Joseph O'Halloran ©RapidTVNews | 19-07-2011

Even though over the top (OTT) video service are far from maturity, their increased use is set to make bandwidth usage per household grow by 50% through to 2015, threatening bandwidth shortages.

The fears of pay-TV companies, especially cable TV suppliers, has been that one day their business lines may be threatened by the increased uptake of OTT services such as Netflix and Hulu. Such services will likely be accessed by the bourgeoning number of connected TVs and other internet enabled devices which will support OTT.

However in what will represent a glimmer of light to pay-TV firms, the expected mainstream arrival of OTT may be some way off yet as even though the devices are there, there may not be enough network capacity to support them according to a new report from IMS Research.

Even though it expects pay OTT subscription services to generate a cumulative $32 billion in revenues globally over the next five years, and will account for a larger part of the market than pay-per services that enable users to rent or purchase videos on an ad-hoc basis, IMS warns that many telcos are threatened with a bandwidth shortage because of OTT. It adds that IPTV providers will face substantial challenges adapting their networks to accommodate what it calls an onslaught from OTT.

IMS estimates that in 2010 peak bandwidth utilisation was 44% percent of capacity, and that the bandwidth usage per household is forecast to increase by more than 50 percent between 2010 and 2015.

“What we have now is a situation where the telcos are actively seeking solutions to optimise bandwidth,” explained IMS analyst John Kendall. “OTT is here to stay, and the telcos have accepted that.”

But what they may not accept is the cost of making their networks support OTT. IMS calculations suggest that three-quarters of IPTV households receive their television over an ADSL connection, thus leading to potential bandwidth headaches. .Future proofing by rolling out a fibre-to-the-home (FTTH) infrastructure is prohibitively expensive and very time intensive.

Even in the most advanced broadband countries would there be a problem, Kendall warned. "In countries like France, where IPTV has been a great success, ADSL can be leveraged effectively due to shorter loop lines…in 2010, peak potential bandwidth demand sat at just over 37% of network capacity. However, by 2015, that number will jump to nearly 60%, mainly due OTT and multi-screen video. In a country with pronounced OTT content demand like the United States, average data usage by an IPTV household will rise to nearly 25 Mbps in 2015, up from the current 19 Mbps. While the increase may not seem significant, IPTV households are expected to double, creating a need to address possible congestion issues.”