Coping with consumer demand for mobile video

Mobile operators are under increasing pressure to deliver higher volumes of mobile data, as consumer appetite for mobile video and internet grows. Christian Goswami discusses strategies to help mobile operators cope with this demand for mobile video and data, including caching and offline transcoding.

Today, there are approximately 5.3 billion mobile subscribers worldwide, equalling about 77% of the world’s population.

According to the Australian Bureau of Statistics, 2010 saw a huge jump in the number of mobile phone subscribers, from 6.7 million subscribers in June 2010 to 8.2 million subscribers in December 2010, an increase of 21%. More shockingly, the data consumption from mobile within that same time period has jumped by approximately 462%, from 717 terabytes in June 2010 to 4029 terabytes in December 2010. Currently in the country, there are six million more mobile subscribers than its population. By the end of 2011, it is predicted that mobile subscribers in Australia will reach 28 million, a huge jump compared to 2010.

The massive global uptake of mobile in the past 12 months has largely been driven by China and India: by 2014, China is expected to have 1.3 billion subscribers, while India is expected to have 853 million, according to mobiThinking. This rate of growth is mirrored all over Asia, with Asia currently holding steady as the region with the most rapid uptake of mobile devices worldwide. For many users, the mobile phone is their main (if not only) means of communication, information and entertainment, and for most it is also their only means of accessing the mobile web, listening to radio broadcasts and using other online media.

While the growing popularity of mobile in Asia is being carefully watched by businesses throughout the world, an important part of the story is taking place beneath the surface. Just like the proverbial duck swimming serenely on the surface, but paddling wildly down below, telecommunication service providers in Asia are scrambling to put in place the infrastructure necessary to match the overwhelming demand from consumers. As devices become more sophisticated, mobile data consumption is rising at a phenomenal rate, driven by growing demand for social networking sites in the developing markets, and video, music and other mobile media in the more developed markets. Carrier networks are under pressure to deliver higher-quality content and provide a superior user experience. Additionally, since ARPUs in most parts of Asia outside of, eg, Japan and Korea are extremely low, service providers must look to decreasing the costs associated with delivering mobile data to make their bottom line.

According to Cisco’s Visual Network Index, video traffic is projected to be roughly two-thirds of the world’s mobile data by 2014 and already makes up more than half of all mobile traffic worldwide. Service providers are furiously working on strategies for how they can continue feeding the data demand and still deliver quality data services, especially video. Mediating large volumes of data - by an order of magnitude larger than what service providers have been accustomed to dealing with using ‘older’ network architectures - is critical. This represents a substantial challenge, and one that it is imperative to address.

Forward-thinking operators are deploying two strategies to meet this challenge.

Firstly, this increased demand in fact also represents an opportunity for mobile operators and wireless service providers. By optimising the delivery of content and reducing the bandwidth required to deliver mobile media, service providers can decrease and defer operating expenditures, reducing the amount of data travelling over their networks while increasing utilisation of existing network assets. Mobile video, in particular, can benefit from advanced network optimisation, which has been proven to reduce latency while increasing frame rate and resolution.

This isn’t just down to ‘bit compression’. Intelligently caching the most frequently viewed videos closer to the network edge can result in substantially faster download and playback while decreasing the utilisation of backhaul bandwidth in retrieving the same video repeatedly from the server. The most intelligent systems are fed by near real-time usage analytics to ensure optimal performance.

Additionally, service providers may offer users a better viewing experience by performing offline transcoding to deliver higher video quality than what was previously possible under the constraints of real-time transcoding and delivery. Offline transcoding consists of generating different versions of popular videos and delivering them according to preconfigured device profiles and optimisation levels.

Overall this type of optimisation needs to be ‘content aware’, applying higher levels of compression to less interesting imagery from the user perspective; and ‘congestion aware’, only clicking in when and where it is needed.

The second strategy revolves around smart pricing policies. Although demand for mobile media is likely to continue to skyrocket, operator revenue from video is expected to grow at a much slower rate. All-you-can-eat data plans are now acknowledged to provide a poor rate of return for service providers and are being replaced in most markets worldwide. Service providers are going to have to become experts in usage-based tariffs and pricing plans that satisfy the consumer without overtaxing network capacity or unduly limiting consumers. So price plans that can encapsulate the user’s data habits, including charging per event, for different levels of throughput, different times of day, different locations, etc, into one easy-to-understand personalised package are needed. This ‘value-based pricing’ that focuses on time, content and speed is much easier for users to comprehend than per MB charging and potentially much more marketable and therefore lucrative for operators.

The unfortunate reality is that telecommunications service providers must quickly come up to speed with available and new technology in order to continue offering premium consumer experiences with mobile video. The ever-increasing capacity crunch will plague network operators who do not take the appropriate steps to understand consumer usage of mobile data, and shape supply to match. The industry has been speaking about a ‘data deluge’ for two years now, and we now see evidence of that. But it is in fact nothing when compared to the deluge that is yet to come