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Mobile Operators to Gain $28 Billion with Video and Data Optimization, Says Opera Software

Mobile Operators to Gain $28 Billion with Video and Data Optimization, Says Opera Software Image Credit: Netflix

According to an independent research commissioned by Opera Software, mobile operators can make an additional gain of at least $28.7 billion over the next five years by having in place mobile video and data optimization technology. The research findings made by ABI Research reveals that enhancements to the quality of experience on mobile video services significantly impacts the subscribers' takeaway on the operator and plays a major role in ensuring customer retention and operator's ability to rake in more revenues from their mobile data services.

ABI's findings pinpoint to various means by which operators can rake in the extra revenue including churn-reduction savings that are expected to contribute $12.9 billion followed by reduction in total-cost-of-ownership (from savings in capex and opex arising from the ability to expand the virtual capacity of the network) which is expected to deliver savings of $9.3 billion and revenue boost from tariff-upgrades which is predicted to roll in another $6.48 billion.  

The quality of mobile video becomes key in driving the revenue strategies of today's operators as video content becomes the most popular content accessed on mobile devices. However, the data costs concerns and poor delivery of video over mobile connectivity which results in buffering, stuttering and stalling often sees subscribers being too cautious in clicking the 'play' button on video clips that appear on their screens and often exit a video half-way when it plays for too long. The impact of poor delivery of video on mobile devices is particularly significant in the mobile advertising space as advertisers continue to increase their spending on mobile video ads that are designed to be delivered via browsers and various mobile applications including OTT apps. Video delivery technologies including compresssion and optimization will hence become key in ensuring that videos that reach the target audience are actually viewed and that after viewing, subscribers come back for more similar content.

The research results which were shared by Opera Software Skyfire unit also provide the breakdown by regions of the gain from the implementation of video and optimization technology. The region to benefit the most according to the research is Asia-Pacific at $9,320 million potential net gain, followed by North America at $6,375 million and Western Europe at $4,954 million. Operators in Eastern Europe and South America are expected to register gains of  $2,610 million and $2,600 million respectively while Operators in Africa and Middle East are expected to gain around $2,900 million. These figures were produced by ABI Research via simulation using its interactive “Mobile Video & Data Traffic Solutions Analyzer” that allows seven developed and emerging-market operator scenarios to be evaluated to assess the impact of mobile video and data optimization. Zooming in to specific countries, the analyzer showed savings/gains made by operators in these countries. For example, improvement in video delivery in Brazil is expected to contribute in increased uptake of mobile data resulting in $474 million in service revenue per operator over the next 5 years. In Philippines, operators are expected to retain revenues of $204 million over a 5 year period by reducing churn among their subscribers, specifically their 3G subscribers. 

Opera Software said in its statement that its Rocket Optimizer from its Skyfire unit provides a robust and surgical mobile video optimization solution that provides operators with Experience Assurance and cloud-based mobile video Quality of Experience (QoE) management. The solution also covers streaming audio optimization and a video analytics dashboard -  Rocket Insights - that helps operators better manage their network loads by providing real-time analytics, added Opera.

Nitin Bhandari, Skyfire CEO and Opera SVP of Operator Products
The continued rise in data consumption continues to put substantial pressure on mobile operator networks, and user experience is now seriously suffering as a result. End users are hurting, and many operators are using ‘band aid’ equipment patches and fixes to keep existing networks and infrastructure up and running – hardly a long-term solution. ....This new analysis from ABI Research demonstrates that mobile video and data optimization can make a significant and positive impact both to the subscriber experience and an operator's own user-experience KPIs.These elements all combine to bring enormous financial benefit to operators’ business performance.

Jake Saunders, Vice President and Practice Director, ABI Research
During the course of our interviews with the mobile operator community, it became clear that many networks have been historically designed to only support the sporadic needs of a voice and messaging client base. End-user expectations are rapidly evolving; operators must now deploy mobile data and video optimization solutions that can effectively enhance the amount of traffic the operator can handle in a given location. Our research, and analyzer, shows that the potential benefits of mobile video and data optimization translate not only to expanded virtual capacity and reduced capital infrastructure spend, but also to reduced churn by delivery of a more satisfactory and richer mobile internet experience. Even in a monthly data quota environment, there is an opportunity for operators to up-sell the mobile internet experience to their customers.

Author

Executive Editor and Telecoms Strategist at The Fast Mode | 5G | IoT/M2M | Telecom Strategy | Mobile Service Innovations 

Tara Neal heads the strategy & editorial unit at The Fast Mode, focusing on latest technologies such as gigabit broadband, 5G, cloud-native networking, edge computing, virtualization, software-defined networking and network automation as well as broader telco segments such as IoT/M2M, CX, OTT services and network security. Tara holds a First Class Honours in BSc Accounting and Finance from The London School of Economics, UK and is a CFA charterholder from the CFA Institute, United States. Tara has over 22 years of experience in technology and business strategy, and has earlier served as project director for technology and economic development projects in various management consulting firms.

Follow Tara Neal on Twitter @taraneal11, LinkedIn @taraneal11, Facebook or email her at tara.neal@thefastmode.com.

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