The UK’s largest cellco, EE, has been moving towards a quad play offering, which will be one attraction for its proposed acquirer, incumbent telco BT. The mobile player has announced that it plans to extend its current EE TV multiscreen service, which runs on WiFi, to its cellular network.
EE TV is designed to increase the operator’s share of household media and communications spend, by being offered as a free add-on to fixed broadband services. Launched last October, it is based around a set-top box which can be controlled by a smartphone app and can support content streaming to up to four devices. The multiscreen experience is currently limited to gadgets connected to the same WiFi network as the set-top box, but that will become significantly more flexible once the capability expands out over EE’s mobile network. That would mark a fully converged EE TV service, which would presumably eat up the current mobile TV offering, which is a standalone application available as an add-on to cellular tariffs.
Matt Stagg, senior manager of network strategy, revealed the plan to TotalTelecom and company confirmed the target was to extend the service to cellular later this year. The comments were made at an event held by Ericsson to showcase its broadcast and video capabilities. The Swedish firm said it believes that, by 2020, 50% of video content will be on-demand rather than linear, and that half of that video will be consumed on mobile devices. “Finally we see convergence,” said Thorsten Sauer, head of broadcast and media at the vendor. His comment was echoed by Ed Vaizey, minister for the digital economy, who remarked: “We’re on the cusp of convergence.”
Video consumption on smartphones has jumped 44% since 2012, while 26% of consumers are watching the same content on various screens according to their location, Ericsson added.
Of course, there is considerable debate about whether most of this on-the-move video consumption will take place over cellular or WiFi networks. There are different schools of thought, with some arguing that WiFi will dominate because it is cheaper both for the operator and consumer, it has high data rates, and most video is watched while the user is stationary, so full mobility will be unnecessary. The counter-argument is that LTE may provide greater quality of service – essential for a good video experience – and that streaming to cars and trains will make high mobility increasingly important.
Most operators and customers will use a combination of the two, depending on scenario and cost factors. Some carriers have been very active in offloading video traffic to WiFi to preserve the quality of experience on their cellular networks and limit the additional investment they need to make in capacity. Others, including EE, have argued that, as LTE’s capacity and efficiency increases, there will be less need for WiFi – especially if LTE creeps into unlicensed spectrum, improving its capacity and cost effectiveness by harnessing 5GHz for supplemental downlink, as envisaged with the LTE-LAA technology.
However, WiFi remains essential to many mobile consumers. UK infrastructure operator Arqiva recently published the results of a report it commissioned into the relationship between public WiFi and 4G, which found that two-thirds of UK LTE subscribers would consider moving to a different network provider if public WiFi access was offered as part of the package. In a cheering result for MNOs, which are under pressure from cablecos with aggressive WiFi roll-outs and WiFi-first services, 59% of the consumers said mobile carriers were the most obvious provider of public WiFi.
Tom Rebbeck, research director at Analysys Mason, which conducted the research, said in a statement: “The research shows that consumers see public WiFi networks as a complement to cellular connectivity. The move to 4G doesn’t seem to reduce the demand for public WiFi access – it may even reinforce the demand for high speed networks of all types.”
Ericsson is clearly on the side of LTE as the primary carrier, and a prime mover behind LTE-LAA. “3G is a communications network that does some data. 4G is a data network that also supports communications,” said Stagg, telling mobile operators that “like it or not”, they were building video distribution networks as soon as they embarked on LTE, as that would be such an important use case.
As well as the potential of LAA, carriers are also looking to improve the efficiency of their 4G networks as video systems with technologies like LTE Broadcast. EE has trialled this to support video services in live sporting events.
The biggest challenge will be for mobile operators to make their video offerings affordable in a country where there is plentiful free TV, not to mention YouTube, while also generating sufficient additional revenue (and other benefits such as churn reduction) to justify the investment in capacity.
Also in the UK, the government announced, in its annual Budget plan, that £600m had been earmarked for clearing spectrum bands for mobile broadband, and a further £140m for developing the internet of things.
Chancellor of the Exchequer George Osborne pledged investment in improving terrestrial mobile networks, investing in satellite for remote areas, and in WiFi for public libraries (those that are left after years of cutbacks). “This is the next stage of the information revolution, connecting up everything from urban transport to medical devices, to household appliances,” he said. The government also set a target of providing every home with at least 100Mbps broadband, should the dominant Conservative party be re-elected in May.
And UK regulator Ofcom has initiated its latest review of the country’s digital communications market, and some service providers are taking the opportunity to lobby for stricter curbs on BT ahead of its EE acquisition. Broadband provider TalkTalk said the review should be the catalyst to force BT to spin off its Openreach infrastructure and wholesale division, with CEO Dido Harding arguing that current separation does not go far enough to protect competition.
Ofcom announced that it would review competition, investment, innovation and the availability of products in mobile, broadband and fixed-line services. It will focus on three key areas – ensuring the private sector is incentivised to invest in the market; maintaining competition while removing any blockages to market development; and examining the potential to deregulate some parts of the market.