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An interesting tidbit came out of Verizon(s vz) CEO Lowell McAdam’s speech at the National Association of Broadcasters conference on Tuesday: Half of the traffic on Verizon’s mobile networks is now video, FierceWireless reported, and by 2017 Verizon expects that number to grow to two-thirds.
At first glance, it would appear that Verizon just is keeping with the global average. Cisco Systems’ Visual Networking Index(s csco) pegs video at 51 percent of all traffic bound for mobile devices. But Cisco is counting on all traffic to mobile smartphones and tablets whether they’re connected to cellular or Wi-Fi networks. According to Cisco’s calculations one third of “mobile” traffic never hits the cell tower, traversing Wi-Fi networks instead.
Meanwhile, McAdam is claiming that half the load on its mobile airwaves is now video, which is frankly quite a lot. McAdam had a good explanation for why: LTE. As its customers move to LTE’s faster pipe, the video experience improves — buffering and choppiness drop away — which in turn encourages more video watching. In fact, a better connection seems to naturally begets more data usage in general. Only 23 percent of Verizon’s subscribers have an LTE device, but they account for well over 50 percent of Verizon’s network traffic.
I doubt Verizon is saddened by this development. As more customers start consuming more video they’ll have to upgrade (the ones that aren’t still clinging to their grandfathered unlimited plans, at least) to bigger data plans to handle that load.
But Verizon does face a perplexing problem. It’s doubtful many customers are going to start paying upwards of $100 a month for the 10 GB-plus data plans necessary to support hard-core video consumption. So while it wants to encourage its customers to consume more video, there are plenty of economic incentives convincing mobile subscribers to do the opposite.
That’s probably why we’ve been hearing McAdam talk up new mobile video technologies like LTE-broadcast lately. By streaming content to multiple users simultaneously – either for immediate or later consumption – Verizon can deliver more video at less cost. Theoretically, at least, it can pass those sizable savings on to its customers, thus encouraging mobile video’s growth.