The Future of Telco Content Delivery Networks

With the emergence and growing popularity of online streaming video, broadband providers have invested a large amount of capital to meet the demand and retain subscribers by delivering a positive experience. As a result, telecommunications service providers (TSP) have begun to roll out their own content delivery networks. This significantly lessens the demands placed on network backbones while reducing infrastructure investments.

Accommodating the Demand

Online video is expected to quadruple by 2013 therefore service providers are in the process of upgrading to accommodate this demand. Unfortunately subscriber revenue will not be enough to offset the investment levels in order to expand the bandwidth quickly. However, providers are developing strategies to take advantage of their strengths such as the ownership of their network infrastructure and direct relationship with users.

Online Video Delivery

One such area where their strength is being leveraged is online video delivery. Factors such as improved video quality and a lower cost structure give telco’s a natural competitive advantage over commercial CDN’s.

Contributions to the Growth of CDN’s

The primary contributors to the growth of telco CDN’s include the cost revenue squeeze, deregulation, competitive access, time and place shifting, explosion of mobile phones and voice-over-IP. These are major segments in which TSP’s must adapt their strategies and technology to manage.

Changing the way Users View Content

For telco CDN’s to be successful in the future there are several factors. First, service providers must optimize the quality of service into most households. This idea transforms the way in which users view broadcast content. Viewers must no longer be bound by the traditional television. Instead they should be given the freedom to view what they want, when they want and where they want from many different devices.

Currently there has been a strong push for additional on-demand services. Many telecommunications providers allow viewers to watch their favorite shows from their smartphone, tablet and other devices. Also, services like Netflix stream video through game consoles.

However, for this idea to grow and be successful, providers must deliver content of the highest quality. Since many viewers are now accustomed to Hi-Definition (HD) programming, nothing short of that is acceptable. Low resolution is acceptable for short clips at a desktop but not from audiences replacing their cable and satellite televisions with the Internet. This has been and will continue to be a major challenge for content providers.

High Quality of Service Level

Second, telco CDN’s must focus on maintaining a high Quality of Service (QoS) and eliminate all service irregularities that could compromise the viewer experience. This requires the ability to isolate and correct all issues at the lowest level. Providers must be quick to answer critical questions which all relate to finding the source of the irregularity.

A failure to do so could result in squandering the competitive advantage of a service provider. The end result could be an inferior QoS than off-network competition. However, there are analytics and reporting tools that allows providers to drill down several dimensions at the same time to find the defective server.

Optimizing the Network

Third, telco CDN’s must continually maintain their cost advantage. Since most telco CDN’s own their network, they inherently have a built-in cost advantage over traditional CDN’s. To maintain this advantage, service providers must optimize their network efficiency while emphasizing capacity planning.

To effectively plan and manage capacity, a considerable understanding of traffic by location, media format and other demographics is required. Also, for more complicated requirements, the number of servers to deploy, where to locate them and how much capacity to allocate are also critical to proper management.

Contribute to Customer Success

Finally, telco CDN’s must contribute to the success of the customers using their network. This includes assisting content owners with the navigation of new technologies with regards to Internet video. Service providers must give them the tools they need to optimize their content portfolios and answer the most critical questions.

The future of telco CDN’s appears to be bright if the proper strategies are implemented. With an explosion of demand for streaming video content and the technology to support it, telco CDN’s offer many advantages over traditional CDN’s and should be able to maintain a competitive advantage.

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