Banking on Ericsson’s (ERIC) solutions, Russia’s leading telecom operator Rostelecom recently deployed the world's largest operator content delivery network (:CDN). The financial terms of the deal were not disclosed.
Rostelecom deployed the CDN to primarily cater to the growing video network traffic and also target the growing popularity of over-the-top (:OTT) services. Therefore, the installation of this new content delivery network will not only allow Russian consumers to enjoy higher video quality, but will also provide them with a better user experience with reduced load time and buffering. Hence, this capability gives Rostelecom a significant competitive edge in the Russian telecom market.
This deployment of CDN comes at an opportune time for Rostelecom. According to a report by Research & Markets, the global computer and peripheral connector industry is expected to carry forward the growth it experienced over the last five years and grow at a CAGR of 6.2% over next five years (2012-2017). It is expected to reach approximately $16.7 billion in 2017.
According to Ericsson, the number of global mobile subscriptions is estimated to grow from 6.3 billion at the end of 2012 to approximately 9 billion by the end of 2017. Of these, around 5-6 billion will be mobile broadband subscriptions.
Further, around three-quarters of a billion of these mobile broadband subscriptions will use mobile PC/tablets/mobile routers, and a vast majority will still use mobile phones to access the Internet. Therefore, mobile data traffic volume is estimated to increase by about 9 times from 2012–2017.
Rostelecom is the largest universal communications operator in Russia, serving more than 100 million subscribers across 80 regions. Rostelecom offers state of the art fixed and mobile telephony, broadband access, pay television and cloud solutions to consumers and businesses.
The content delivery network centers are located across 30 major cities in the federal districts of Russia and have a speed of more than 1 terabit per second. With increased competition among content providers, quality and speed of delivery to consumers has become a key differentiating factor.
With the help of CDN, Rostelecom can swiftly reach consumers with the best quality formats including HD and 3D, without delays or interruptions. Further, this type of guaranteed quality of experience is vital to content providers to ensure customer satisfaction, thereby leading to brand loyalty.
Ericsson currently has a Zacks Rank #3 (Hold). Other companies in the industry worth considering at the moment are Ubiquiti Networks Inc. (UBNT), Zhone Technologies Inc. (ZHNE), and Hawaiian Telcom Holdco, Inc. (HCOM).