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Virality - A high price for Mobile Operators


I'll bet that many of you mis-read that title as "Virility".  This blog has nothing to do with the blue pill, or any of the spam messages that probably bog down your email, even if your name is undeniably female.

This is about Virality - which if Webster or Britannica were still around, they would have defined as "The attribute or quality of an idea (or video) to replicate itself through manipulation of a human beings' brain.  Modern examples "Viral video", conspiracy theories, extreme ideology".

Virality is all around us. The medium that you are reading right now, a "blog" didn't exist until just a few years ago, and now they are everywhere - a viral idea (evolutionary biologist Richard Dawkins calls them "memes", self replicating ideas subject to evolutionary pressures).  Other examples of virality fill the peta-bytes of storage we know as "YouTube" (TM).

Those are the ones that concern us in the mobile community the most.  Video is a rich medium. a euphamism for "fat and expensive" - fat because it take a lot of bandwidth to transmit, expensive because it consumes an unfair amount of spectrum, processing and transport (especially backhaul).  It's also a moocher, mostly looking for a free ride.  Subscribers, especially those with HD screens such as smartphones and tablets consume an ever growing amount of video, for which they pay little or nothing.  Mobile service providers, who benefitted in the last two decades from the viral concept of "Mobility", are now suffering from a different Virality - "mobile video".

Today, about 50% of all mobile data traffic is video.  Of that, the vast majority are viral videos from sources such as YouTube and Google, with paid-for sites rapidly growing.  The trouble is that the payments for subscriptions of advertising go the content providers, who get a free ride over the mobile carriers network.  Mobile operators sell data plans, but they are not scalable for the new world of all-you-can-eat-viral-video.

There are multiple technologies available offering features such as operator storage (caching), re-encoding (trancoding), adapatation to available bandwidth (transrating), and improved delivery (TCP Optimization).  Cisco is of course one of them (download "at-a-glance" PDF here).  We ran several business models of typical mobile service providers, and we found that if a moderately large operator with 17 million subscribers were to apply all of the technologies above, their cost savings (assuming that they used the Cisco Mobile Videoscape solution) just from optimization and managing over-the-top video virality could exceed $800m over 5 years, with another $250m in potential revenue.

$1 Billion (and change).  Now that's a Virality I can get behind.......

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