OTT: Impact in mobile networks

1 © Nokia Siemens Networks

OTT: Impact in mobile networksAFCEA. Curso de Desarrollo ProfesionalNuevas Plataformas de Comunicaciones AudiovisualesAugust 2012


Globally, streaming video is already the main data generator in mobile networks

Sources: Allot, Cisco, Search Engine Watch, 2011

YouTube usage is now 52% of global mobile streaming video

Cisco: Streaming video will be 66% of mobile data traffic by 2015

93% growth rate

33% growth rate Web

browsing 26%

Videostreaming 37%

Filesharing 30%

VoIP & IM 4%Other apps 3%

45%40%35%30%25%20%15%10%

5%0%

Q2/09 Q4/10Q3/10Q3/09 Q4/09 Q1/10 Q2/10

Web browsingVideo streaming

File sharingVoIP &IM

Mobile data usage trends broken down by top applications, Q2/09-Q4/10

You Tube currently delivers 100 million mobile videos per day


Video makes up the major share of fixed internet traffic in North America

• Unlimited TV and movies streamed over Internet• $7.99 / month

• Netflix has 24.8 million subs (Q1/11), more than every other US cable and satellite provider; 21.8 million are streaming customers

A new and significant shift from short-form online video to long-form online video

Top applications by downstream bytes share

Source: Sandvine (North America; Fixed Access; Peak Period – March 2011)

Netflix30%

HTTP18%

YouTube11%

BitTorrent10%

Flash video5%

iTunes 3%RTMP 3%

Facebook 3%SSL 3%Hulu 1%

Other 15%

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.


OTT video services will have a different effect on markets that do not already have strong fixed and pay TV penetration

“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

Sources: Yankee Group and Fierce Telecom, 2011

September 2011: Netflix launchesin nine South American countriesCost in Brazil: US$9.35/monthHours 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.”

In countries with low fixed broadband penetration, mobile broadband becomes the primary access method


OTT video goes mobile

Source: www.multichannel.com, May 2011

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

• Launched Q1 2011• Streaming for

Netflix subscribers on Apple and Android

• Launched Q2 2011• Streaming for HBO

subscribers on Apple and Android

Verizon Wireless, May 2011: Begins offering Netflix pre-loaded on LTE handsets

http://www.multichannel.com/


A major share of operator data connectivity revenue generated by online video traffic

In advanced markets, 50% of total revenue comes from non-messaging data, 37% of which today is video streaming

50%

31.5%

18.5%

Indicative operator revenue distribution in advanced markets

Browsing, file sharing, etc.Video streamingVoice and messaging

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.


Netflix viewers consumed an average of almost 10 hours of video per month in April 2011, or roughly one movie per week

Unlike peer-to-peer streaming, Netflix traffic is steady and predictable

450

500

550

600US online video: Average monthly minutes watched per viewer

Sources: Blog.streamingmedia.com, Business Insider, 2011.

April 2011

Google/YouTube


The bitrate for the required video quality depends on the screen size

150 kbps 480*224

240 kbps 480*224

440 kbps 480*224

640 kbps 640*360

1240 kbps 640*360

1840 kbps 960*540

2540 kbps 1280*720

4540 kbps 1280*720

Smartphone

Good

High

Medium

Low

Tablet TV screen

Low

Medium

High

Good

High

Good

Low

Medium

iPhone screen capture

4540kbps 1280*720

iPad screen capture

• 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.


Ten hours of good-quality video streaming generates manageble amounts of traffic – especially when the rate plan is right

Smartphones are less likely to be used for full-length movies, but are used heavily for short videos.

Large screens are better for longer periods of entertainment. Video traffic volumes may have a mismatch with MBB subscription volume quota

A too-low ceiling on the top available rate plan may discourage video usage that could be generating revenue

5 GB

10 GB

15 GB

20 GB

25 GB

0

Verizon Wireless’s top data package offers 10 GB per month, with an overage charge after

Telia Sweden’s top LTE data package offers 30 GB per month, with an overage charge or throttling after


Examples of macro site capacity limitsTotal subsper site

Smartphones(mnthly traffic, share)

PCs & Tablets(mnthly traffic, share)

Simultaneous busy hour video streams

(7% streaming subs,

10 hours a month)Case 1 6000 400 MB

20%5 GB10%

-

Case 2 7000 1 GB80%

15 GB 20%

-

Case 3 7000 400 MB80%

5 GB20%

-

Case 4 7000 470 MB80%

5,9 GB20%

-

Case 5 7000 400 MB80%

5 GB20%

2% active117 smartphones +

30 PCs/tabletsCase 6 7000 400 MB

80%5 GB20%

7% active (all)392 smartphones +

98 PCs/tablets

Equal amount of monthly data, different busy hour distribution

Netflix North American penetration: 7%

Site throughput, Mbps


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


The great unknown: What usage pattern will mobile long-form video watching follow?

Time of day

Traffic

Growth

Peak

Time of day

Traffic

Growth

Peak


Dealing with sudden network peaks caused by OTT video:Friday and Saturday nights, 20:00 – 24:00 in residential areas

Sudden peaks

User ContentCoreRadio

25-80% overcapacity 30-50% overcapacity

Different times, various locations

Time12am 12am

City

Suburbs

Residential


Macro RAN

Mobile broadband evolution for online video

Core site

NodeBeNodeB

SGSNMME

GGSNS/PGW

switch

CacheOptimize

RNC

Own OTT video & TV

Supportsystems

DM OSS SDM Charging PCS

Small CellsWiFiFemtoPico

Micro

OTT video & TV

CDN

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

Evolution options:•Micro, Pico•Active antennas•LTE-Advanced, Long Term HSPA Evolution•Baseband pooling


More strategic options for addressing online video:Moving up the value chain with own offers and partnerships

2. 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

4. 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

3. 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

Further business opportunities with OTT video (utilizing the network capability built in step one)

The Must-Do:1.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


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

Thank you

Documents

OTT: Impact in mobile networks