Broadband Demand Changing? By Gary Kim

Service provider network planning might be at something of a crossroads, if new data from Sandvine continues to be seen. Among the bigger potential changes is an apparent levelling of growth in consumer bandwidth demand on fixed networks, with the new problem being the peak evening hours, not overall bandwidth as such.
The flatter consumption profile does not necessarily mean that consumer demand for higher speeds is necessarily satiated. But it probably does suggest that existing application profiles are relatively settled. People have discovered what they want to do, and have settled into a pattern in terms of how much time is allocated to such apps.
And there are some other possible implications. Since much of the growth of demand is real-time entertainment with variable rate settings, adding more capacity does not necessarily help access providers deliver “more” bandwidth, as the new capacity just gets absorbed by current users and applications in the form of “higher-quality” video. The Sandvine traffic study shows that subscriber usage is becoming increasingly concentrated in a couple of hours in the evening. The fixed network’s peak time has condensed even more than it has been in the past.
While aggregate network traffic was within five percent of its peak value for a duration of 2.5 hours just six months ago, September 2011 saw a peak duration of only two hours. So the peak hours are more concentrated, while overall demand relatively constant. Within North American fixed networks, real-time entertainment applications are the primary drivers of network capacity requirements, accounting for 60 percent of peak downstream traffic, up from 50 percent in 2010, according to Sandvine.
At the same time, per-subscriber usage remained generally flat overall suggesting that subscribers are concentrating the same amount of activity within an increasingly narrow slice of time.
“If this levelling-off of monthly consumption continues, then network operators might be on the cusp of a dramatic shift in how networks are engineered,” says Sandvine. “In a world in which per-subscriber usage is relatively flat from month-to-month, investing to deliver increasing bandwidth no longer makes sense; rather, networks might soon be engineered to deliver a constant quality of experience.
The assumption of flat usage is susceptible to unexpected changes in end-user behavior, so few executives are likely to declare that the need for faster networks or more capacity is ended.
Still, the apparent flattening of demand is a significant development.
It appears that since video is driving much of the demand, that rate-adaptive video delivery is starting to have an impact on consumption. Rate-adaptive video represents the majority of video bandwidth, with Netflix alone representing 32.7 percent of peak downstream traffic, a relative increase of more than 10 percent since spring 2011, says Sandvine.
This fact is of particular importance to network operators, since it means that most video traffic adapts to network congestion by shifting to lower bit rates and quality, which both affects the subscriber quality of experience and reduces network demand and congestion. That also has network engineering implications. When capacity is increased, adaptive video apps might simply shift to a higher fidelity level, consuming the new capacity as rapidly as it can be supplied.
Mobile operators might face other tough challenges, but not necessarily because of bandwidth demand. As users shift from carrier-provided messaging (short message service or “text messaging”) to over-the-top messaging, “the stability of the service provider business model” is at risk.
Revenue per bit is the issue. As users shift to over-the-top messaging, they use less SMS. That leads to an average revenue per delivered byte decline, as SMS bytes, estimated to be generally $30,000 per GByte, are being replaced by over-the-top bytes that deliver a revenue on the order of $10 per GByte.
The other growing uncertainty is how much the spread of tablets and e-readers might affect bandwidth trends. An Oracle’s study surveying more than 3,000 mobile phone users around the world suggests that 16 percent of mobile customers have purchased a tablet computer and another 41 percent plan to purchase one in the next 12 months. Oracle mobile data study
As more consumers buy and use smart phones and tablet devices, demand for mobile bandwidth services is going to climb. The issue is how much demand will be created.
Today, smart phones are typically offered with 2-5 Gbyte plans, which for now provides sufficient “headroom” for most tablet users. Tablets used like smart phones. At this point, tablets are not causing fundamental changes in mobile bandwidth consumption patterns, but few observers would likely bet on that pattern continuing for too long.
Accedian Networks ranks 1st on the Deloitte’s 2011 Technology Fast 50™ in Canada, and 2nd on the Technology Fast 500™ in North America

Awards received were based on Accedian’s phenomenal revenue growth of 50,136% over the past five years. Accedian was also singled out for its leadership in the Ethernet mobile backhaul industry with Deloitte’s Telecom Leadership Award. “As one of the fastest growing tech companies in North America, Accedian has demonstrated that its technological innovation and entrepreneurship have indeed resulted in the company’s hyper growth. Deloitte congratulates Accedian for this significant achievement,” said Mark Jensen, managing partner, technology and venture capital services, Deloitte & Touche LLP. Read Press Release
Patrick Ostiguy Named ‘Entrepreneur of the Year’ by Ernst & Young

Accedian President and CEO is honoured with Ernst & Young’s Quebec Entrepreneur Of The Year in the Technology Solutions category. “Patrick Ostiguy exemplifies the kind of vision and innovation required to take a good idea, and build it into a great business,” said François Dufresne, Partner and Québec Director of Entrepreneur Of The Year. “Today, Accedian Networks designs and manufactures telecommunications equipment solutions that help companies deliver effective results. We’re proud to see him named this year’s Quebec technology solutions Entrepreneur Of The Year category winner.”
The Canadian program is in its 18th year of honouring the country’s most impressive entrepreneurs from all areas of business. Award winners are chosen based on a number of factors, including their vision, leadership, financial performance and social responsibility. Read Press Release
Accedian Networks Launches 4G Mobile Backhaul Channel on TMCnet

The 4G Mobile Backhaul Channel was launched to cover a range of critical issues, and provide the most up to date information on using Ethernet for mobile backhaul applications, 4G/LTE, Carrier Ethernet markets and developments, industry initiatives, etc. The content will take the form of articles, industry news, white papers, free product trials and e-demos. Visit Accedian’s 4G Mobile Backhaul Channel
LRTV: Accedian Live From the Comptel Backhaul Summit
Accedian’s Craig Easley was front and center at Comptel in October with a discussion on how mobile backhaul wholesale providers can leverage high-performance service assurance for network monitoring and management, SLA enforcement and reporting.
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