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According to a new analysis by Openwave Mobility, today over 820 million people across the world watch YouTube and Netflix on mobile devices.
The analysis said that 38 percent of all mobile video traffic globally is now High Definition (HD) - far beyond what mobile operators had predicted. While HD video was only 5.7 percent four years ago, it is now expected to reach at least 50 percent of video traffic by the end of 2018, reflecting the popularity of Over The Top (OTT) streaming video services such as YouTube and Netflix on mobile devices.
John Giere, CEO of Openwave Mobility said: "OTT have launched a land grab. In 3 years OTTs wiped out voice revenues. In 2.5 years they wiped out messaging revenues. Is mobile data next? You bet. Along with encryption obscuring mobile networks, operators have to grapple with the unstoppable appetite for HD video content from OTT players."
The report pointed out that three quarters (75 percent) of all mobile traffic is now encrypted and this is stifling the mobile operator's ability to maintain subscriber Quality of Experience (QoE). This is because encryption protocols prevent operators from being able to profile or optimize data using conventional traffic management tools.
The research also revealed that UDP-based encryption has also grown faster than predicted. In particular, the onslaught of Google's QUIC protocol threatens to outpace anything the industry has seen so far. QUIC has grown at an astonishing CAGR of 284 percent - in just two years since its debut. Based on observations, Openwave Mobility predicts that by November 2018, approximately 90 percent of all mobile internet traffic will be encrypted.
"As users get accustomed to HD quality at home, they expect the same QofE on mobile. Whether binge watching Stranger Things 2 or ogling over cute pets, subscribers find the mobile video more important than voice calls. That's why QoE is a deal-breaker. For example, research shows that people only tolerate 6 seconds of video buffering before switching off in frustration. Facing an onslaught from OTT encrypted traffic, the challenge for operators is - how can you manage what you can't see," John added.
Openwave Mobility's research is based on analysis of data aggregated from our live deployments in more than 30 mobile operators around the globe from 2013 to 2017.