For cable operators fixated on the looming wireless opportunities, this week's "Ericsson Mobility Report" quantifies the vast expansion in wireless broadband - especially video - during the next five years: a 13-fold increase in mobile video traffic by 2019.
"Technological improvements like new video compression techniques will lead to more effective usage of data throughput, and will be beneficial ... in accommodating the large expected demand," the research report explains. "The strong growth predicted for mobile video will also heighten the importance of efficiently handling traffic volumes."
"Video is the largest and fastest growing category of mobile data traffic," says the report, which predicts that video will represent more than 50% of the total data traffic on cellular networks in 2019.
In a finding that is particularly pertinent to cable operators exploring ancillary wireless delivery systems, the study observes that today, "Heavy and medium video users consume proportionally more video over Wi-Fi than [via] cellular networks."
The Ericsson study analyzes the impact on mobile data-plan pricing. In general, Wi-Fi consumption is nearly four-fold greater than cellular data consumption: 1,100 MB for users of limited data plans versus 4,200 MB for Wi-Fi customers. The spread is only slightly smaller for customers with unlimited data plans.
Ericsson's research segments current and prospective wireless broadband users into six categories and then characterizes "power users" (highest frequency usage of all applications) and "video-centric users" as driving the move toward wireless broadband. About 10% of all smartphone users in the U.S. today are "power users" and 6% are "video-centric," the study concludes.
Mobile broadband subscriptions will see a 25% CAGR (compound annual growth rate) globally during the next five years, Ericsson predicts. In particular, North American wireless operators will have about 85% of subscribers on LTE technology by 2019, facilitating their competitive offerings.
Ericsson's global outlook, which includes regional segmentation for North America, provides a useful perspective in the context of this season's deluge of analyses, including the recent PricewaterhouseCoopers report on video platforms and the annual Cisco Visual Networking Index, among others.
The Ericsson study singles out "changing user behaviors" that are creating more video consumption via mobile devices. It focuses on the devices' larger screens "which [highlight] the importance of picture quality for streamed video." The report also points to the growth in mobile advertising, tied to the appeal of wireless streamed video.
In addition to its consumer-centric topics, Ericsson's 32-page report includes findings that cater to cable's expanding commercial services agenda. In particular, the section on machine-to-machine (M2M) "transformation" describes the migration of traffic to LTE devices "and more powerful processors."
The report also delves into "small cell coordination issues," which includes "improving indoor app coverage and capacity." That factor involves not only business applications but potentially will also affect home networking solutions - another cable target market.
Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.
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