Seizing the Mobile Media and Cloud Opportunity by Smartphone Volume Caps

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A number of European mobile operators while keeping smartphone tariff data caps low have started zero rating the traffic of their own video streaming and cloud apps.

The finding was released by the Finnish telecom strategy consultancy Rewheel.

"The market is changing. Linear TV is being replaced by on-demand video. Computing and storage is going up into the clouds. Devices are becoming mobile. It is estimated that 70-80% of the mobile data traffic will soon be generated by video and cloud apps. So zero-rating traffic of own gigabyte-heavy apps might be a game changer move for mobile operators in their battle with large OTT players", said Pál Zarándy, partner at Rewheel.

While zero-rating is a tempting solution for mobile operators to create a unique selling point for their own media and cloud apps, Rewheel warns the move might raise eyebrows at telecom and media regulators and competition watchdogs amid the intensifying net-neutrality debate in the European Union and the US.

"Currently the net-neutrality debate is centred on 'fast lanes'. While fast lanes that is speed-based differentiation is noticed by the end users only when and where the access network is congested, zero-rated content is never depleting the users' open internet gigabyte quotas. That is why it could be such a powerful selling point", said Zarándy.

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