Asia-Pacific I 2011 (14)

Theme: The video renovation

Video is the fastest growing traffic category on the net, by the end of 2010 it will have surpassed peer-to-peer traffic as the growth volume leader. By 2014, according to one unusually accurate source video will account for more than 90 per cent of consumer Internet traffic. Managing an increase of this magnitude will tax the ingenuity, financial structure, human resources and physical infrastructure of communications service providers and vendors at every level of the value chain. Worse, competition is pushing down prices and ARPUs are falling – just when networks must be expanded to handle the growing traffic.

Mobile data will grow almost 40 times between 2009 and 2014 and video will account for the biggest part of the growth. Overall, by 2014 3D and HD video traffic will account for more than 40 per cent of Internet video.

Operators have to build new business models and network capacity in parallel and they have to discover how to turn video traffic into cash. Their core business will no longer be telecoms – most of their revenues will have to come from other related sources, billing for bits is not enough, service providers need to discover ways to bill for what they deliver and equipment vendors of all types will have to race to help them do it more efficiently and cost effectively.

Finding ways to earn more from higher margin business users will help, as always, but not enough; consumer traffic is growing more rapidly than business traffic – analysts expect that business will generate less than 15 per cent of the traffic by 2014.