Hank Kafka, AT&T senior vice president of Architecture and Planning, delivered the opening keynote presentation on Day 1 of the LTE North America 2010 conference in Dallas, Texas. Kafka opened the session with the following statement:

If there is one thing you should take away from this conference, it’s that consumers and businesses have an insatiable demand for data.

The AT&T executive’s presentation focused on the fact that one of the biggest challenges facing wireless network operators today is that the majority of consumers don’t understand capacity problems.

AT&T, which spends billions annually to improve its network infrastructure and address the capacity challenge, believes that increasing network speed is only part of the solution.

The company has seen a 5,000% increase in mobile data consumption over the past three years. Kafka attributed this to two key drivers: social networks and video.

With regard to social media, Kafka stated that the average mobile Facebook user spends seven hours a month on the site and that social networks are second only to email in terms of consumer usage.

In discussing mobile video, Kafka cited statistics from Bytemobile’s 3Q 2010 Mobile Minute Metrics report, highlighting the following point:

‘The most prevalent type of video on wireless networks worldwide continues to be user-generated content available on YouTube and Google Videos. On average, this accounts for 48% of the total network video traffic.’

Kafka closed the session by setting the stage for the future state of mobile data demand – “It’s only going to accelerate.”

-Stacey Infantino

Image courtesy of Rene Reile via the Creative Commons attribution license.

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On September 28, Mobile Minute and Informa Telecoms & Media collaborated with Vodafone D2 in Germany to present “The Impact of Video Traffic Growth on Mobile Networks”. The webinar attracted a mix of network operators, analysts and media, with over 400 registrants from around the world. To access a full replay, please visit us at Mobile Minute.

Contributors to the webinar included Dr. Volker Sebastian, head of Multimedia Application Engineering at Vodafone D2; Mike Hibberd, editorial director of Telecoms.com; and Jeff Sanderson, head of Pre-Sales for EMEA and Latin America at Bytemobile.

Mike Hibberd began the discussion by summarizing the key growth trends driving the wireless market today. Most strikingly, he noted a projected 76% CAGR in global mobile data traffic from 2008 to 2013. This is due to a combination of factors, including flat-rate tariffs used by operators to stimulate adoption, improvements in network infrastructure, and the spread of high-end, data-hungry devices.

Volker Sebastian expanded on the challenge created by these growth trends, noting the role that various technological solutions will play in helping operators manage traffic. Vodafone D2, like many carriers in developed markets, is looking for ways to meet consumer demand within its capital budget constraints – specifically, demand for data that is skewed by the enormous popularity of streaming video content. With optimization techniques implemented by Bytemobile, Vodafone D2 has been able to realize a total data savings of approximately 25% of HTTP traffic (85% of its video traffic is streamed via HTTP).

Jeff Sanderson rounded out the session with an overview of the various media optimization and policy enforcement solutions that Bytemobile offers operators to realign revenue generation with bandwidth consumption. Through optimization techniques such as Just in Time video downloading, Quality-Aware Transcoding, Dynamic Bandwidth Shaping, and Media Caching, operators are able to enhance the efficiency of their networks and increase their ROI in network infrastructure. Most importantly, consumers enjoy an improved user experience, which supports retention and growth of the operator’s subscriber base.

Additional Mobile Minute events are planned for the coming months. We will cover these events on our website and blog as part of our ongoing efforts to provide thought leadership and consultative education to the rapidly evolving mobile internet space.

- Peter Turner

Image courtesy of Hector Milla via the Creative Commons attribution license.

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In May, Bytemobile sat down with Ronan de Renesse of Screen Digest to discuss the state of mobile media. This week, Ronan has been kind enough to answer some questions for our readers.

1) Screen Digest recently published a report on the state of the 3G mobile broadband market. Where do you see 3G mobile broadband fitting into the overall mobile ecosystem today, and where do you see it in three years? How does this affect what carriers are doing, aren’t doing or should be doing?
Mobile broadband today is worth more than mobile TV, mobile video, mobile music, and mobile games combined. The number of mobile broadband connections has multiplied by 10 between 2006 and 2008 and is still rising. Five years after the launch of 3G, mobile operators have finally found a way to monetize their 3G licenses. However, the real potential for mobile broadband is as a primary home connection, and today’s services work well only as a secondary broadband connection. As a result, growth is likely to decline over the next couple of years until mobile broadband can become truly competitive with fixed broadband.

2) You frequently cover mobile video and mobile TV. How would you assess the current state of the mobile video and mobile TV industries? What is the key driver that will increase adoption (network solutions, handset advancements, content)?
Mobile TV/Video is the mobile content category that has suffered the most from the economic downturn. In 2008, we experienced drastic changes in business models with the emergence of mobile content bundles such as SFR Illymitics in France and disruptive technologies such Telegent Systems’ analog mobile TV chipset. The industry realized that mobility by itself does not justify a subscription fee for mobile TV. Quality of experience (i.e., large screens, premium content, good QoS) is key in order to drive the uptake of paid-for mobile TV services. With the increasing availability of free-to-air services, the industry runs the risk of consumers thinking of mobile TV as a feature (like a camera or FM radio) instead of a service. In 2008, 76% of mobile TV users watched it for free.

3) How do you see the growth in adoption of mobile video and mobile TV affecting network infrastructure? Networks already seemed to be bogged down with data traffic. Are they ready for widespread adoption of mobile video and TV?
The rise of mobile broadband, added to the increasing popularity of smartphones (typically sold with flat-rate data plans), has certainly put a lot of pressure on 3G networks lately. Mobile operators are doing a lot to upgrade their networks as quickly as possible in order to accommodate the demand for mobile data. Fixed networks can only handle widespread adoption of online video and TV, and mobile networks are very far from it - especially considering that there are far more mobile connections in the world than fixed ones. However, there are other ways to get content on your handset than through the 3G networks. Over 90% of videos and music tracks on mobile phones are side-loaded from the PC. Taking control of this delivery mechanism and monetizing or reducing it is a big challenge for handset manufacturers and operators.

4) You recently published a report that discussed how, as the walled gardens come down, handset manufacturers are moving in to provide services to operators. Will handset manufacturers continue to drive and influence the wireless industry? Does anything threaten this influence?
The success of mobile broadband and flat-rate data packages has shown several mobile operators that they are better at selling access than content and that opening the walled gardens can work to their advantage. Mobile operators are therefore increasingly opening up to third-party service providers. Handset manufacturers, on the other hand, are suffering from a difficult economic context where mobile users opt for SIM-only contracts instead of handset upgrades. Handset manufacturers are therefore looking at alternative revenue streams and/or new ways to differentiate from their competitors, and content is coming up as a relatively good option. In addition, Apple has proved with its App Store that vertical integration of hardware, software and services works well in mobile.

5) Forrester recently published a report declaring that the term “smart phone” is dying off. Is there a future for mass-market handsets? Why or why not?
There is certainly still a future for mass-market handsets, which will be primarily driven by growth in emerging markets such as China and India. The recession has also helped to keep low-end handsets in the market. However, there has been cannibalization between feature phones and smartphones which are typically populating the mid-range and high-end device segments in Western markets. Smartphones have been taking market share from feature phones for the past 12 months, as smart phones become more accessible in terms of price and feature-rich. I would say that the term “feature phone” is more likely to die than the term “smart phone.”

Stay tuned for commentary from other key industry influencers on the trends and issues important to the mobile internet ecosystem. If you have any questions you’d like us to ask, feel free to leave a comment or send an email to sinfantino@bytemobile.com.

-Stacey Infantino

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Today Blackberry officially announced the launch of the Blackberry Storm, positioning it as the first real challenger to the iPhone.  Haven’t we heard that claim at least a half dozen times in the last year? (Samsung’s F700 and Instinct and LG’s Vu and Voyager, for example.) Not surprisingly, the Blackberry Storm addresses user-identified weaknesses of the iPhone with a removable battery, a 3.2-megapixel camera with video capture, cut-and-paste editing features, and built-in picture messaging. The iPhone has yet to really penetrate the enterprise, so the key advantage of the Storm could be Blackberry’s strength with corporate email and security.

What people aren’t talking about with the launch of new high-end, touch-screen phones is the impact these devices have on mobile data consumption and network infrastructure. The Blackberry Storm and the iPhone are great for browsing the web and quickly consuming mobile content, resulting in traffic growth like we’ve never seen before in the mobile space. Research shows mobile data growing at a rate of 10-15% per month for tier-one operators. This rapidly escalating data consumption poses a serious challenge to their network infrastructure.

To cope with the increasing stress on their networks, operators are looking to data caps imposed on users and next-gen technologies such as LTE and WiMAX. These solutions are not entirely viable, as enforced data restrictions are likely to result in subscriber opposition and the deployment of 4G technologies is still years away. In the interim, operators should take steps to improve overall network efficiency and capacity, manage data traffic and ensure the scalability of their network, while continuing to deliver a superior user experience.

Bytemobile solutions offer operators high levels of scalability and traffic control, enabling them to protecting their existing infrastructure investment through smart, adaptive optimization.  Since data traffic expands to fill the bandwidth available for it, the value of optimization is perpetual.

- Stacey Infantino

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