If you are a service provider, the title of this blog probably has you shaking your head. SPs know only too well that Internet video is costing them money because of the expense of maintaining an infrastructure capable of delivering high-quality online video. The good news is that there is a way to monetize that demanding video traffic.
In 10 to 15 years, Cisco Internet Business Solutions Group (IBSG) estimates that consumers will be watching Internet video as much as 50 percent of their video-watching time. Rather than panicking at the thought of supporting that magnitude of video traffic, SPs should be thinking about how to turn it into profits.
SPs have a strategic advantage over current content delivery network (CDN) providers; traditional CDN services allow content providers to bypass Internet congestion points, but do not allow them to bypass potential congestion points within the SP network that provides Internet access to consumers. CDN services delivered via the SP’s network are delivered by CDN caches placed much closer to the final viewer, reducing the probability of having congestion issues over the delivery path.
“IPv6’s time has come. For a long time considered a satisfactory but too costly technical solution to implement, IPv6 is now an issue that cannot be ignored.” Thus begins the preamble for the V6 World Congress Inaugural Event.
Conference Day One: On Tuesday, February 8th, Mark Townsley, of Cisco opened the meeting with the first keynote presentation: Business Case for IPv6 -- giving an overview of the state of the Internet and the Networking Industry. The central theme of the meeting was how “…as an industry we need to work together to create a network effect, in order to stimulate a virtuous cycle of IPv6 deployment amongst all the players in the industry.”
Erik Kline of Google spoke at the meeting along with distinguished guests. Google, Facebook, Comcast, Akamai and others highlighted what they were working on. Content providers such as YouTube also spoke about their involvement in IPv6. Alexandre Cassen from Free (Iliad Group) made an announcement that they already have more than 490,000 users on IPv6. Free Telecom’s new Freebox gives new subscribers IPv6 by default.
“Free is committed to providing the latest innovations for its customers, including full support today for the IP Next-Generation Network, IPv6. We have chosen the Cisco Series Aggregation Services Routers ASR 1000 router for their support of an integrated high-performance IPv6 Rapid Deployment or 6rd technology, which allows us to supply IPv6 to our users in a remarkably simple and cost-efficient manner.” Maxime Lombardini, chief executive officer, Free (Iliad Group, France)
In case you weren’t able to join us at Mobile World Congress show this week, I wanted to share what we are highlighting at our booth and during my presentation. Thanks to a Cloud delivery model paired with an intelligent end-to-end network, we believe that our SP customers are positioned well to Monetize and Optimize their services over the network from the data center more flexibly while offering richer experiences for their customers versus their OTT competition.
Cisco has the ability to enable a Mobile SP service via the Cloud from multiple angles:
Tested and deployed Cloud-enablement solutions (Hosted Collaboration Solution and Infrastructure as a Service)
Professional design and implementation support from the first-class Cisco Advanced Services group
The industry’s best-of-breed ecosystem partners for orchestration, virtualization, and storage
What follows is the presentation I gave earlier today at Mobile World Cogress during the App Planet Forum Series:
We decided to explore service provider’s expectations for the ongoing development of the mobile Internet. More specifically, their thoughts on monetization and network optimization, especially around bandwidth-intensive applications, like mobile video.
So we commissioned a market research study that was recently performed by Heavy Reading. Based on interviews with over 50 mobile operators from around the world (the interview subjects did not know that this was a Cisco-sponsored survey), here is a summary of what they told us (full report embedded at the end of this post):
Charting a Profitable Growth Strategy
Growing an active, paying, mass market mobile broadband subscriber base is seen as a pre-condition for more sophisticated monetization strategies.
Operators view “Tiered Services” as the most attractive monetization use case. This is especially the case in HSPA+ and LTE networks which now have enough capacity that operators can start segmenting their service offerings.
Other use cases that operators can use to drive data penetration and usage were also favorable viewed, e.g., group data plans and session/day pass or other time-based charging services.
Models that can help meet the dual goals of subscriber growth and generate better yield from existing and higher-end subscribers are most attractive. Maintaining a balance between those two objectives is, of course, preferred.
Mobile data traffic will surge through 2015, growing 26-fold to 75 exabytes per year. A remarkable 66% of that traffic will be video! (Source: Cisco VNI Mobile Data Traffic Forecast, 2010-2015). My family uses an iPad or iPhone to watch Netflix movies and YouTube video clips and I see a lot of smartphone and tablet users doing the same.
This explosion in mobile data and video traffic creates challenges for service providers and mobile operators. First, to reliably provide a user experience that is “more” – more personal, more visual, more social, more collaborative, and more productive. Second, to efficiently manage the sudden increase in data traffic while concurrently expanding the number and kinds of services offered. AND, as if that weren’t enough, to do all this while decreasing costs and increasing revenues.
Definitely not business as usual… in fact, “challenging” may be an understatement.