Canadian company Vantrix is well positioned at a time when more and more consumers want to stream huge amounts of data through their smartphone or tablet.
Vantrix's technology helps consumers get more bang for their buck by compressing video content by as much as 50 to 70 per cent before it's viewed by the end user. The company expects the compression rate will get even better over time.
With more than 70 clients around the world - including service providers Sprint, Orange, Telefonica, T-Mobile, Saudi Telecom Company, Tata Telecom and Videotron in Canada - Vantrix has some insight as to how companies are charging consumers to access rich content like live video streams or graphics-heavy apps on the go.
And Canadians are paying a lot, perhaps too much, said Vantrix chief marketing officer Patrick Lopez.
"Data plans in Canada are among the most expensive globally and they certainly are a hindrance when it comes to the amount of video and traffic (one can use)," Lopez said.
Because of Canada's vast geography, it's more difficult and expensive to build the infrastructure needed to support high-speed mobile networks. But there's still room for more aggressive pricing that deviates from the current industry standard in Canada, Lopez added.
For iPads, Telus has a data plan offering 500 megabytes of consumption for $20 a month, while Bell and Rogers charge $15 a month for 250 MB, or $35 for five gigabytes.
"I think the costs that are borne by subscribers in Canada are disproportionate compared to a lot of other countries," Lopez said.
CTV's executive vice president of digital media, Alon Marcovici, expects data rates will eventually come down, but he isn't sure it'll be this coming year.
"Canada as a whole, as a nation, still has to normalize in regards to its bandwidth caps and mobile data charges. There are plenty of studies about where we rank in the world in terms of charges for that, so I think (prices must drop) ... before we'll really see the true demand for that media," Marcovici said.
"I don't think that will necessarily come in this upcoming 12 months, but I think what we'll see is the appetite for it escalate."
While TV executives would love to see data prices fall so it becomes cheaper for consumers to watch lots of mobile video, there are corporate conflicts at play.
"All the majors are pretty much owned by telcos, or are about to be, so it's naive of us to think we won't be connected to their strategy in the long term," Marcovici said. Bell bought full ownership of CTV in September, pending regulatory approval, Rogers owns Citytv, and Shaw Communications, which bought CanWest's TV channels in February, is getting into the mobile business in the new year.
One trend that might develop further in 2011 is the selling of data in different bundles. Bell recently started selling an add-on to watch premium video content - including live sports or HBO shows - on a smartphone or tablet, including data consumption. It's not unlimited, but rather than giving customers an allowance by megabyte, it's metered by the minute. Plans typically include 10 hours a month, and it's an extra $1 for every additional hour of video viewed.
"What you're seeing is experimentation right now because no one's figured out the sort of secret sauce that satisfies the needs of consumers and carriers at the same time," said analyst Mark Evans.
"I think data in general is going to be a key issue in 2011 ... because eventually we're going to get to a point where consumers won't be able to do what they want to do because they'll run into bandwidth caps."
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