Mobile Video – Don’t Count the Operators Out Yet

Sep 28, 2017

Background

Video content consumes the highest amount of wireless bandwidth for the Tier I mobile operators in the United States.  Frost & Sullivan’s research indicates that mobile video traffic comprises nearly 70% of total cellular mobile traffic for Tier I mobile operators in the United States and projects that this figure will approach 85% by 2022.  A significant share of mobile video traffic is generated from over-the-top (OTT) video services. Even though OTT mobile video may not generate premium revenues for mobile operators, operators must invest in advanced wireless broadband technologies to support the bandwidth requirements of mobile video. Therefore, mobile operators face the challenge of monetizing video traffic through profitable business cases that can support the capital infrastructure expenditures needed for mobile broadband network deployments.  

Operators Strategies for Mobile Video

The various ways in which the US mobile operators can drive adoption of mobile video include:

  • Offer mobile video with unlimited mobile data plans. Mobile operators can include access to premium mobile video content for subscribers of unlimited mobile data plans in the US. In these cases, video services are used as incentive to drive adoption of unlimited mobile data plans.
  • Promote service bundles. Providers with a set of fixed, mobile, and content assets can offer content service bundles with multi-service discounts in order to deliver a higher value to customers. By integrating multiple video services in a mobile-enabled manner, mobile operators can differentiate from pure-play providers that lack a comparable set of backhaul, access, and wireless services in their product portfolio.
  • Invest in original content. Some mobile operators are investing in developing high quality, original, and aggregated content that can be offered to their customers. Mobile operators can also selectively zero-rate specific content channels for their customers.
  • Leverage mobile video advertising. While not directly related to the consumer experience, tier-I mobile operators are heavily invested in leveraging the mobile video inventory for ad monetization. Some mobile operators are investing in advanced content recommendation engines to help deliver an improved customer experience for mobile video, particularly for original content developed by the operators.
  • Optimize advanced networks. Mobile operators continue to optimize their networks to support multimedia content delivery. Innovations such as software-defined networks (SDN) and the upcoming fifth generation (5G) networks should help support the growing adoption of video services and deliver a differentiated network experience to customers.

Wrap Up

While OTT content will continue to capture a significant share of consumers’ media consumption, there are unique ways in which operators can leverage video to increase revenues and reduce churn.  A video-centric approach to mobile data will be a competitive necessity in the era of 5G in the United States.  To learn more about the US tier-I mobile operators’ mobile video strategies, please refer to this Frost & Sullivan market insight.

 

 


Vikrant Gandhi

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Fourteen years of product marketing, research, and consulting expertise, which includes supporting clients’ needs through more than 140 syndicated market research deliverables and consulting assignments. Particular expertise in Assessing next-generation telecommunications trends, technologies and market dynamics; Helping clients develop and execute their go-to-market strategies; Providing continuous inputs to clients into new market developments and helping them understand the strategic implications.


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