07 July 2017
| Guy Matthews
Carriers are looking at ways to work more closely with generators of video traffic, from traditional broadcasters to disruptive OTTs. Guy Matthews looks at what can be done to cater more profitably for such customers
It would take more than five million years to watch all the
video content that will cross global IP networks during any
given month of 2021, predicts networking vendor Cisco in its
latest Visual Networking Index. It forecasts that video will
account for 82% of all IP traffic by that year, up from 73% for
Volumes of IP-borne video will jump threefold between now
and 2021, fourfold in the case of internet video traffic. Video
is a dominant factor in any conversation about network
capacity, and something that every carrier must have a plan
Carriers and service providers have had a complex and at
times tricky relationship with the originators and distributors
of the moving image. But it is a necessary relationship for
both parties. Carrying video traffic is an essential part of
offering the ultimate end consumer the seamless omni-channel
experience they crave. And developing a functioning
relationship with a networking partner is an equally vital
priority for both the traditional broadcast-ing industry and
the over-the-top (OTT) video content provider. The problem is
that carriers do not always end up with a return from the
relationship that could be called optimal.
Stephan Schröder, visionary leader in telecoms
wholesale with Deutsche Telekom ICSS, points to market research
findings that illustrate how the balance of power between OTTs
and network operators has been shifting.
"Unarguably, there has been enormous growth in internet peak
traffic," he says. "Globally it’s been rising at
33% per year, according to TeleGeography, even higher than that
on our network where it has been rising at 52%, and much of
that growth is to do with video. We are investing massively
every year throughout the group just to cope with traffic
He quotes figures from market researcher Statista that "show
us that the cumulated annual revenues of the six large OTTs
– Google, Apple, Microsoft, Amazon, Facebook, Netflix
– are growing at a rate of 14% per year, while the
three largest European operators have shrunk their revenue by
2% over the same time frame. There’s food for
The answer, he is certain, is for operators to find creative
ways to work in a more integrated fashion with the video
community, presenting fresh solutions that meet real needs:
"Carriers must become more effective enablers for content
delivery," he warns.
"As carriers we must work to optimise the delivery chain. We
must do this with efficiency but also with visibility and
quality. We must do this in different ways, for example
He says that Deutsche Telekom has been proactive in
exploring new types of service for video customers, such as
providing flow optimisation. "CDNs can have low visibility on a
carrier’s network capacity, causing misallocation
of traffic handover points. The problem increases with the
number of caches deployed in the network. By offering real time
network mapping you are ensuring efficient network use and
He suggests carriers also evaluate, as Deutsche Telekom has
done, predictive pre-positioning and multicast technology, to
help reduce network loads and secure network integrity.
"Network costs are driven by peak utilisation," says
Schröder. "Traffic delivery in off-peak times is the most
efficient use of resources. We’ve been working
with CDNs to help predict user behaviour through profiling. I
should point out that they asked us to help them with this, so
we can’t take the credit for thinking of it."
As well as finding better ways to work with CDNs and OTTs,
carriers also need to extract more profit out of relations with
old school players in the video field. Many conventional
broadcasters are struggling with the changing shape of their
industry, for example with the popularity of on- demand
content, advances in HD and 4K ultra-high deﬁnition TV,
second-screen services and the move to remote production
Colt has for many years been the network partner of
broadcast brands such as Canal+, Eurosport, France24,
Globelynx, Eurovision and TF1. Tim Passingham, VP wholesale at
Colt, explains that the operator supports these customers both
directly and indirectly. "The direct side is part of our
enterprise business, and indirectly we support many
broadcasters through our wholesale business," he says. "We
support the OTTs as well. Obviously broadcast has changed
massively since the days it was dominated by traditional
players like the BBC and Canal+, and is now going in a Google
and Netflix direction. We’ve seen our business
shift too from traditional broadcasters to doing a lot more
work with the web giants."
Passingham says Colt has provided backing for broadcasters
playing catch-up and building their own on-demand services.
"It’s a big part of our business and one we see
growing significantly as video grows significantly," he
"Video is the main growth engine of traffic on the
The challenge for the likes of Colt, he says, is that as
volumes of video traffic go up, the price for carrying it goes
down. "Carriers can end up running to stand still.
That’s why you’ve got to invest in
new technology and work smarter, which we’re
trying to do. We’re increasing bandwidth in our
core network. That’s vital, given the sheer volume
of video being consumed. As well as that quantity angle
you’ve got a quality angle too. As consumers
we’re watching things in much higher
A related area that Colt has invested in is supporting
beleaguered mobile operators by backhauling their growing video
"Half of all YouTube videos are now generated on a mobile
device and transmitted via the mobile network," points out
Passingham. "Traditional backhaul arrangements in mobile towers
is struggling to keep up with this. We work with these mobile
operators to help them with these greater volumes. In a 5G
world, fibre backhaul will be even more important.
There’s gaming too, which has become very similar
to video in terms of quality. There’s not much
between a video game and a feature film these days."
An increasingly obvious characteristic of the movement of
video traffic is that it is truly global, meaning that carriers
that can facilitate the passage of this traffic from anywhere
to anywhere will be in demand.
Brian Morris is vice president and general manager of media
and entertainment with Tata Communications, a carrier with a
virtually unrivalled global reach and a long-standing innovator
in video networking as well.
"We enable seamless global transport and management of your
content as a cloud-based service," he says. "It’s
not just about the transport, as it was in the past. You can
acquire content anywhere in the world you want, manage it and
redistribute it." He claims Tata offers end-to-end solutions
for content creators, owners and distributors, and employs a
large team of team of video-centric experts to serve
"We also have people who understand IP and networks, and
that marriage means we really understand how to manage, move
and process video. We’ve built out media hubs
across the globe. We touch every part of the planet with
high-reliability video circuits. Others have a slice of what we
offer but don’t compete globally."
Others have a more regionally focused video offer, such as
Telstra which has made good business out of moving video
traffic around Asia and between Asia and the west coast of the
"We’ve got a division dedicated to broadcast
and a separate one dedicated to OTT," says Paul Abfalter,
director of OTT and emerging markets with Telstra. "Depending
on where they are in the food chain, we’ll look
after them at the network and infrastructure layer. We have a
good relationships there with all the major CDNs and a lot of
the OTT and video providers. Going up the stack a bit, we have
products that look after the video distribution side."
Abfalter says Telstra is the major partner for many OTTs for
Asia and for trans-Pacific, as well as cloud companies looking
for a dense pan-Asian network. He explains that the nature of
this OTT demand means that Telstra has had to learn to
provision network solutions in a much shorter time frame than
it has typically been used to.
"We’ve seen quite a few players in video and
content that have underestimated what they needed a bit, so
we’ve found ourselves having to develop a solution
for them in double quick time," he says.
"We built an intra-Asian CDN for a major US OTT after it
took off for them in Asia in ways they weren’t
expecting, so we had to scramble to build that in record time
in late 2016."
A more predictable relationship is to be had, he says, with
organisers of big sporting events. "We’re one of
the major suppliers for the Olympics, for example," he points
out. "That’s the sort of thing we can plan for a
bit more up front. OTTs can’t necessarily plan
much in advance, so our sales cycle is shortest there, two
weeks in one case.
"We have the headroom for that because of the extent of the
capacity we have in Asia, particularly in the hot triangle of
Singapore, Hong Kong and Japan where most of the demand is.
We’ve got connectivity into small countries as
He says Telstra is working closely with OTTs at the
infrastructure level, in the form of helping them build data
centres and co-fund submarine cable systems.
"Quite a few are now building their own cables and looking
for telecoms partners to help," he says.
"We’re Google’s partner in a new
cable build between Singapore and Perth. We’re
also working with smaller up and coming OTTs, perhaps reselling
CDN services to them. We enhanced what we can offer in this
market a lot when we bought Pacnet two years ago."
It is evident that carriers now see video content and OTT
players more as an opportunity than a threat.