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Wireless carriers look to innovate how mobile video is delivered, paid for

The explosive growth in smartphones, mobile applications and other mobile services has resulted in unprecedented consumer demand for mobile data. Wireless carriers under pressure to meet these demands are looking at new ways to deliver and charge for data usage, including letting content providers foot some of the bill.

IPhone 4S users are the biggest data consumers, demanding twice as much data as iPhone 4 users and three times as much as iPhone 3G users, according to a new report from Arieso. Video is one of the biggest data hogs, which is why the wireless industry is exploring new innovations this year in how video is delivered and paid for.

In an interview with Reuters at the Consumer Electronics Show in Las Vegas last week, Verizon Wireless executive Shadman Zafar said the industry is looking at enabling consumers to order video content on their mobile devices in advance of when they plan to watch it so the video can be delivered gradually and put less of a strain on the network.

If the cost to consumers were less for the data usage as a result, this could help drive the amount of video consumers watch on phones or tablets.

Subsidized wireless content
Carriers are also exploring ways to provide content that would enable the content provider to pay for the wireless access to a Web site or service.

Operators know they need to add significant spectrum and new capacity to meet growing consumer demand.

The new generation of smart devices is making the situation worse because of the higher amounts of data that users tend to consume. As a result, wireless networks risk delivering a sub-par experience if they do not increase their efforts to support the growing demand for data.

In the Arieso study, the company found that users of the iPhone 4S demand three times as much data as iPhone 3G users and twice as much as iPhone 4 users. The study also shows that Google Nexus One users make twice as many data calls as iPhone 3G users.

The study, Recent Smartphone Trends & the Extreme Data User, also found that 1 percent of subscribers now consume half of all downloaded data. 

Wireless carriers could be reluctant to chase any large-scale acquisitions because of the scrutiny AT&T faced from regulators for its failed attempt to purchase T-Mobile USA but they still need to find ways to continue boost their capabilities.

Verizon Wireless recently announced a joint venture with cable operators such as Comcast Corp. and Time Warner Cable that would see Verizon buy spectrum from the cable companies, who in turn would resell its wireless services.

There could also be relief on the horizon, with the Federal Communications Commission reporting last week that it has received support from a group of senators for incentive auctions of unused spectrum licenses from broadcasters that could be sold to wireless networks without legislative restrictions.

The FCC is hoping for a decision from Congress on incentive auctions in the first quarter.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York