With the consumer shift from viewing TV over multichannel subscription video services to watching Internet video via a broadband or WiFi connection,  as well as the growing popularity of watching video across a wide range of devices, today’s households are taxing metro residential backhaul networks like never before. This was the focus of Ciena® (NYSE: CIEN) -sponsored research conducted by ACG Research. The study, “Forecast of Residential Fixed Broadband and Subscription Video Requirements,” found that average household bandwidth requirements are poised to increase by 31 percent annually over the next five years—from a peak hour average usage per household of 2.9 Mbps in 2014 to 7.3 Mbps in 2018. 

The study provides network planners information to help them precisely model the impact of residential households’ increasing use of broadband and subscription video services across varied devices on specific network scenarios. It also reveals data about the transition from broadcast service, which is multicast across the metro network, to streaming video service, which is unicast and distributed to multiple devices in each home, and the impact that shift is having on today’s residential backhaul network. According to Ciena, service providers can address this demand by offloading streaming video traffic to a high performance packet-optical network by leveraging newly released technologies such as the hybrid OTN/packet central switching capability on Ciena’s 6500 Packet-Optical Platform or the dense 10GE handling capabilities of Ciena’s 8700 Packetwave Platform to reduce network complexity and total cost of ownership by up to 50 percent.

Key Findings:

  • OTT unicast video traffic is predicted to be 4.6 times greater than traditional multicast traffic by 2018, according to the study. The shift from viewing TV over multichannel video subscription services to Internet video is a fundamental driver and accounts for the majority of the bandwidth requirement for all device types.

  • Usage of Internet video, which includes smart TVs, is expected to grow from 12% of overall peak average bandwidth in 2014 to 25% in 2018, a compound annual growth rate (CAGR) of 56%. The use of Internet video represents the largest contributor to household bandwidth consumption by 2018. 
  • Other factors driving increasing bandwidth requirements include the trend toward multiple Internet-enabled devices in a household consuming content simultaneously; the use of Internet streaming consoles, WiFi- enabled tablets and smartphones, which have the highest device concurrency; the growing adoption of large screen TVs and increased penetration of HDTV; and the emergence of ultra-high definition 4K TV. 
  • The research found that use of 4K streaming video services—which consume three to four times more bandwidth than HDTV—will grow from 2% in 2014 to 12% in 2018. 4K infrastructure is currently deployed in many studios, as is 4K projection equipment in tens of thousands of cinemas worldwide. This provides the basis for rapid consumer uptake of 4K TV sets once consumer electronics companies can reduce the cost. Consequently, 4K TV is likely to become a mainstream offering within five years. 

Executive Comments: 

  • “The explosion of OTT / unicast service as well as the surging demand for video content is pushing service providers to reassess their existing infrastructure and take steps to enhance their metro network. End-user expectation of a more ‘on-demand’ experience is a dramatic change for networks and requires the underlying infrastructure to evolve in order to give users the experience they expect.”
    -          Michael Kennedy, principal analyst, ACG Research

Upcoming Events:

  • For more information about the study, please join a webinar at 11 am EST, 8 am PST, 4 pm UTC on December 2, 2014. To register click here.
  • At the MEF GEN14 event taking place Nov. 17-20, Ciena’s Mitch Simcoe, director of industry marketing and Michael Kennedy, principal analyst, ACG Research, will share findings of this study on the panel Addressing Exploding Over-The-Top Traffic Growth On Metro Networks With Carrier Ethernet. For a list of other Ciena speaking sessions at this event, click here.

 About the Study:

  • Ciena commissioned ACG to conduct the study, “Forecast of Residential Fixed Broadband and Subscription Video Requirements,” to help identify the impact of the shift of video consumption from a broadcast/multicast to a streaming/unicast model on the residential backhaul network.
  • The Ciena-ACG study is unique in that it projects bandwidth demand using a metric that is directly applicable to residential backhaul capacity planning (Average user Mbps in the busy period).

About Ciena
Ciena (NYSE: CIEN) is the network specialist. We collaborate with customers worldwide to unlock the strategic potential of their networks and fundamentally change the way they perform and compete. Ciena leverages its deep expertise in packet and optical networking and distributed software automation to deliver solutions in alignment with its OPn architecture for next-generation networks. We enable a high-scale, programmable infrastructure that can be controlled and adapted by network-level applications, and provide open interfaces to coordinate computing, storage and network resources in a unified, virtualized environment. For updates on Ciena news, follow us on Twitter @Ciena or on LinkedIn http://www.linkedin.com/company/ciena. Investors are encouraged to review the Investors section of our website at www.ciena.com/investors, where we routinely post press releases, SEC filings, recent news, financial results, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use.

Note to Ciena Investors
Forward-looking statements.
This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. These statements are based on information available to the Company as of the date hereof; and Ciena's actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its Report on Form 10-Q, which Ciena filed with the Securities and Exchange Commission on September 9, 2014. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Ciena assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.