The Growth of Video and Implications in 5G Consumer and Enterprise Markets

Mobile video is clearly the most popular and demanding application running on both mobile and fixed networks today, and will likely remain so for many years. In fact, many Chief Technology Officers (CTOs) of Mobile Service Providers (MSPs) now claim that they design and run video delivery networks, rather than mobile broadband networks, since, in most cases, video now makes up for more than 70% of the traffic their networks carry. According to Openwave Mobility’s Mobile Video Index (MVI), which uses traffic measurements from live mobile networks, video traffic has grown as much as 60% Year-over-Year (YOY) in developed markets, and almost twice that in developing markets. This increase in video traffic is driven by increasing penetration of video services in the consumer market, where streaming video is continuously penetrating across the world. However, there are also a few trends that will likely increase video traffic exponentially.

Video content is evolving, and content creators are exploring new formats including interactive content, where the user can affect the direction of the show. Netflix has already pioneered a mass market show using this format: the Black Mirror: Bandersnatch movie, which provided the viewer with options throughout the film. This means the content that needed to be cached locally more than doubled, effectively translating a 60-minute movie into 180 minutes of content. This trend will likely continue and challenge mobile and fixed networks more aggressively.

At the same time, MSPs in South Korea have deployed the densest 5G network globally and have launched new types of services:

• KT Corporation has launched its Real 360 service, which allows users to livestream video from a neckband or perform 360 video calls with their friends.
• LG Uplus has launched Augmented Reality and Virtual Reality (AR/VR) services, which are only available to consumers with 5G plans, and created AR/VR service development departments to foster innovation in the business sectors for both services.
• SK Telecom has also signed deals with hospitals, smart cities, and autonomous vehicle vendors to create AR applications.

If these become global trends, then it is natural to assume the growth of video will surely outpace network capacity when these services reach critical mass.

Telecom service providers have had a love-hate relationship with video and content owners. On the positive side, video traffic is what utilizes their networks, drives larger packages, and maintains high-end tariffs. On the other hand, content owners and webscale companies (notably Google, Facebook, and Netflix) have encrypted their video content and rendered previous video optimization engines obsolete. This has made video traffic completely opaque to service providers, which surely can’t tamper with or optimize encrypted traffic as some streams may be business applications—e.g., Virtual Private Networks (VPNs). This has left telecom service providers with a rapidly increasing traffic type and a limited toolkit to manage it.

Optimization vendors such as Openwave Mobility, Flash Networks, and Vantrix now offer software that can optimize encrypted video streams, which are usually coupled with Transmission Control Protocol (TCP) optimization software. These software tools can mitigate capacity bottlenecks that Adaptive Bit Rate (ABR) coding introduces. ABR increases code rate according to the channel, potentially leading to one user watching ultra-high definition video congesting a whole cell. Nevertheless, these vendors will have to come up with new solutions and technologies to manage new types of content, including low latency and reliable video streams that are associated with AR/VR and critical applications. The existence of these vendors, and the advanced nature of their products, indicate that video can still be managed, however, and that telecom operators may become much more than connectivity enablers. In fact, several fixed/mobile network operators have realized the importance of content and have either acquired media businesses or started their own. Although the success of these ventures is not guaranteed, one thing is certain: video will only grow with 5G and future networks.