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Operators edge toward revenues from low-latency services

A handful of service providers across the globe have begun taking some very small, tentative steps toward a potentially major new source of revenues: charging money for lower latency.

Here are a few examples:

  • After testing the service last year, US cable provider Cox is now offering an Elite Gamer plan that costs an extra $7 a month on some plans and promises to boost the speeds between gamers and their online games by as much as 32%.
  • POST in Luxembourg and Deutsche Telekom in Germany are among the operators offering their own cloud gaming services. Such services rely on low-latency Internet connections between players and their cloud-based games.
  • Lumen (formerly CenturyLink) now offers 5ms of latency across 95% of the US and has begun boasting of some initial customers for its edge computing service.
  • And Verizon is highlighting some of the initial users including startups Zixi and YBVR of its 5G edge computing service with Amazon Web Services (AWS).

To be clear, the business models around these kinds of offerings remain highly ambiguous. For example, YBVR's Sebastian Amengual told Light Reading his company hasn't yet discussed business models with Verizon. And POST in Luxembourg is offering its Blacknut-powered cloud gaming service for free to its 5G subscribers for a year.

Further, most such offerings don't yet have a strong connection to 5G a technology often touted as a leading driver for the kinds of edge computing network designs that enable low-latency services. "It is proximity to the edge that is the killer app, not yet 5G," wrote Omdia analyst Chris Nicoll in response to questions from Light Reading. (Omdia and Light Reading are both owned by Informa.)

"Applications such as cloud gaming and 4K content delivery are being enabled by a strong edge cloud focus, rather than utilizing the low-latency communication capabilities of 5G," he added.

Indeed, most 5G providers have been focusing on deploying new 5G-capable radios in their networks rather than the distributed computing functions that would support low-latency connections. After all, the 5G transmission standard supports blazing-fast data speeds, but it's only applicable between users and cell towers. The remainder of the network the route between a tower and a cloud computing service must also be shortened (typically through an edge computing network design) to reduce a user's actual latency measurements.

Nonetheless, the fact that some operators such as Cox and Verizon have begun dabbling in the sale of low-latency services could address the "chicken-and-egg" conundrum that has so far stifled the space. After all, developers and others can't begin designing and selling low-latency services until operators actually begin to make those kinds of functions available.


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