By Ofer Gottfried,
CTO, Flash Networks.
All signs indicate that 2015 will be a year of many changes. The exponential increase in data traffic will continue, disruptive technologies will be introduced, and competition with content providers will heat up, while new regulations loom on the horizon. Despite all of this change, subscribers will continue to demand a superior quality of experience and new services, providing mobile operators with new revenue generating opportunities.
Here are the top five trends we predict for 2015.
#1: LIVE STREAMING SERVICES WILL BOOST TRAFFIC VOLUMES
On demand streaming, which includes audio and video, was up 42% over last year, with on-demand audio up 50.1%. According to an APAC tier1 operator, more than 90% of users are listening to music on Spotify on their phones. Other bandwidth hogs include Twitch.TV, where expert gamers stream live game action, along with Snapchat which has surpassed other messaging services due to the ability of users to send pictures easily. All these new sources of traffic continue to put a strain on operator resources while threatening the quality of the user experience.
#2: VIRTUALIZATION WILL BE MORE DOMINANT IN THE CORE NETWORK
Tier 1 operators in all of the geographies are doing proof of concept of network virtualization solutions which could help save on hardware costs and reduce the time it takes to offer new products to consumers. Some vendors are pushing for their proprietary solutions and others are moving for more open solutions. In the short term, there will not be one strategy that clearly dominates. Only time will tell which strategy wins out in the end.
#3: MORE ENCRYPTED DATA
As privacy concerns increase, Internet data encryption is on the rise. Last year the proportion of encrypted traffic rose significantly from 1.47% to 6.10% in Europe, and this number is expected to rise even further with the release of the HTTP 2.0 standard in 2015. As the rate of encryption grows, mobile operators will be forced to rethink their service offerings and value proposition, and how they manage capacity and customer experience. There will be more interest in solutions that can manage encrypted traffic while enabling operators to maintain high quality service levels. At the same time, the increased demand for security and privacy will create opportunities for operators to offer new consumer services in this area.
#4: NEW THREAT TO NETWORK NEUTRALITY
Although President Barack Obama has pledged his support for a controversial net neutrality option that would have the Federal Communications Commission regulate broadband similar to a phone company, the decision to wait until 2015 to vote on this measure means it will receive more scrutiny from the incoming Republican majority in Congress. Republicans like House Speaker John Boehner of Ohio broadly oppose net neutrality out of fear that new rules could discourage investment. This environment of uncertainty will delay many decisions regarding the launch of premium services by mobile operators.
#5: INCREASED COLLABORATION BETWEEN CONTENT PROVIDERS AND CARRIERS
The tension between content providers and operators has heated up several times in the past year. Both sides are beginning to realize that better collaboration may be necessary to ensure a positive user experience. Consider for example that Netflix, a US-based Internet television network, had 15% of its subscribers view content on iPads in 2013 which was three times the amount from the previous year. Content providers and operators will explore new partnerships in 2015 which will result in smoother video viewing and possibly even content recommendations and targeted offers.
2015 promises to be an interesting year, filled with heated competition and controversy. The players who will come out ahead are those who can keep their finger on the pulse of changing regulations and new technologies, while forging alliances for future growth.