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The State of Mobile Video 2015
The smartphone has overtaken the tablet as the go-to device for TV Everywhere consumption; the U.K. is poised to lead the world in mobile connectivity; telcos will gain more spectrum, but not quickly enough; and LTE-Broadcast is coming to market.
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Video is the largest and fastest-growing segment of mobile data traffic, which in turn is driving significant increases in internet traffic. IGR projects that mobile video will account for 71 percent of all mobile network data traffic in 2016, and according to the Mobile Analytics Report, published by Citrix in September, video generates 42 percent of daily data traffic volume on any given network.

In its Mobility Report (June 2014) Ericsson concludes that rising smartphone subscriptions are the main driver for the rise in video over mobile. In Western Europe, mobile data traffic is expected to grow more than 8 times up to 2019. The improved speed and capacity of high-speed packet access (HSPA) networks, combined with the deployment of LTE, will fuel consumer demand for a better user experience.

Globally, Ericsson finds that video is the largest contributor to traffic volumes on any device and represents 35 percent of the mobile data traffic associated with smartphones and 50 percent on tablets. These figures are roughly comparable to those from BBC iPlayer, for which requests to view from tablets (37 percent) and smartphones (24 percent) now dominate. Yet smartphone usage on iPlayer is growing more quickly (at 32 percent year-on-year) than tablet video requests (25 percent), a trend mirrored in macro findings from the latest Adobe Video Benchmark.

Indeed, the smartphone has overtaken the tablet as the go-to device for TV Everywhere consumption.

Adobe reports that 13.6 percent of video starts are instigated from smartphones, while 13 percent come from tablets. Video requests to smartphones rose 59 percent over the last year, more than double the 29 percent rate of increase of tablet requests. Adobe attributes this growth in smartphone video use to larger screen sizes (the iPhone 6 Plus, for instance, boasts a 5.5" display) and rising penetration of the devices.

Ofcom figures report that 44 percent of U.K. homes own a tablet (up from 25 percent in 2013) and that six out of 10 Britons own a smartphone (Deloitte puts the figure at 35 million people) and are consuming video in various forms, including streaming movies and TV, UGC, and video telephony, over both cellular and Wi-Fi networks.

U.S. and U.K. users prefer Wi-Fi to cellular networks because of better network speed, cost, and reliability, according to Ericsson.

According to Ericsson’s latest Mobility Report, consumers use far more data for video than for any other application. (Source: Ericsson)

Global mobile subscriptions are expected to reach 9.3 billion by 2019, with 5.6 billion of these being for smartphones.

“The rapid pace of smartphone uptake has been phenomenal and is set to continue,” Douglas Gilstrap, senior vice president and head of strategy at Ericsson, says in the report. “It took more than 5 years to reach the first billion smartphone subscriptions, but it will take less than 2 [years] to hit the two billion mark.”

Its research also noted that by 2019, almost two-thirds of the world’s population will be covered by 4G/LTE networks.

As a result, video advertising on mobile phones is on the march. In the first half of 2014 mobile video advertising grew 196 percent to £63.9 million (about $100.4 million) and is now the fastest-growing digital ad format, according to the Internet Advertising Bureau U.K. Digital Adspend in a report conducted by PwC.

“Mobile’s share of the digital ad pie has tripled in 2 years, accounting for a fifth of total spend—rising to nearly a third of display and over half of social media ads,” says Dan Bunyan, manager, PwC. “As 4G becomes more prevalent and phone screens become larger, it will play an even bigger role in driving digital ad spend—particularly video.”

4G on Fast Track

4G services are leading to a rapid increase in demand for mobile video, with subscribers on 4G mobile networks being 1.5 times more likely to watch video than subscribers on 3G networks, according to Citrix.

The report found that 4G subscribers are more likely to watch long-form video content and watch it at a higher resolution. “LTE (4G) clearly drives increased demand for mobile video,” Anna Yong, senior product marketing manager at Citrix, said in an accompanying release. “On average, each request results in longer viewing times than 3G as demand shifts from more short-form content such as that hosted by YouTube, to longer-form content such as that hosted by Netflix.”

However, European 4G network coverage lags behind that of the U.S., where at least 19 percent of the country had coverage compared to just 2 percent in Europe at the start of 2014, according to mobile operator trade body GSMA.

John Giusti, GSMA’s head of policy, blamed this on delays in the release of the 800 MHz band. “There is not yet meaningful take up of 4G in Eastern Europe, and in Western Europe the percentage is only 3 percent compared to 25 percent in the U.S. and 24 percent in Japan,” he says.

There are business impacts. “In Europe live streaming from cameras in the field is just starting up,” says Gustav Emrich, JVC’s European product manager. “There is a demand, but in terms of network coverage and rollout of 4G LTE, Europe is far behind the U.S. Even in Germany if you stray too far from a major urban centre connectivity will fall away.”

Neelie Kroes, the outgoing EU commissioner for digital agenda, made it her mission to urge member states to license their 4G spectrum, facilitate investment in wireless broadband, and extend coverage beyond urban areas. In a keynote to the industry at IBC she said, “It’s time for EU countries to put 4G deployment at the top of their digital to-do list, and support a true digital single market.”

The EU expects 80 percent of the EU population to be covered by LTE by 2018. The GSMA projects that LTE will make up 53 percent of connections in Europe by 2020, and coverage will reach 91 percent of the population. Those projections mean rapid growth, which began in 2014 as operators in most major European territories began rollout, and will really fly in 2015.

By 2020, Ericsson predicts 6.1 billion smartphone subscriptions worldwide. (Source: Ericsson)

Deutsche Telekom, Europe’s largest carrier, is rolling out a 4G network in Germany. Other carriers include Dutch operator KPN, Norway’s Telenor, and Telia Sweden—but it is the U.K. market and in particular Everything Everywhere (EE) that are leading the way.

The joint venture, forged by T-Mobile and Orange (and bought by BT in February 2015), has made the most of its full year jump-start on competitors. In return for yielding a slice of its 1800MHz spectrum in 2012, EE got to use part of its existing 3G bandwidth to launch 4G, and by end of 2014 had 6 million subscribers and over 75 percent national U.K. coverage, with 100 percent on the cards by 2016.

After launching a year later, in August 2013, Vodafone and O2 are aiming for 98 percent coverage by end of 2015. Deloitte expects total 4G subscriber numbers to exceed 10 million by the end of 2014 in the U.K. Regulator Ofcom demands that 4G reach 98 percent of the U.K. population by the end of 2017, but rollout looks ahead of that target.

So much so that U.K. networks are exploring advanced services. After a trial across East London’s Tech City (home to Google and multiple high-tech businesses), EE plans to spread LTE-A, promising speeds up to 300Mbps to other major U.K. cities by early 2015. Vodafone has announced the same, beginning with London, Liverpool, and Birmingham. Vodafone Spain has already rolled out LTE-A in three cities, and Swisscom is preparing to launch LTE-A in 2015. O2 parent company Telefonica has begun testing LTE-A in Germany.

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