1. Telcos get a new cash cow in the video revolution

Telcos get a new cash cow in the video revolution

Revenues from video, which is 60% of all data consumed, have doubled in past couple of years.

By: | New Delhi | Updated: March 29, 2015 1:15 AM

While television changed India more than two decades back, video over mobiles and tablets is the biggest revolution that the Indian telecom industry is going through. Data, which is the biggest focus area for telecom operators for the past three years, has started seeing huge uptake in video consumption, dominating 60% of overall data consumed by telcos.

“It is already the most dominating factor. Data is all about video. This will only go one way,” said Nickhil Jakatdar, CEO and founder of Vuclip, which is India’s largest video aggregation platform and was responsible for the launch of Bharti Airtel’s

R1 video store.

Airtel launched its video store offering short clips for R1, but now offers over 30,000 clips, including larger videos of serials and songs.

Last year it launched its music streaming app, Wink, and plans to follow it up with a similar app for video streaming in the next six months, said a source. The company declined to comment on this development.

Since the video store was started in June 2013, data revenue as a percentage of overall mobile revenue has doubled to 16.2%, and average revenue per user for data has gone up to R170 from R128.

It’s not only Airtel, all operators are seeing similar growth fueled by high video consumption. For Vodafone, video has crossed 50% of data consumption, both in terms of volume and value.

“This is the fastest growing segment. Last year it was less than 40%. Every operator will be happy for video growth,” said a Vodafone official. None of the operators officially announce how much video contributes to their overall revenue.

The Vodafone official also said there are over 40,000 music videos in the company’s music store that drive traffic. Last year, Vodafone had partnered with IPL to create what was called Vodafone Sports to watch cricket matches on mobile phones, with a separate recharge pack for this.

Idea Cellular, which is the fastest growing telecom operator in India, and gets 15.7% of its revenue from data, has launched Idea mobile TV, which allows users to watch their favourite programmes across 100 channels over mobile phones. Five quarters back, Idea’s data revenue was just 9.5%. “Monetising plan for video is under wraps. But because of high use of video, data consumption goes up. We try and introduce them to video,” said Sashi Shankar, CMO, Idea Cellular.

Even network providers like Ericsson and NSN are feeling the pressure to help operators deliver better video experience. With limited spectrum available, equipment makers are deploying new compression technology to deliver video. Also, optimisation technologies are put in so that the video adapts to the different screen sizes once delivered. “You need to upgrade some equipment and modernise the network to make it more efficient so that you can have more data traffic on the network,” said Nishant Batra, VP (engagement practice), Ericsson India.

However, it is too early for movie streaming services like Netflix to come to India, though there are some video services like IBM’s Spuul that offer streaming video. These require higher bandwidth.

Another segment growing fast is video calls. Until last year, most operators introduced special packs for Facebook and WhatsApp, but now have started working on video packs.

Globally, video dominates almost 70% of data consumption and growing. For India, it is just the beginning.

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