Video and data optimization can deliver $28 billion for Mobile Operators, reveals Opera Software

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Mobile operators globally can benefit from a net gain of at least $28.7 billion over five years by deploying mobile video and data optimization technology in their networks, according to new findings from ABI Research, revealed by Opera Software’s Skyfire unit.

The independent research, carried out on behalf of Skyfire, details how video and data optimization can positively impact quality of experience for users, which directly translates into reduced churn and subscriber tariff upgrades. It can also dramatically reduce operators’ capital and operational expenditures through the expansion of virtual capacity, resulting in significant total-cost-of ownership (TCO) savings.

Key findings, based on a conservative assumption that if just one in three operators deploys video and data optimization technology, the savings and revenue boost will therefore be as follows:

•Churn-reduction savings: $12,947 million
•Tariff-upgrade revenue boost: $6,481 million
•Total-cost-of-ownership reduction savings $9,347.6 million
•Total over 5 years: $28,776 million

Mobile video and data optimization technology play a significant role in all three areas. Churn reduction savings are brought about by boosting the quality of experience for users, which leads to additional revenues from retained customers. Operators can generate additional income from a proportion of end users through upgrades to higher tariffs, driven by improved quality of experience and, therefore, a greater desire for more data. TCO savings are based in part on boosts in software-based virtual capacity for mobile video, which result in more video being played successfully per unit of CapEx.

“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,” says Nitin Bhandari, Skyfire CEO and Opera SVP of Operator Products. “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.”

Regional variations
ABI Research developed an 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.

The model uses actual country market data, from economic and demographic data to mobile operator subscription and radio access network (RAN) deployment data.

The analyzer produced the following outputs for each region, combining to form the “Total worldwide revenue boost, churn and TCO savings”:

•Asia-Pacific: $9,320 million
•North America: $6,375 million
•Western Europe: $4,954 million
•Eastern Europe: $2,610 million
•South America: $2,600 million
•Africa: $1,784 million
•Middle East: $1,133 million

“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,” says Jake Saunders, Vice President and Practice Director, ABI Research. “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.”

 


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TelecomDrive Bureau covers the latest developments happening in the space of communications, devices and innovations in targeted geographies of India, SAARC, Asia Pacific, Middle East and Africa regions. TelecomDrive Bureau is headed by Zia Askari. He can be reached at ziaaskari@telecomdrive.com