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Winter 2019
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The State of Mobile Video 2019
Mobile viewing is already on the rise even before mobile operators prepare for 5G to skyrocket data demand. But monetisation remains up in the air.

There’s a perfect storm brewing. Mobile video is growing at a phenomenal rate putting current networks under strain, at the same time as 5G looks as if it’ll ride to the rescue. Subscribers may love it, but monetizing 5G is easier said than done and with more video traversing mobile networks than ever before, quality of experience (QoE) is becoming a major headache.

"That’s because when subscribers experience poor quality when streaming video our research found that consumers blame the operator, not the OTT [over-the-top]," says Indranil Chatterjee, SVP of products, sales, and marketing at mobile traffic management firm Openwave Mobility, in an Openwave blog post. "And it is only a matter of time before they churn."

Numerous forecasts point toward the rapid growth of video, often in tandem with breathless predictions for the rollout of next-generation wireless broadband. Ericsson’s November 2018 Mobility Report, for example, predicts video traffic to grow 35% annually through 2024—increasing from 27 exabytes (EB) per month in 2018 to 136EB in 2024. Put another way, video’s share of the global mobile traffic will rise to 74% from 60% today "as 5G establishes itself as the fastest generation of cellular technology to be rolled out on a global scale," the reports states.

According to findings from Ofcom’s Communications Market Report in August, some 95% of UK 16to 24-year-olds own a smartphone. The average amount of time spent online on a smartphone is 2 hours, 23 minutes a day. This rises to 3 hours, 26 minutes among 18–24s.

Ooyala’s Q2 2018 Video Index shows video plays on mobile devices were up more than 13% from a year ago, the biggest increase for smartphone plays in five quarters. It was also the first quarter ever to see smartphones top 50% of all plays. The previous best share for smartphones was just 47.5%.

"As solid as these mobile numbers are, they’re just the precursor to higher mobile share coming in the next several quarters as content providers—especially sports teams and leagues—begin to cater to an audience that is slowly, but assuredly, moving away from traditional video delivery," according to principal analyst Jim O’Neill.

Ready for the 5G Rush

In western Europe, nearly a third of citizens will be on a 5G contract by 2024. Ericsson reports: "It has become apparent that 5G anticipation is much greater than that experienced in the lead-up to LTE."

The adoption of 5G will lead to the continent consuming the second-highest amount of data via user handsets. Europeans will use 32GB per month in 2024, compared to 6.1GB today.

"The increase in video data traffic per smartphone user has three main drivers: increased viewing time; more video content embedded in news media and social networking; and an evolution to higher resolutions and more demanding formats," according to Ericsson’s report.

While most mobile video today is streamed as low as 360p, higher-definition streaming is already on the rise. "The average resolution of a YouTube video in some LTE networks is already up to 720p," states Ericsson.

Openwave tracks the same trend. While most operators it suggests experienced growth in mobile video from 2010 to 2015 as a result of increased video viewing, in the last 3 years, growth has been driven more by moves to higher-bandwidth content (from Netflix, YouTube, etc).

"As operators prepare for the dawn of 5G, there is one sure-fire certainty," says Chatterjee. "HD content (including 4K and soon 8K content) and therefore mobile video will soar."

Some operators yet to fully monetise 4G are already looking at 5G as "an enterprise vertical enabler" according to Dimitris Mavrakis, research director at ABI Research, quoted in the Openwave blog post. "5G will initially be used to improve the consumer user experience—and surprise surprise—mobile video will spearhead this strategy," he says.

In 2016, mobile video represented 48% of traffic, and ABI Research predicts that 5G’s mobile video growth will accelerate in 2022. By 2025, video will reach 78% of traffic, a whopping 40% of which will be 4K video.

By Q1 2018, there were 465 million unique mobile subscribers in Europe, equivalent to more than 85% of the population, with 4G having now established itself as Europe’s leading mobile technology, according to the most up-to-date figures of the Global System for Mobile Communications (GSMA), presented in it’s "The Mobile Economy: Europe 2018" report (go2sm.com/ gsma18). It expects 4G adoption to peak in 2023 before declining as consumers upgrade to 5G.

In fact, according to this report, the mobile operators’ body is predicting that by the middle of the next decade, there will be 203 million 5G connections in Europe, representing 29% of total connections. Significant capex by mobile operators in the post-2020 period will expand 5G network coverage to three-quarters of the region’s population by 2025.

Another priority for mobile network operators remains identifying the commercial returns for the fifth-generation network.

The GSMA, for one, predicts that Europe’s mobile economy will account for €720 billion, or more than 4% of the region’s entire GDP, in just 3 years’ time.

"5G networks in Europe are expected to provide coverage to almost three-quarters of the region’s population by 2025 and Europe is set to become the world’s third-largest 5G market behind Asia Pacific and North America by this point," says Mats Granryd, GSMA director general.

5G Commercial Rollout

Although there is still headroom for 4G growth in many markets, the first 5G launches by European mobile operators are already happening. In the UK, EE is leading the charge. It demoed a number of 5G live trials at the end of 2018, including switching on 10 trial sites across East London by end of December aimed at business and consumers.

The operator, which has the advantage of a fixed line operator in its parent BT Group, also made the first live broadcast using remote production over 5G 10Gbps backhaul for the soccer final EE Wembley Cup in November, delivered from Wembley Stadium (North London) to BT Sport’s base in East London.