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1 © Nokia Siemens Networks R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G.

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Presentation on theme: "1 © Nokia Siemens Networks R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G."— Presentation transcript:

1 1 © Nokia Siemens Networks R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: OTT: Impact in mobile networks AFCEA. Curso de Desarrollo Profesional Nuevas Plataformas de Comunicaciones Audiovisuales August 2012

2 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 2 © 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% Q2/09Q4/10Q3/10Q3/09Q4/09Q1/10Q2/10 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

3 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 3 © 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.

4 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 4 © 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, its 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

5 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 5 © Nokia Siemens Networks OTT video goes mobile Source: www.multichannel.com, May 2011www.multichannel.com 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

6 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 6 © 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.

7 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 7 © 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

8 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 8 © 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 TabletTV 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.

9 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 9 © 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 5 GB 10 GB 15 GB 20 GB 25 GB 0 Verizon Wirelesss top data package offers 10 GB per month, with an overage charge after Telia Swedens top LTE data package offers 30 GB per month, with an overage charge or throttling after

10 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 10 © 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 16000400 MB 20% 5 GB 10% - Case 270001 GB 80% 15 GB 20% - Case 37000400 MB 80% 5 GB 20% - Case 47000470 MB 80% 5,9 GB 20% - Case 57000400 MB 80% 5 GB 20% 2% active 117 smartphones + 30 PCs/tablets Case 67000400 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

11 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 11 © 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

12 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 12 © 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

13 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 13 © 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 UserContent CoreRadio 25-80% overcapacity30-50% overcapacity Different times, various locations Time12am City Suburbs Residential

14 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 14 © 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 Todays 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

15 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 15 © 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

16 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: 16 © 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

17 R 255 G 204 B 0 R 255 G 130 B 0 R 127 G 16 B 162 R 163 G 166 B 173 R 104 G 113 B 122 R 234 G 234 B 234 R 170 G 15 B 30 R 0 G 0 B 0 R 255 G 255 B 255 Supporting colors: R 60 G 170 B 0 Primary colors: Thank you


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