OTT: Impact in mobile networks

qualtaghblurtingMobile - Wireless

Dec 12, 2013 (3 years and 6 months ago)

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© Nokia Siemens Networks

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OTT:
Impact

in mobile
networks

AFCEA.
Curso

de
Desarrollo

Profesional

Nuevas

Plataformas

de
Comunicaciones

Audiovisuales

August 2012

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© Nokia Siemens Networks

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%

Video

streaming

37%

File

sharing

30%

VoIP & IM 4%

Other apps 3%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Q2/09

Q4/10

Q3/10

Q3/09

Q4/09

Q1/10

Q2/10

Web browsing

Video streaming

File sharing

VoIP &IM

Mobile data usage trends

broken down by top applications,

Q2/09
-
Q4/10

You Tube currently
delivers
100 million
mobile videos

per day

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© Nokia Siemens Networks

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)

Netflix

30%

HTTP

18%

YouTube

11%

BitTorrent

10%

Flash video

5%

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.

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© Nokia Siemens Networks

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 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.”

In countries with low fixed
broadband penetration,

mobile broadband becomes the
primary access method

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© Nokia Siemens Networks

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

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© Nokia Siemens Networks

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 streaming


Voice 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.

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© Nokia Siemens Networks


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

600

US online video:

Average monthly minutes

watched per viewer

Sources: Blog.streamingmedia.com,

Business Insider, 2011.

April 2011

Google/YouTube



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© Nokia Siemens Networks

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.

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© Nokia Siemens Networks

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

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Verizon Wireless’s
top data package
offers
10 GB

per
month, with an
overage charge after

Telia

Sweden’s top
LTE data package
of
fers

30 GB
per
month, with an
overage charge or
throttling after

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© Nokia Siemens Networks

Examples of macro site capacity limits

Total

subs

per
site

Smart

phones

(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

GB

10%

-

Case 2

7000

1 GB

80%

15

GB

20%

-

Case 3

7000

400 MB

80%

5

GB

20%

-

Case 4

7000

470 MB

80%

5,9 GB

20%

-

Case 5

7000

400 MB

80%

5

GB

20%

2% active

117 smartphones +

30

PCs/tablets

Case 6

7000

400 MB

80%

5

GB

20%

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

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© Nokia Siemens Networks

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


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© Nokia Siemens Networks

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

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© Nokia Siemens Networks

Dealing with sudden network peaks caused by OTT video:

Friday and Saturday nights, 20:00


24:00 in residential areas

Sudden peaks

User

Content

Core

Radio

25
-
80% overcapacity

30
-
50% overcapacity

Different times, various locations

T

ime

12am

12am

City

Suburbs

Residential

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© Nokia Siemens Networks

Macro


RAN

Mobile
broadband

evolution

for
online

video

Core

site

NodeB

eNodeB

SGSN

MME

GGSN

S/PGW

switch

Cache

Optimize

RNC

Own

OTT

video & TV

Support

systems

DM OSS SDM
Charging

PCS

Small
Cells

WiFi

Femto

Pico

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


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© Nokia Siemens Networks

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


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© Nokia Siemens Networks

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

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Thank you