Sandvine, (TSX: SVC) (AIM: SAND) a leading provider of intelligent broadband network solutions for fixed and mobile operators, today announced the release of their 10th Global Internet Phenomena Report: Fall 2011, including new Internet trends and extensive analysis of the implications for communications service providers.
Top trends noted and discussed in detail for service providers include: increased Netflix and over-the-top services adoption, the market penetration of revenue-replacement applications, the overall increase in mobile marketplaces, and the impact of Internet-ready consumer electronics devices.
Major findings from the report include:
- Within fixed networks in the United States, Real-Time Entertainment applications are the primary drivers of network capacity requirements, accounting for 60% of peak downstream traffic, up from 50% in 2010. Rate-adaptive video represents the majority of video bandwidth, with Netflix alone representing 32.7% of peak downstream traffic, a relative increase of more than 10% since spring.
- We have entered the "Post-PC Era", as the majority of Real-Time Entertainment traffic (55%, by volume) is destined for game consoles, set-top boxes, smart TVs, and mobile devices being used in the home, with only 45% actually going to desktop and laptop computers over North American fixed networks.
- Video in mobile networks continues to gain momentum. In North America, Real-Time Entertainment is now 32.6% of peak downstream traffic, while in Asia Pacific it is 41.8%. The largest contributor is YouTube, and other applications like peercasting PPStream and Netflix are making inroads.
- Mobile Marketplace traffic accounts for 9.4% of peak downstream usage in APAC and 5.8% in North America, led in both cases by Apple and Google. Applications like Skype and WhatsApp Messenger, that replace the traditional revenue sources of voice and texting, are being installed by growing numbers of subscribers.
- In North America on fixed networks, mean usage remained generally flat at the high end (22.7 GB from 23.0 GB reported in May) and median usage dropped to 5.8 GB from 7.0 GB. This shows that while subscribers aren't using more traffic overall the usage gap between heavy and light users is broadening and that more data is being used during the small peak period window. In Asia-Pacific fixed networks, median monthly usage is 17.7 GB, which is the largest we have observed.
"The fact that more video traffic is going to devices other than a PC should be a wake-up call that counting bytes is no longer sufficient for network planning. Communications Service Providers need to have detailed business intelligence on not only the devices being used but also the quality and length of the videos being watched so they can engineer for a high subscriber quality of experience and not simply adding capacity through continuous capital investment," said Dave Caputo, CEO, Sandvine.
"Mobile operators are facing a reality of network costs that are increasing much faster than revenue - to bridge this gap, forward-thinking operators are also using Sandvine's Usage Management product to launch premium services that guarantee unlimited usage of the applications that are most popular with subscribers. These packages offer a win-win arrangement: subscribers can confidently use their favorite applications, with the comfort of price certainty, while operators can cover the costs associated with delivering those services to the end user," said Dave Caputo. "In addition, overall monthly consumption is more concentrated during the evening's peak hours, so service providers may also consider offering service plans that shift usage to off-peak hours."
Sandvine's publically-available Global Internet Phenomena reports are made available through Sandvine's Network Analytics product, including the newly-launched Real-Time Entertainment Dashboard, which provides granular insight into streaming audio and video traffic. Ultimately, service providers invest in their networks to deliver a valued service to their end users, and the video QoE metric lets network operators see the return on their capacity planning and congestion management investments.
ABOUT SANDVINE'S REPORTS
Sandvine's Global Internet Phenomena reports are an ongoing series of Internet phenomena and traffic analysis studies that have been published since 2002. The information in the Fall 2011 study is based on voluntary and completely anonymous data, aggregated from fixed and mobile service provider networks spanning the globe and only the top significant trends spotted get included in the bi-annual reports. Sandvine's global view, which includes over 200 service provider customers spanning more than 85 countries, makes the report the most comprehensive of its kind in the industry.