Wednesday, November 27, 2019

Sometimes Rankings do Not Matter Much

Sometimes international rankings on various measures of connectivity quality are less important than you might think. Consider voice adoption, where the best the United States ever ranked was about 15th globally, for teledensity (people provided with phone service).

Does anybody really think that was any kind of impediment to economic growth? That might also be the case for video entertainment quality of experience.

To the extent that video quality of experience is becoming a criteria for mobile service, operator policies, usage and bandwidth supply have a big impact. In fact, bandwidth alone does not dictate video quality of experience, Opensignal suggests, as some countries with good downstream bandwidth lag on video experience scores.


You might think that sheer download speed mostly or exclusively is key to experience rankings, but Opensignal tests suggest this is not the case. 


South Korean users’ experience ranked first for download speed yet 21st for video, while Canadians’ were third fastest for download speed, but just 22nd for video. 


Those results happen because mobile operators manage video traffic to preserve experience for other apps as well. 


Experience also is a function of deliberate policy: carriers often automatically convert the picture quality of video from 1080p full HD, down to 720p, or even to just standard definition quality. Also, some service providers might offer standard quality or 720p image quality as a part of policies that offer unlimited or zero-rated video access. 


Also, customers on unlimited usage plans might not have the same incentives to switch to Wi-Fi connections as do other customers with more-limited data usage plans. 


The point is that a combination of circumstances--high video consumption, unlimited usage plans, limited spectrum and retail packaging--combine to reduce image quality scores. 


What is not so clear is the importance of image quality for consumers, compared to usage allowances and rating policies. In other words, customers might accept or prefer lesser image quality in exchange for ratings policies that save them money, in the same way they often will tolerate advertising if it saves them money. 


The value proposition is especially important if access to mobile video entertainment is a key part of the marketing. In the U.S. market, for example, T-Mobile U.S. includes Netflix on its Magenta plans; Sprint includes Hulu and/or Amazon Prime on a number of its plans; Verizon advertises 5G as suitable for 4K video quality on mobile and bundles Disney+ with its 5G wireless home broadband plans; and AT&T offers one of HBO, Starz, Cinemax, or Showtime as part of its Unlimited and More Premium plan. 


Mobile video importance can be seen in advertising as well. The Internet Advertising Bureau says 62 percent of total video ad starts are happening on mobile devices, for example. 


The Opensignal methodology takes picture quality, video loading time and stall rate into account to create a score on a scale of 0 to 100, reflecting users’ perceived mobile video quality. 


While there was an improvement in U.S. customer video experience, it remains in the “fair” category. U.S. customers had the lowest video experience score of any of the G7 countries as “U.S. carriers struggle with the combination of enormous mobile video consumption and insufficient new spectrum.”


U.S. mobile service providers face two key challenges not seen in many other countries: U.S. consumers watch a lot of mobile video, while spectrum is limited. 


Opensignal has found that 39 percent of U.S. consumers watch TV programs on their smartphones, and similarly, 38 percent watch movies. Also, 28 percent of consumers sometimes switch to mobile connections in order to watch video.


Some 38 percent of consumers watch video on their smartphone at home on a mobile connection (compared with 71 percent that watch at home on Wi-Fi).


International rankings can be useful. At other times they are interesting, but perhaps not indicative of pressing business problems.

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