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OTT: Impact in mobile networks

OTT: Impact in mobile networks. AFCEA. Curso de Desarrollo Profesional Nuevas Plataformas de Comunicaciones Audiovisuales August 2012. Globally, streaming video is already the main data generator in mobile networks. YouTube usage is now 52% of global mobile streaming video . 45%.

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OTT: Impact in mobile networks

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  1. OTT: Impact in mobile networks AFCEA. Curso de DesarrolloProfesional NuevasPlataformas de ComunicacionesAudiovisualesAugust 2012

  2. Globally, streaming video is already the main data generator in mobile networks • YouTube usage is now 52%of global mobile streaming video 45% 40% Other apps 3% 35% VoIP & IM 4% 30% 33% growth rate 25% Webbrowsing 26% You Tube currently delivers 100 million mobile videos per day 20% 15% Filesharing 30% 10% 5% Videostreaming 37% 0% • Cisco: Streaming video will be 66% of mobile data traffic by 2015 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Web browsing File sharing 93% growth rate Video streaming VoIP &IM Mobile data usage trends broken down by top applications, Q2/09-Q4/10 Sources: Allot, Cisco, Search Engine Watch, 2011

  3. Video makes up the major share of fixed internet traffic in North America • Unlimited TV and movies streamed over Internet • $7.99 / month Top applications by downstream bytes share Other 15% Hulu 1% SSL 3% Netflix30% • Netflix has 24.8 million subs (Q1/11), more than every other US cable and satellite provider; 21.8 million are streaming customers Facebook 3% RTMP 3% iTunes 3% A new and significant shift from short-form online video to long-form online video Flash video5% HTTP18% BitTorrent10% Past history has shown that the main uses of fixed broadband transfer to mobile when the quality, the offering, and the price is right, eg. email, browsing, etc. YouTube11% Source: Sandvine (North America; Fixed Access; Peak Period – March 2011)

  4. OTT video services will have a different effect on markets that do not already have strong fixed and pay TV penetration September 2011: Netflix launches in nine South American countries Cost in Brazil: US$9.35/month Hours streamed in Brazil in first month of availability: 1 million ”In the US and Canada, Netflix has gone through pains to paint itself as a complement to – not a replacement for – existing pay TV providers.” “However, in markets such as Peru and throughout the Caribbean, it’s quite likely that Netflix could be the only pay TV service for a high percentage of households.” -- Yankee Group In countries with low fixed broadband penetration, mobile broadband becomes the primary access method Sources: Yankee Group and Fierce Telecom, 2011

  5. OTT video goes mobile • Launched Q2 2011 • Streaming for HBO subscribers on Apple and Android • Launched Q1 2011 • Streaming for Netflix subscribers on Apple and Android • HBOGO app is downloaded 1 million times in its first week after launch for Apple and Android devices • 1 million = 5% of HBO customer base Verizon Wireless, May 2011: Begins offering Netflix pre-loaded on LTE handsets Source: www.multichannel.com, May 2011

  6. A major share of operator data connectivity revenue generated by online video traffic Indicative operator revenuedistribution in advanced markets • In advanced markets, 50% of total revenue comes from non-messaging data, • 37% of which today is video streaming 31.5% Browsing, file sharing, etc. Video streaming Voice and messaging 50% 18.5% Demand for online video is already generating 37% of global mobile data revenues. As users now look for better quality and longer form video, the better that operators can meet this demand, the greater the revenue potential.

  7. Unlike peer-to-peer streaming, Netflix traffic is steady and predictable US online video: Average monthly minutes watched per viewer 600 550 500 April 2011 Netflix viewers consumed an average of almost 10 hours of video per month in April 2011, or roughly one movie per week 450 Google/YouTube Sources: Blog.streamingmedia.com, Business Insider, 2011.

  8. The bitrate for the required video quality depends on the screen size Resolution Smartphone Tablet TV screen iPad screen capture High 4540 kbps 1280*720 2540 kbps 1280*720 High Good 1840 kbps 960*540 Good 4540kbps 1280*720 Medium 1240 kbps 640*360 Medium 640 kbps 640*360 High Low iPhone screen capture 440 kbps 480*224 Good Low Medium 240 kbps 480*224 Low 150 kbps 480*224 • High quality: Improvements above this level are not noticed by the average user. • Good quality: Target: clear sharp images without major interference. • Medium quality: Softer images, some scene change distortion. OK for short clips. • Low quality: Blurry and lots of distortion in scene changes. Irritating. Screen size

  9. Ten hours of good-quality video streaming generates manageble amounts of traffic – especially when the rate plan is right Telia Sweden’s top LTE data package offers30 GB per month, with an overage charge or throttling after Large screens are better for longer periods of entertainment. Video traffic volumes may have a mismatch with MBB subscription volume quota 25 GB 20 GB 15 GB Verizon Wireless’s top data package offers 10 GB per month, with an overage charge after 10 GB 5 GB Smartphones are less likely to be used for full-length movies, but are used heavily for short videos. 0 A too-low ceiling on the top available rate plan may discourage video usage that could be generating revenue

  10. Examples of macro site capacity limits Site throughput, Mbps Netflix North American penetration: 7% Equal amount of monthly data, different busy hour distribution

  11. Therefore • One 2.5 hour movie at good quality = • ~600 MB on a smartphone and ~1.7 GB on a tablet • On a network with 20 MHz HSPA, viewers can easily watch per month: • 2 movies on a tablet (~3.4GB) • On a network with 20 MHz HSPA and 20 MHz LTE, viewers can easily watch per month: • 4 movies on a tablet (~7GB) • in addition to their other data use, plus • a few tv shows on a smartphone, assuming • an even data distribution throughout the day

  12. The great unknown: What usage pattern will mobile long-form video watching follow? Traffic Traffic Peak Peak Growth Growth Time of day Time of day

  13. Dealing with sudden network peaks caused by OTT video:Friday and Saturday nights, 20:00 – 24:00 in residential areas Different times, various locations Sudden peaks Suburbs City Residential 12am T ime 12am 25-80% overcapacity 30-50% overcapacity User Content Radio Core

  14. Mobile broadbandevolution for online video • Evolution options: • Micro, Pico • Active antennas • LTE-Advanced, Long Term HSPA Evolution • Baseband pooling • Today’s upgrade options: • HSPA+, LTE, high capacity sites such as 6-sector • Scalable packet transport and packet core • Femto and WiFi offloading • Local breakout, caching, video optimization • QoS, policy and charging control Supportsystems MacroRAN NodeBeNodeB OTT video & TV DM OSS SDM Charging PCS Coresite RNC SGSNMME Cache Optimize Small Cells WiFiFemtoPicoMicro GGSNS/PGW switch Own OTT video & TV CDN

  15. More strategic options for addressing online video:Moving up the value chain with own offers and partnerships • The Must-Do: • Optimize the network to deliver online video from all sources • Deliver the video with good or excellent quality • Keep customers happy • Differentiate in the marketplace • Build the basis for further options Further business opportunities with OTT video (utilizing the network capability built in step one) • Offer own online or OTT TV and video services • Introduce your own OTT TV and video service or expand your existing payTV services to OTT, reaching beyond your subscriber base to all customers in the market • Leverage existing content assets to reach a wider audience • Gain new revenues and customers • Partner with OTT video providers • Provide subscribers one place to access multiple OTT services, one subscription, one bill, multiscreen device support, etc • Guaranteed OTT traffic quality as a premium offering • Increase loyalty and revenues • Provide business services to OTT video providers • Sell CDN, QoS and other services enabled by your video delivery-optimized network • Expand your potential market by developing enterprise services • Create an additional • revenue source

  16. Conclusions • Video already generates more than a third of mobile data traffic – and revenues • Long-form online video content is finally positioned to be a success in mobile • Ideal device: Tablet • Ideal network: HSPA + LTE • Ideal business model: Netflix-style all-you-can-eat subscription • First step: Prepare the network to deliver all video with good quality • Increase quality of video experience to attract and retain customers, increase usage • Second step: Decide how you will monetize OTT video • Attract mobile broadband subscribers with tailored packages for online video • Partner with OTT video providers • Sell services to other members of the value chain – caching, CDN services, etc. • Enhance video offerings with mash-ups of other messaging and social networking services • Leverage billing, customer care, and customer data in service creation – OTT providers may not have any of this

  17. Thank you

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