While the US and Asia stream ahead in the race for 5G, European telcos are unsurprisingly sceptical over investments; could video be use case which operators are searching for to justify investments in the technology?
It seems strange to be talking about hardcore justification in Asia. While US operators are moving forward aggressively in 5G due to competition, the mood in Asia seems to be somewhat more optimistic. There appears to be a sense of ‘build it and they will come’ for 5G, investing in the potential of the technology, not the immediate gains. That said, few would complain about a silver bullet to solve all the uneasy questions surrounding investments.
This is what David Lynne, CEO of Viacom International Media Networks, is preaching. For those who are nervous about the prospect of reaping the rewards of the connected economy, video could be the validation needed.
“For this to work, mobile has to establish itself as a platform for TV,” said Lynne during his MWC Shanghai keynote session. “This can be a selling point for 5G.
“Many are sceptical about the use case of 5G, but it will allow mobile to compete with traditional platforms for pay TV content. Increased reliability and reduces latency to make the experience the same. Video will surely play a critical part of selling the 5G benefits to customers.”
For years the price of data has been tumbling making the telco business a tricky one to thrive in. Parallel to the decreasing price per GB, consumers are becoming more demanding, expectant of bigger bundles or even unlimited tariffs. With connectivity ARPU decreasing, and network demand increasing, the economics are not favourable. One of the theories of 5G is price stabilisation; with decreased latency, alongside increased speeds and capacity, operators might just be able to halt the trend of shrinking ARPU, and perhaps even increase it.
This is where some of the telcos are sceptical; it all seems too good to be true, but Lynne is convinced a thorough mobile video platform could offer genuine competition to the traditional means of consuming content on smart TVs and even PCs or laptops.
“I’d like to focus on one number; 78,” said Lynne. “This is the number which Cisco predicts will be the percentage of video internet traffic by 2021.”
As it stands, the majority of this content is in short-form, or VOD services such as YouTube. Though Viacom is currently working with a number of telcos who are Viacom’s content into packages to increase engagement and potentially revenues.
“It is an emerging business model though,” said Lynne. “Mobile providers know about experience and delivering, but not much about keeping the customer entertained. Some are bundling live video into billing. At its most effective, these can drive NPS (Net Promoter Score) and revenues.”
Examples of this include Telefonica’s Movistar in Latin America, where it offers both linear and on-demand content as a premium service, or AT&T which is bundling Paramount content into unlimited data packages. Some are even using the MTV and Comedy Central brands to engage younger audiences with customer content platforms. These are all examples of taking video to the next step on mobile. It isn’t just about short-lived experiences, but a genuine long-form video proposition.
Video is a trend which no-longer needs to be justified to the industry; it is growing faster and faster every single year. While this is certainly a strain on the network, there is an opportunity for the telcos to create relevance beyond being a connectivity utility in the digital era. A genuine and comprehensive video platform can be a challenger to traditional video platforms, justifying the 5G expense.
Mobile doesn’t just have to be for cat videos.