Asian cellcos tap CDNs to make money and save costs

Nicole McCormick/Ovum
30 Apr 2012

Indonesian mobile operator Telkomsel has launched Asia-Pacific’s first content delivery network (CDN) solution over a mobile network. Using Akamai and Ericsson’s Mobile Cloud Accelerator platform and Telkomsel’s mobile network, Thomson Reuters is asking its customers in the finance community to pay extra to get its content delivered faster.

We believe that this platform has its pros and cons. On the positive side, mobile operators can reduce international data transport costs, ease network traffic, and potentially open up a lucrative new revenue stream as clients, such as Thomson Reuters, see the benefit of providing a high-quality video service proposition for their customers.

However, on the negative side, content providers will need to convince their customers that they are actually getting a better service, especially when there are so many variables that can affect quality of service (QoS) on a mobile network. In addition, operators could face risks from net neutrality regulations when deploying these platforms.

Revenue growth and cost savings

In February 2011, Ericsson and Akamai announced the launch of the Mobile Cloud Accelerator, which provides CDN and caching capabilities using Ericsson’s SmartEdge Border Network Gateway and Mobile Packet Gateway.

Out of a handful of trial customers, Ericsson announced that Telkomsel would launch the first commercial service in February 2012. Telkomsel’s CDN offering reduces the download time of content by up to 70% compared to downloads from the same content sources without acceleration.

While CDNs are widely deployed in the fixed broadband market, they are yet to be widely used by mobile operators. However, Asia-Pacific operators such as Telstra, KT, SK Telecom, and KDDI are trialing CDNs for their mobile networks.

CDNs are important for mobile operators as they can lead to significant international data transport savings. In emerging markets, international data transport costs can make or break the data business case. There is also a growing desire among operators in developed Asia-Pacific markets to reduce international data transport costs. As a result, Akamai and Ericsson’s platform could provide a considerable cost-saving opportunity for telcos.

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