As we kick off 2018, it seems a fitting time to outline our predictions for the new year. Following is a summary of what our team of experts expect to materialize in 2018, based on our industry expertise, analysis… and a peek into the Openwave Mobility crystal ball.
2018 – A make or break year
Did you know that in 2017 alone, roughly 500 TV series were produced? But “TV” series might be a misnomer, because this content is increasingly being watched on mobile devices, not on televisions. Plus nearly 40 percent of all mobile video traffic was HD last year, requiring 3-4x more bandwidth than standard video. Mobile operators are struggling to cope as some networks are stretched to the breaking point.
In 2018, we forecast that HD will reach 50 percent of mobile video traffic. Consider that subscribers now say mobile video quality is more important than voice calls, and yet mobile data revenues are under attack from… you guessed it…. OTT players like Netflix, Amazon, Google and Facebook. This means that 2018 will be a make or break year for mobile QoE. Forward looking operators have started to fight back to take control of their networks and subscribers.
Going, going gone – mobile operators in the dark
Operators can’t manage what they can’t see with conventional traffic management technology. And yet, encryption protocols from Google, Facebook and others continue to darken mobile networks for mobile operators. To get a feel for the sheer scale of this growth consider Google QUIC. QUIC has grown at an astonishing CAGR of 284 percent — nobody saw this coming!
Based on this, we predict that 90 percent of internet traffic will go dark for operators in 2018. Given that Google QUIC is expected to account for 32 percent of global internet traffic, this is another nail in the coffin for operator’s ability to manage subscriber QoE, unless they take proactive steps.
NFV: Reality dawns
Openwave Mobility research conducted in 2017 revealed strengths and weaknesses in mobile operator NFV strategies. On a positive note, AT&T’s initiative with Open Source software and clear objectives tied to annual bonuses provided inspiration to a number of other operators. But on the downside, some operators have misaligned the financial and business case for NFV. For example, the majority of an operator’s budget, typically 80-90 percent, is still made up of CapEx. This is fundamentally misaligned with the very DNA of a cloud model, which is pure OpEx. We anticipate tough conversations between finance and operations groups to continue in 2018 in order to resolve this cultural disconnect.
Additionally, some operators risk crippling their NFV strategy before it gets off the ground by creating vendor lock-ins and technology siloes. Ironically, these are some of the very problems NFV was set up to resolve. Based on our observations, successful operators appear to spend 70 percent on VNFs and 30 percent on NFV infrastructure. We expect that to continue.
The X factor for security
The iPhone X created a buzz when it introduced facial recognition to the world. Rather than allowing OTTs such as Google and Apple to ‘own’ subscriber identity and security, mobile operators have been working with industry initiatives such as GSMA Mobile Connect on authentication platforms. Yet, OTT data encryption has impacted this too. Header Enrichment, a security identification method used by operators, does not work with secure traffic. New technologies to manage encrypted data are turning the tide for operators.
In 2018, a handful of savvy operators will start to use identity and security mechanisms to alleviate the headache of remembering usernames and passwords. Our recent research conducted in the US and Europe found that 76 percent of subscribers want help from mobile operators to make life easier with single sign-ins for apps and services.
The outlook for 2018: A tale of two halves?
The continuing convergence of media and communications presents phenomenal opportunities. Success will be defined by how mobile operators manage and navigate their mobile data, which has once again grown 100 percent year-on-year. A key challenge is that video accounts for 76 percent of that growth. We’re also seeing a dramatic shift in the cloud, as an increasing amount of network traffic is being delivered via NFV, and 92 percent of network traffic will be delivered via the cloud by 2020.
Given these trends, mobile operators require a unified identity profile for each subscriber. This would take into account the subscriber’s requirements and ensure they receive the best possible QoE — however and wherever they consume media. This puts the operator on the best possible footing to monetize their data and sustain this virtuous cycle of mobile video and cloud in 2018.
Are you prepared for 2018? Do you agree with our predictions? Contact us to discuss strategies for a happy and prosperous New Year!
Article based on Openwave Mobility press release issued December 14th 2017.