The capital and operating expenditure demands for enhancing bandwidth, speed and reception quality will only increase. Buffering, trans-rating, trans-sizing, or transcoding are technical solutions but there are also heightened expectations that video streaming should be real-time, with little or no discernible delay or buffering. As smartphone screen resolutions continue to go beyond SD to embrace HD or even UltraHD, end-users will also increase their expectations for decent display resolutions on streaming video.
As mobile operators have migrated the maintenance and management of their networks to managed service providers such as Ericsson, Huawei, Nokia Networks, etc. it is also likely that mobile operators will be keen to migrate the management of mobile video and data traffic to third party vendors. Therefore instead of bespoke, on-site appliances performing the mobile video and data optimization, mobile operators will resort to cloud-based video optimization service providers such as Opera’s Skyfire.
It is noted that Cisco, Citrix, and Opera Software have all made acquisitions as they realize that mobile video and data optimization is a complementary solution to their existing portfolio. It is significant that an end-to-end infrastructure vendor such as Ericsson has acquired the bespoke video optimization vendor, Azuki. Nokia Networks has gone down the partnership route but other vendors may also decide to bring the mobile video optimization intellectual property and skill-set in-house.
Mobile video and data optimization also has the potential to lift operator’s earnings. Quality of service and quality of experience are becoming contributors to end-user decision making as to whether to switch (churn) operators. Given a richer mobile internet experience – such as mobile video calling, on demand video streaming, real-time, interactive gaming, corporate VPN access to virtual desk-tops and cloud-based enterprise applications – end-users, both consumer and corporate, are increasing their dependence on mobile Internet services.
For this global analysis, ABI Research took a conservative, base-line adoption assessment of 1 out of 3 mobile operators opt to implement mobile video & data optimization. ABI Research estimates total revenue boost and TCO savings over a 5 year period to be US$28.7 billion. The top three regions were Asia-Pacific with 32%, North America with 22% and Western Europe with 17%. In terms of potential contributions, ABI Research estimates TCO savings could contribute 32% of the total US$28.7 billion, while Churn Reduction associated Revenues could add US$12.9 billion (45%) and End-user Tariff Plan Upgrade Revenues, US$6.5 billion (23%).