 2017" - here.

[Strategy Analytics]: DPI Market to Reach $2B in 2016

A new report by Susan Welsh de Grimaldo (pictured), director, Mobile Broadband Opportunities, Strategy Analytics predicts the ".. Deep Packet Inspection (DPI) market will top US$ 2 billion in 2016 as DPI expands its role as a core element of cost reduction, improved user experience, and new service delivery in mobile networks .. Better Quality of Experience (QoE) for mobile data services requires better tools in the network, with more granular visibility into traffic flowing over networks. DPI is becoming a strategic weapon for mobile operators as they seek to control and monetize mobile data traffic, and leading vendors are stepping up to meet evolving operator need ".

"..vendors with standalone DPI solutions—which offer benefits in scalability, fine grain detection, rapid rules updates and support for converged networks—are also evolving rapidly. In the world of pure-play DPI"

Read more here: http://www.heraldonline.com/2012/10/31/4377765/strategy-analytics-deep-packet.html#storylink=cpy

Susan's prediction is the same as Infonetics Research forecast for the DPI market size in 2016, published earlier this year and re-confirmed recently (here). My DPI Market Size table was updated accordingly (here).

See "Strategy Analytics: Deep Packet Inspection (DPI) Evolving as Critical Tool for Mobile Data Traffic Monetization" - here (press release) and  "Leaders in DPI/Policy Control Targeting Top Needs of Mobile Operators" - here.

[Strategy Analytics]: "Mobile video optimization is a hot topic for 2012"; Shows Market Landscape

 
[The Broadband Traffic Management Blog 2012 Survey explores the issues discussed in this post. Click here to tell us what you think!]
   
A new report by Susan Welsh de Grimaldo (pictured), Director, Strategy Analytics, concludes that "Mobile video optimization is a hot topic for 2012—with a complicated and shifting landscape of technologies, vendors and operator issues and objective .. Operators need to deploy a set of mobile video optimization solutions that can scale with the growth of video traffic—solutions that can compress videos, reduce their data rates, cache popular videos, or even reschedule or move video delivery to less costly, more available networks [see chart below]". 

".. Alcatel Lucent, Cisco, Ericsson, Huawei, Juniper and NSN all offer a range of optimization covering the data and control planes including strong policy management solutions. ... Specialized solutions vendors typically deliver steering, transrating, transcoding, DPI and caching functionality. Vendors in this category include Bytemobile, F5, Flash Networks, Mobixell, OnMobile, Openwave, Radware, Radisys, Skyfire and Vantrix. Most operate as a proxy or transparent proxy attached to either the Gi Interface of the GGSN or to a Core Router API .. F5 and Radware provide steering solutions that interpret video application requests and steer connections to the best optimization resources..".

"Even in the early stages of the market, many basic video optimization techniques have been widely deployed. In 2011, Deep Packet Inspection (DPI), Policy Control Enforcement Functions (PCEF) at Layers 2 and 3 .. buffer optimization and caching in the mobile core and at the edge of the fixed network, traffic steering and redirection, and multiple TCP proxies to intercept traffic flows have proliferated across networks. Adaptive Bit Rate (ABR) has been implemented by the OTT content providers. Solutions have been focused on ‘pain points’ rather than on system-wide deployments".

See "Executive Summary: Mobile Video Optimization Reports" - here.

Strategy Analytics Expects M&As of Traffic and Policy Management Vendors

   

According to a new report by Strategy Analytics we should expect additional M&As in the policy and traffic management market (following the steps of Cisco/Starent, Amdocs/Bridgewater, Tekelec/Camiant, Ericsson/Telcordia).

The report "shows why the mobile broadband policy and traffic management industry is ripe for partnerships and mergers in a new report from its Mobile Broadband Opportunities (MBO) service"

Sue Rudd (pictured), Director, Service Provider Analysis, noted, “Many of these players already partner with each other -- and with traditional equipment manufacturers – in order to deliver complete solutions for mobile operators. As service providers race to optimize capacity that will satisfy mobile broadband demand, policy management has changed from a passive network tool to a strategic business weapon. To meet operator needs, players may need to team up permanently to integrate and test high performance solutions that can increase capacity by 50 percent at a fraction of the cost of new infrastructure.”

Nevertheless, the creation of single-vendor solutions faces operators with higher dependency in the solution they bought and diminishes the value of using standard interfaces between network elements (such as 3GPP's PCRF-PCRF interfaces).

"We see three key dimensions to consolidation:

• Personalization for Value Added Services
• Applications, Content Video Optimization
• Billing for Real Time Rating and New Pricing Options"

"Key players mentioned in this report include: Allot, Arbor Networks, Bridgewater (now acquired by AMDOCS), Broadhop, Bytemobile, Cisco (former Starent), Openet, Procera, Continuous Computing (now a subsidiary of Radisys), Sandvine, Tekelec (former Camiant) and Volubill"

See "Traffic Management Players about to Merge" -  here.

Survey: Mobile Video Ranked #4 in Consumer Value

    

Tekelec had a webinar last week on a research done by Strategy Analytics titled "Mobile Video: Measuring Consumer Value and Tradeoffs" (available here, registration required) - presented by Randy Fuller (picture), Director of Strategic Marketing, Tekelec, and Chris Ambrosio, Executive Director –Wireless, Strategy Analytics.

The research analyses how mobile operator may maximize their revenues by offering sophisticated service plans, with specific reference to mobile video. Below is one of the introduction slides - showing the relative importance, to consumers, of the different mobile applications.

Download the presentation to see the rest ..!

See also "Allot - Openet: Monetizing and Controlling OTT Applications Use Cases" - here.

Strategy Analytics: 415M Mobile Broadband Modem Devices by 2014

 

Strategy Analytics predicts that "The sales of new devices with integrated mobile broadband connectivity, together with external USB modems, will top 100 million in 2010 .. [and] the installed base will have grown to a staggering 415 million devices by 2014"

A new research paper “Untethering the User: Mobile Broadband Market Outlook on USB Modems, PC Cards & Embedded Cellular Connectivity,” (here), by Andrew Brown, Director for the Strategy Analytics Wireless Enterprise Strategies service, concludes that "Going forward, emerging markets and M2M will represent major opportunities for growth”

See press release - here.

According to the Broadband Forum (here)  and ABI Research (here) there were 430-445M broadband subscribers, globally, in 2009. With the numbers we see here for mobile broadband (which does not include smartphones), we can expect mobile networks capacity to grow to similar size of fixed networks - which will be huge growth, limited by many inherent factors of the mobile networks technology (radio capacity, deployment of fast backhaul links etc). With these numbers and the current state of mobile networks, we must see many innovations in traffic management. 

Related post - "Infonetics Research: Mobile Broadband Card Sales grew 55% in 2009" - here