AT&T's Donovan: 'We're ready' for increasing video traffic

LAS VEGAS--Video continues to dominate the traffic on wireless networks, according to top wireless executives who spoke here at the Consumer Electronics Show as part of a panel discussion on personal entertainment. And the increases in video traffic have spurred dramatic changes to the way networks and content are managed.

AT&T's (NYSE: T) network has gone through "a lot of technological advances" in the past few years to deal with users' increasing demands for data, said John Donovan, senior executive vice president of AT&T's technology and operations. Indeed, since it first launched the iPhone, AT&T has rolled out LTE technology across the vast majority of its nationwide cellular footprint.

But, as Donovan acknowledged, AT&T's experience launching the iPhone and other smartphones wasn't without hiccups. Several years ago, the carrier's network was widely criticized as slow and unreliable--a situation that Donovan said the carrier worked hard to correct.

As a result of those issues, Donovan said that the carrier has dramatically improved its usage forecasting capability, so that now it is prepared for increases in data demands on its network.

"We're world class now as knowing what our need is going to be," Donovan said during an appearance at the 2015 Citi Global Internet, Media & Telecommunications conference in Las Vegas on Tuesday, explaining that the carrier may not know exactly where demand will come from--either YouTube or FaceTime--but that it's prepared for those increases. "I think we're ready" for what's coming, Donovan said.

Underscoring the need for more capable wireless networks, Fullscreen CEO George Strompolos said that in 2011 when Fullscreen was founded, 7 percent of its video traffic traveled to mobile devices. This year, he predicted that fully 65 percent of Fullscreen's video traffic will travel to mobile and tablet devices.

Marni Walden, EVP and president of products and new business at Verizon, said that the carrier is in part using LTE Multicast technology--which efficiently broadcasts the same content to multiple users--to address users' rising demands for video. "I think the technology is there" to address users' data demands, Walden said. (For its part, AT&T too has said it will launch LTE broadcasting technology.)

Verizon (NYSE: VZ) executives have said the carrier will launch LTE Multicast technology sometime this year, mainly to cover sporting events in real time. Walden said the carrier hasn't disclosed exactly what the business model for the technology will be, but she said the carrier is considering multiple options including free services, subscription services or even a scenario where corporations would use it to broadcast training or educational content.

"There are a number of different business models, not one," Walden said of LTE Multicast. "My job is, how do we find new revenue?"

But LTE Multicast is just part of the industry's effort to evolve, said Ericson CEO Hans Vestberg. "We're going to see so much more" beyond LTE Multicast.

Indeed, Donovan said AT&T continues to work on a variety of initiatives to improve its network and satisfy its customers. "I think there's a lot of work to do on the user experience," he said, pointing mainly to TV and video consumption. He said users should have simple and easy ways to transfer their content from one screen to another, like moving a sports game from their TV to their tablet as they leave their house. He said though that in many cases AT&T doesn't have the content rights to allow users to stream sports or other events outside their home.

Despite such issues, Donovan said AT&T knows that it must solve such issues. He said the carrier years ago decided that it's in the video delivery business, and that includes delivering video to users in the home and on the go, either through standard cable programming or via an over-the-top model.

"That part of the hurdle we've leaped, we understand," Donovan said.

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