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OTT Video Continues To Drive Exponential Growth
- Video already represents over 60% of online network traffic and will continue to grow unabated as more subscribers shift their viewing from TV to online.
- During the election night, Akamai reported that peak election-specific traffic was 7.5 Tbps at 11:53 p.m., an increase of just over 70 percent over the 4.4 Tbps it saw in the September presidential debate.
- On June 19, several hundred thousand US fans of the television drama Game of Thrones went online to watch an eagerly awaited episode—and triggered a partial failure in the channel’s streaming service. Some 15,000 customers were left to rage at blank screens for more than an hour. The incident was just one particularly public example of an increasingly urgent problem: with global Internet traffic growing by an estimated 22% per year, the demand for bandwidth is fast outstripping providers’ best efforts to supply it.
- The substantial rise in the amount of data consumed over fixed and mobile networks reflects our ever growing demand for online video content services. But this increase in data traffic seems to be driven more by intensity of use rather than significant growth in device subscriptions—fixed-line telephone subscriptions are declining and we’re seeing only slight increases in the number of mobile services and internet subscriptions. *Source: Australian Communications and Media Authority
- The CRTC’s Communications Monitoring Report for 2016 found broadband Internet usage jumped 40 per cent from 2014 to 2015, while mobile data usage saw an even larger 44-per-cent spike. The average Canadian household now downloads 93 gigabytes of data per month.
- Quality of service (QoS) is important at any time of year, but during major events like the Summer Olympics, disruptions and outages can have drastic consequences. It goes beyond upsetting sports fans — any customer who may have already had negative feelings towards your brand could become even more disengaged if the one event they have been looking forward to is disrupted.
Usage Based Billing Gaining Ground
- While markets like Canada and Australia have shifted to usage based services over the past 5 years, 2016 saw wide rollout of this service model in the USA. Early rollouts show the importance of customer education and accuracy in subscriber usage metering.
- CenturyLink appears poised to join ISPs such as Comcast, AT&T and Mediacom Communications that are testing or have launched usage-based policies for residential broadband services.
- After upping the cap in trials of usage-based broadband pricing in Cleveland, Cox Communications announced it is expanding the trials to Georgia and Florida.
- The argument for wireline data caps is also helped by the fact that wireless carriers have already shifted away from unlimited data plans. Mobile operators have spent the last few years conditioning customers to think about broadband service in buckets of data. Consumers know they can buy data by the gigabyte for their mobile devices, which makes it easier for wireline ISPs to enact a similar model, especially when broadband providers for the home are more likely to set thresholds at the terabyte level rather than at a handful of gigabytes.
- “We know that our meter is right… with our meter, we give you a guarantee that it is perfect,” one Comcast customer service representative insisted to another subscriber who disputed data charges a few months ago. That subscriber, Chris from Georgia, had been measuring Internet usage on his own router and found big discrepancies between his own measurements and Comcast’s.
- Usage based billing is not a simple service model to enable within the network or introduce to market but these 4 best practices are critical to achieving commercial success.
Service Model Innovation Finding Markets
- Broadband service innovations with prepaid data services and zero rating are emerging for wireline service providers in order to expand addressable markets and create competitive differentiation. Expect to see more
- Comcast Corp. will roll out a new pay-as-you-go program that lets consumers sign up for television and internet services for seven or 30 days at a time, a blueprint used by the wireless industry to attract low-income households. Under the plan, called Xfinity Prepaid Services, customers will pay a one-time equipment setup fee and can “refill” their service without limitations on the number of times they can renew, Comcast said. The service doesn’t require a credit check or contract.
- The Dallas-based telecom company charges other content providers if they wish to be a part of its “Sponsored Data” program and exempt from data caps, but doesn’t charge its own affiliate, according to Business Insider. This practice of allowing customers to use certain applications or view specified videos without charging data, called zero-rating, could be hindering competition and “may harm the open Internet, such as preferring [its] own or affiliated content [and] demanding fees from edge providers,” the FCC said in its letter, citing the Open Internet Order.
- To gain more revenue from your existing subscriber base, you can target customers with temporary prepaid service enhancements over your existing network infrastructure. An example of this would be offering a prepaid time-of-day Internet speed boost package to a customer with habitual service usage patterns. The OSS can be configured to automatically monitor the enhancement and then switch it off when time expires.
Regulatory Environment Continues To Shift
- Regulatory bodies were busy in 2016 assessing the impacts of zero rating and 2017 is shaping up to be a year of even more uncertainty and change. While net neutrality legislation was approved in Europe, it appears there will be turbulence in the USA as the FCC considers changes to its net neutrality policies.
- Today, the Body of European Regulators of Electronic Communication (BEREC) published its implementation guidelines for Europe’s net neutrality rules. While public protests resulted in several positive changes from a net neutrality perspective, BitTorrent throttling is still allowed.
- Analysts expect an FCC run by a Trump appointee would roll back those rules, which have been opposed by Republicans in Congress and major communications companies. The president’s party typically occupies three of the commission’s five seats, and the president designates one member as chairman. Trump could name a new appointee such as Hershman chairman or possibly designate current Republican FCC member Ajit Pai as chairman.
- Canada’s telecom regulator will take a close look at its policy on net neutrality as a public hearing begins this week on Internet pricing practices that allow access to certain content for “free” but charge customers regular rates for other data usage.