Feature Article

December 20, 2013

Mobile Video Pay-as-You-Go Passes: Top Operator Initiative for 2014?

Mobile video quality, software-defined networking (SDN) evolution and the death of all-you-can-eat pricing will dominate mobile carrier priorities for 2014, according to a round of crystal ball-gazing at Openwave Mobility.

Perhaps the boldest prediction the company makes is expecting multiscreen video viewing and TV Everywhere to push operators to segment out mobile video as a premium service, billed by usage.

“In 2014, we’ll witness several innovative wireless operators offer mobile video streaming as a premium service by tonnage or by time, which is more intuitive for users,” said John Giere, Openwave’s president & CEO. “By segmenting out video streaming as U.S. wireless carrier C Spire has done, users will pay a premium for the service – whether it’s a two-hour, five-hour or 10-hour pass – but they will always know what to expect on their monthly bills. On the other hand, subscribers who don’t stream mobile videos won’t have to pay for a service that they’re not going to use.”

It’s a strong prediction given the fact that premium, managed mobile video has been tried before (Anyone remember Verizon Vcast?) without much consumer interest. Of course, 2014 is a more mature era for watching video on mobile screens, but it’s still unclear whether consumers are willing to actually pay for the privilege when a host of apps, from Netflix to YouTube to Comcast Xfinity, offer unlimited viewing. It could be a better bet for mobile operators to instead take the data overage charges that come with unfettered video viewing.

But, taking Giere’s hypothesis, if users are paying for video streaming, they will not tolerate poor video quality. In fact, he pointed out that they rarely tolerate it now. So, he expects that carriers in 2014 will, finally, push QoE to the top of their priorities.

“In fact, operator trials of our Congestion Control solution have found that users prefer watching mobile videos which play immediately and smoothly with no buffering, even at the expense of visual degradation,” he said. “Otherwise, mobile users tend to abandon mobile content if the page is slow to load or constantly stutters.”

So, he thinks, operators will push mobile video optimization to the top of their priorities in order to ensure levels of QoE. And by becoming contextually-aware, operators will be able to adapt to dynamic viewing conditions and provide an optimal user experience—thus finding differentiation, if not new revenue streams.

Openwave also believes that the boundaries between SDN and network function virtualization (NFV) will begin to blur.

 “In 2013, there was a huge amount of hype surrounding SDN and NFV,” said Indranil Chatterjee, vice president of product management, marketing and strategy. “Vendors claimed their ground and established their initial strategies for the technologies. In the meantime, the collective market came up with unique and innovative use cases, potential benefits and business justifications for using SDN and NFV. NFV began to experience rapid evolution at the heels of ETSI publishing the first standards in October which included key principles of SDN.”

2014 is a logical follow-on, he added. Although capable of working independently, the two concepts are so interrelated that their true potential can only be achieved when there’s synergy between both models.

“For example, dynamic resource orchestration and intelligent service orchestration can only be achieved through collaboration of both technologies, enabling increased network elasticity, improving service velocity down to mere minutes and improving service differentiation,” he said.

We will also see SDN and NFV business cases pivot more towards monetization through personalized service chaining and service velocity, proving to operators that there is real value within the technologies beyond the over-hyped benefits of cost-savings and network flexibility that are frequently cited.

And finally—no surprise here—Openwave believes that unlimited data pricing strategies will finally meet their timely death for all but budget carriers.

 “The diversification of mobile data pricing has made the market more interesting and more varied,” said Michael Rodgers, senior strategist at Openwave. “With the introduction of new mobile data pricing models such as shared data plans and QoS-based pricing, to application- and service-based pricing models, operators now have a plethora of options for creating new subscriber-friendly, ARPU-increasing data pricing models.”

More and more operators such as Verizon and T-Mobile have finally done away with unlimited data packages. That is not to say that unlimited data will die off completely (consider Sprint’s unlimited-for-life offering), but it will become the fallback for budget carriers, he thinks.

“These carriers either lack the technologies to introduce personalized data plans or they will attempt to disrupt established markets by turning back the clock to all-you-can-eat data plans in order to seize market share.”

Overall, as demand for mobile data services increase exponentially, larger wireless operators will be re-examining their strategies for data monetization.

“Whether it’s through offering subscribers a daily or weekly streaming video pass, or a better mobile experience for a premium, we’ll begin to see more operators leverage policy engagement and experiment with various mobile data pricing strategies in order to create more touch-points with subscribers and maximize ARPU,” Rodgers said.




Edited by Blaise McNamee


comments powered by Disqus

FOLLOW MobilityTechzone

Subscribe to MobilityTechzone eNews

MobilityTechzone eNews delivers the latest news impacting technology in the Wireless industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter