Iain Gillott dives into the importance of mobile video services to the need for 5G services
Last May, I wrote an article about over-the-top mobile video becoming the next battleground between the major mobile operators. Not wanting to toot our own horn too loudly, but it has to be said this was an accurate prediction. Since then, Verizon Wireless launched its Go90 mobile video service (and steadily added content to the service, including the NBA), T-Mobile US has launched “Binge On” and AT&T recently announced plans to offer DirecTV content on an OTT basis beginning later this year. This latter announcement is important for me personally as it will allow me to drop my cable-TV package (very little of which we watch) while keeping the important home broadband connection.
IGR recently published its global mobile bandwidth forecast for the next five years (you guessed – demand rises significantly). When preparing the new forecast we had a lot of discussions about the increasing use of mobile video. In short, video drives much of the demand for mobile bandwidth. And it is easy to see why: aside from the obvious Netflix, Amazon Prime Video and Hulu, just about every news webpage features a video clip. Put all of these clips together with streaming “House of Cards” and you have a significant impact on the mobile networks.
Of course, since last May, the mobile operators have reacted, as we have already discussed. In addition to the new services, changes are also being made to the way mobile networks are architected, specifically by moving video content closer to the edge of the mobile network. That means video is cached closer to the cell site (or even at a large cell site) to improve the delivery time to the end user device and reduce the transport costs for the operator. Just the other day we heard from a vendor customer who said one of the major mobile operators was requesting more space in the vendor’s data centers. This space appears to be for more than baseband units to support remote radio heads and is related to the increasing demand for video. Ergo, put video servers closer to the edge of the network.
Looking at how binge viewing has changed video delivery, it is hard to imagine the consumer is going to return to the old days of “watch-it-when-I-say” scheduled programming. Can you imagine watching “House of Cards” one episode per week? Ugh! Even the major networks now have on-demand video delivery for their programs, usually a day or so after broadcast. How long will it be before one of the networks releases an entire season of content before it is broadcast?
For “5G,” mobile video is critical to the business case. We are currently building a model for 5G economics – basically, where will the revenue come from? In addition to the usual “Internet of Things” and broadband, mobile video plays a huge part. IMT-2020 networks will deliver far more bandwidth and support higher data speeds, which of course will result in more video. Plans for 4K video is a possibility, but the reality of this will likely depend on the size of the screen on the device. Does it really make sense to send 4K video to a small tablet or smartphone?
IMT-2020 will be deployed around 2020 or 2021 (if the current standards schedule holds), just four years from now. By then it is likely all video programming will be on-demand and follow the binge format. Everything will be available instantaneously across a range of networks and on the device the consumer chooses. Wireless and mobile networks therefore become the de facto mobile video delivery mechanism, not an adjunct or optional method. This includes Wi-Fi in the home, office and public spaces.
For mobile operators, the critical time to plan and execute on this mobile video-centric vision is now. Wireless and mobile networks are hard to build and take time. Aside from the planning, cell site locations have to be procured, fiber is needed to provide front/backhaul, spectrum has to be acquired, and obviously the networks have to be built and tested. For this reason, mobile operators plan years in advance and this is one of the reasons you see announcements of 5G testing years before commercial deployment (there are marketing reasons for this as well). The current mobile video services offered by Verizon Wireless, T-Mobile US and soon AT&T will form the basis of IMT-2020 video services; they are an important stepping stone to what is to come. Note for example AT&T is building a new video delivery platform that will be network agnostic and will support U-verse, satellite, LTE/IMT-2020 and third-party broadband.
The time to start work on a 5G/IMT-2020 strategy is therefore now. You only have 48 months to plan and execute!
Iain Gillott, founder and president of iGR, is an acknowledged wireless and mobile industry authority and an accomplished presenter. Gillott has been involved in the wireless industry, as both a vendor and analyst, for more than 20 years. The company was founded in 2000 as iGillottResearch in order to provide in-depth market analysis and data focused exclusively on the wireless and mobile industry. Before founding iGR, Gillott was a group VP in IDC’s telecommunications practice, managing IDC’s worldwide research on wireless and mobile communications and Internet access, telecom brands, residential and small business telecommunications and telecom billing services. Prior to joining IDC, Gillott was in various technical roles and a proposal manager at EDS (now Hewlett-Packard), responsible for preparing new business proposals to wireless and mobile operators.
Editor’s Note: Welcome to Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
