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Old 13-11-2014, 1:37 PM
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Video and data optimization can deliver $28 billion net gain to mobile operators...

Oslo, Norway, and Mountain View, Calif. - November 13th, 2014 - 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 today.

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."

Sample use cases

Philippines, churn reduction: Using the Philippines market, where there is some 4G subscriber adoption (2.5 million) but a much larger proportion on 3G (22 million), the average data throughput in the base station cell edge zones is estimated to be 365 Kbps without optimization. Boosting the quality of experience by enabling 30% to 60% greater data throughput can boost overall subscribers by around 2% per year and increase the subscriber retention rate equating to additional retained service revenues of US$204 million over a 5-year period.

Brazil, tariff upgrade: Using a conservative scenario of 2%, ABI Research calculates that an operator in the Brazilian market can generate an additional US$474 million in service revenue over a 5-year period from its 3G and 4G subscribers, attributed to faster user data rates and improved QoE.

Rocket Optimizer
Rocket Optimizer, from Opera Software's Skyfire unit, is a robust and surgical mobile video optimization solution that provides operators with Experience Assurance and cloud-based mobile video Quality of Experience (QoE) management. In August, Skyfire announced that it had added streaming audio optimization to the platform, and, in April, announced Rocket Insights, a video analytics dashboard that helps operators better manage their network loads by providing real-time analytics.

Further information and detail
Network operators wishing to explore the Mobile Video & Data Traffic Solutions Analyzer should contact Opera's Skyfire unit at Contact.
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