Industry Blog

MWC 2017: We need to talk about 5G…or do we?

By John Giere, President & CEO of Openwave Mobility

Let’s be honest, there was very little new at this year’s MWC.  Of course, this fact didn’t discourage the industry “Genies and Myth Makers” from pulling out their annual MWC magic crystal balls.  Ironically, it was very reminiscent of past shows when the then panaceas for all things mobile came in the form of 3G and 4G hype.  Now 5 is the magic number.

The 5G hype was impossible to miss. The large infrastructure vendors were loud and proud no doubt hoping to change the narrative away from their dour financial performance of recent years.  The fact that 5G standards do not exist was a minor nuisance to the myth makers. It is estimated that 25 operators are already lab-testing 5G and by media accounts, they are achieving impressive speeds.  While network providers are testing the 5G waters, many operators — especially those outside the US market — are still struggling with the less glamourous task of managing profitably and the explosive growth of data on their current networks while securing a solid Return on Investment (RoI) on previously hyped 3G and 4G technologies.

According to Cisco, data travelling on mobile networks increased 63% in 2016.  Every month carriers are delivering over 4 exabytes of videos to their subscribers. To put that into perspective, that’s over 4 billion gigabytes every 30 days! The same study found that 4G accounted for nearly 70% of traffic with 3G at 24% and…5G at 0%. That’s why most operators at MWC this year had more pressing business priorities than the future of 5G. They wanted to learn about real-world solutions to the conundrums they are facing in the here and now.  We at Openwave Mobility believe our mission is to help our customers to manage their network performance more efficiently and monetize mobile video more effectively — video makes up 50% or more of today’s traffic pie. We believe that must be front and center of every operator’s company strategy going forward.

The OTT encroachment

Operators are facing a pincer attack. The bulk of video traffic on mobile networks is being generated by OTT services such as Netflix, Amazon Prime and YouTube.  Since we are talking MWC, let me give a Barcelona perspective:  Think of OTTs as out-of-town guests who come to eat fine cuisine in a restaurant, consume spectacular wine and then walk out on the bill.  That’s what OTTs are doing to operators.

These companies are applying rigorous encryption protocols and their secure data (https and UDP) is preventing network providers from using traditional tools and analytics to ensure a satisfactory subscriber Quality of Experience (QoE). OTT traffic is consuming vast amounts of bandwidth while this new encryption is preventing carriers from being able to monetize these services. It’s like trying to drive a car at top speed without a steering wheel!

A survey — conducted by the GSMA’s Mobile World Live — about 2017 operator priorities found that customer experience came out tops on the list of carrier priorities. Research from Openwave Mobility revealed that subscribers who suffer poor video QoE on their current mobile network provider would not hesitate to churn to a competing mobile operator. In fact, subscribers will only tolerate six seconds of buffering before they abandon the video in frustration. The onus is firmly on the carrier to manage QoE.  

How can you efficiently manage and effectively monetize video?

A couple of years ago, T-Mobile USA grabbed the mobile video bull by the horns and launched Binge On. That helped the US carrier to boost ARPU, subscriber numbers and importantly, profits. While T-Mobile moved on from Binge On a few months ago, the initiative has inspired other carriers to launch innovative zero-rated plans that go one better than Binge On. Powerful data management technology available today allows operators to zero-rate popular services like gaming, streaming, or even roaming to boost ARPU – and minimize the impact on the network.

How do you deliver unlimited video and maintain quality? Binge On’s ‘secret sauce’ was network data optimization. That enabled the US operator to deliver video at 480p instead of 720p or 1080p. Subscribers were happy and the zero-rated video did not break T-Mobile’s network! Why? On a small screen, the distinction between 720p and 480p is negligible and intelligent data management technology relieves network loads. What’s important is delivering subscribers real value and ensuring that they enjoy contextually superb QoE.

How do you monetize mobile video traffic? In the past, when partnering with OTTs, operators had to manually configure their network to recognize each qualifying service. Not anymore. New NFV-based application monetization solutions allow operators to accurately identify and differentiate traffic streams dynamically. New technology can recognize and fingerprint data flowing from services such as Netflix, YouTube or Hulu. This means that operators who may not have the resources to negotiate individual OTT deals can now launch and monetize services within weeks or even days, giving carriers a considerable competitive business edge.

Because you’re worth it

Conventional traffic management technology has not been able to grapple with encrypted data and that has left too many operators unable to manage QoE. However, in the past seven months, seven operators deployed Openwave Mobility’s technology to effectively manage the surge in encrypted traffic. These operators have a combined footprint of over 100 million subscribers and they value their customers’ QoE.  Our solutions have been proven to deliver outstanding QoE while giving them the capability to monetize their video traffic.

The 5G Genie Ball

Like any new increase in bandwidth, 5G will be crucial to operators. However, carriers need to get 4G to a better profitability level and not put the cart before the horse. New technologies will create new demand and no doubt increase consumption, as we saw with 4G.  However, that does not, as we’ve learned in recent years, necessarily convert to new revenue and profits. Thus, getting QoE, traffic management and monetization capabilities in place today is fundamental to a profitable business — even while you drool over those 5G speeds – and dream of all the new 4K videos that you will watch in real time.  Well it is time for the Genies to put away the crystal balls and go back into their lamps — until next year!