This Industry Viewpoint was contributed by Lee Cottle, Director, VP Global Head of Sales for Push Technology
Five years after Apple first used "There’s an app for that” in a marketing campaign for the iPhone 3, it seems there really is a mobile application for everything, whether it’s helping users transform their morning routines into fitness workouts, or just saying “yo” to friends.
Of course, we use apps for so much more than those off-the-wall examples. The average person uses about 26 different apps per month, and that number will only climb as the total number of app downloads rises from 138 billion in 2014 to the predicted 268 billion expected in 2017. This growth is also being accelerated by the younger, more gadget-dependent work force, who are essentially throwing fuel on the fire as they download new and clever apps by the dozen.
Despite all their useful functions, or perhaps because of them, these apps use data – and lots of it. And, unless action is taken by all the players in the mobile app ecosystem, including operators, app providers and consumers themselves, we will face widespread, unprecedented network strain that will, in turn, lead to app performance problems, as well as performance degradation of network-based services.
Many consumers are already feeling the effects of data overload. When frustrated consumers think their apps aren’t performing well, or that they’re racking up data changes and degrading overall device performance, they won’t hesitate to look for the “delete” option – in fact, more than half say they’ll delete an app that doesn’t perform well and load quickly. That also means fewer customers for telcos and app providers. Everybody loses.
To reduce churn, telcos and app developers need to find ways to improve the user experience, and that means streamlining services, by making them more data efficient and scalable. With intelligent data distribution, app developers shrink the size of data packets travelling across the network by eliminating redundant and out-of-date information, thereby helping apps achieve greater throughput with more speed and reliability for consumers.
Are telcos and app providers at the point where they can work together to unclog the bandwidth bottleneck? The answer isn’t yet clear, but until that point, intelligent data distribution is one solution they can both agree on. For network operators, this means optimizing their current network assets. For app developers, they’ll be able to design apps that are less chattery and don’t use as much data.
Are Telcos Ready to Transform?
It’s a difficult time to maximize profits in the network services space. Telcos manage the core infrastructure that supports the growing mobile Web, but less often are they responsible for the data and apps that consumers crave – that comes from over-the-top (OTT) service providers like Skype, LinkedIn, Twitter, Facebook, BlackBerry Messenger, Snapchat, WhatsApp and more.
OTT services like these eat up a lot of data, depleting network resources and cutting into traditional telco revenue streams. The current telco service delivery model is not equipped to handle this new landscape, so what can providers do?
Expanding network spectrum isn’t an option. Just like in real estate, there’s only a limited amount of space that can accommodate new construction. Spectrum is finite. What eventually has to happen is for telcos to move beyond providing just connectivity. They need to drastically reshape their service delivery models by building out new, value-added services of their own, to compete with OTT services, including providing a cloud service for developers to build, manage and deploy applications. Such a strategy shift would allow telcos to better predict traffic fluctuations and allocate network resources as needed, not to mention increase revenue streams.
Until that transformation is complete, the answer for telcos’ data overload woes is network optimization – using intelligent data distribution to more efficiently manage their existing network assets as data usage rises. But, this approach is a double-edged sword. After all, telcos rely on revenue from customer data usage, yet building more data-efficient applications cuts into these very revenue streams. For now, telcos need to encourage OTT providers to build more data-efficient applications and use networks more efficiently, eventually delivering a better user experience.
App Providers Have More to Lose
As telcos find ways to relieve network strain, app providers are doing their part by slimming down their apps with intelligent data distribution. After all, they’re the ones bringing all the new network traffic into the fold. Consider how many users WhatsApp alone has signed on since launching in 2009 – it crossed the 500 million active user mark earlier this year.
It’s impossible for any app to gain new users – and new data consumers – at such a fast rate, without overall network performance being affected in some way. The status quo of the whole network landscape has to change to adjust to network traffic.
Should telcos and app developers fail to address the bandwidth bottleneck, consumers will eventually become fed up. And – this is the important part for app providers – their services are what will be in the crosshairs of consumers when performance falters. After all, why would consumers go through all the trouble of changing their telco provider when simply deleting the app could solve the problem? The most popular data hogs may be spared deletion, but consumers will send many others to the app store scrap heap.
It’s All About the User Experience
Today’s consumers are getting smarter about their mobile data consumption and expecting a better user experience. They use tools like “Know My App” to research the apps that are deteriorating the performance of their phones and hiking up their phone bills. Eventually, consumers will even be able to go to an app store and see a data rating for each app. When that happens, they won’t have to wait to delete a data-hungry app – they’ll just scroll right past it and not download it at all.
And, that’s what the bandwidth bottleneck could lead to – a mobile ecosystem in which everybody loses, in which consumers aren’t enriched by content, and both app providers and network providers lose revenue. That’s not what anybody wants, but that pressure is likely to encourage more streamlined apps from providers and more efficient networks from telcos. And, with intelligent data distribution bringing speed, scale and reliability to apps, maybe we’re finally at a point where the promise of an app for everything is finally within reach.
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