Weekly Update

What the World Cup Means to Carriers

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Mobile video has the chance to take a big step forward over the next few weeks as users around the globe keep up with the World Cup action on their phones, so carriers looking to ramp up data revenues in the coming months had better be able to deliver the goods.

The global popularity of the World Cup will likely provide a major boost for mobile TV, which has long struggled to find much of an audience. Indeed, the last World Cup — which was played in 2006, a year before the first iPhone came to market — is generally viewed as one of mobile TV’s many disappointments.

But with the recent traction of multimedia-friendly handsets, this time around, the venerable soccer tournament is already making a big impact on digital media: Akamai, which operates the world’s largest computer network, said opening day resulted in the busiest day ever for bandwidth demand on news sites. That activity is expected to expand to mobile, too, according to Nielsen, which said more than one-fifth of mobile users around the world plan to access World Cup information via their phones, and 23 percent of U.S. consumers will get mobile World Cup content.

Much of that content will come in the form of scores and news updates through mobile applications like this one from Goal.com. But a lot of traffic will be data-intensive video from streaming services offered by ESPN Mobile, which will stream 56 games live on Flo TV, MobiTV, Sprint TV and Verizon Wireless’s V-Cast. Another option includes Slingbox, which provides hardware and software to enable users to watch their home TV broadcasts on their handsets.

As Deloitte noted a couple of weeks ago, streaming video consumes a lot of data, and World Cup action is extremely time-sensitive — which means carriers can expect dramatic spikes in network congestion during particularly popular matches. “There is a high probability that networks could become saturated during midweek day games if individuals do not have television access and, in turn, opt for online viewing,” Deloitte’s Ed Marsden said in a prepared statement. “And, with social media and micro-blogging sites likely to attract plenty of ‘commentary,’ this problem may only be exacerbated.” Indeed, Twitter was already experiencing trouble on the first day of  action.

This increase in data usage presents both an opportunity and a threat for carriers at a crucial time. Network operators are struggling to manage and monetize network congestion, as evidenced by AT&T’s recent move to kill its all-you-can-eat data plans. Other operators are expected to follow suit as 4G networks come online. The end of those unlimited plans will give carriers unlimited opportunities to grow that all-important data revenue: A hardcore soccer fan with a decent phone will surely pay $5 or more to watch his team compete, for instance, as long as the user experience is solid.

As we enter the era of metered billing, then, the World Cup gives carriers a chance to showcase their network strengths and build the foundation for future data revenues — especially when it comes to video. Users who tune in and enjoy high-quality broadcasts will be inclined to spend more to watch other content, which would give mobile TV the push it has long needed.

Carriers, then, should be watching their networks relentlessly to stay ahead of the curve and do all they can to meet demand. Simply put, those who consistently deliver high-quality content with minimal hiccups will encourage future video consumption and will be positioned to leverage lucrative data traffic as we enter the world of 4G services. Those who can’t provide a solid user experience will have missed a great opportunity to score big with consumers. While you’re watching the games in South Africa, keep one eye on the carriers to see how they’re performing.

Question of the week

Will the World Cup give mobile video a boost, and will carriers be able to handle the load?