Yesterday, Sandvine announced a video optimization implementation together with Mobixell at a new US customer, nTelos Wireless. Beyond the story of a new customer and the partnership between Mobixell and Sandvine, there lies another, more global story.

There’s no secret that the video optimization market is evolving. Needs are changing as operators adjust their vision of the future. While most optimization sales until now have been about cost savings or traffic volume control, mobile operators are talking more about what the next major source of revenue will be.

One thing is for sure: Video optimization will play a part in the future of winning mobile operators, regardless of whether they are looking only to reduce their bottom line or to add new services that can complement, and perhaps someday eclipse basic data sales.

As Don Bowman, Sandvine CTO, pointed out in a recent blog post, not all video optimization solutions are alike. And that’s an important fact for operators to remember as they consider future business planning. If an operator is looking to simply cut costs with optimization, then they can achieve that goal with one of the advanced optimization solutions available today.

But down the road, the winners among mobile operators will be those who are brave enough to accept that straight data revenue will eventually flatten out, (as did messaging and voice before it), and that they need to embrace new network monetization models to ensure a profitable future. Whatever those monetization models will be, they start with a network that can handle data intensive services – optimized networks.

Operators are starting to take baby steps – Mobixell customers are using policy management to offer targeted services, including video optimization; they are already generating millions of advertising dollars with our platform; and they are showing growing interest in the potential that mobile customer engagement tools hold for the future of their service strategies.

Eventually, some brave operator will step forward and do something crazy – perhaps set up a policy to buy and sell premium content for their subscribers, similar to the cable TV model. Whatever that crazy step into the future of mobile mega revenue, it will rely on optimized video. This vision of the future is not just a dream: It has to happen for operators to move past the commodity data model. It is what is driving our product goals today so that we can offer operators easy-to-use tools for generating new revenues. This is only a peek into the future with video optimization as a prerequisite for network monetization.

Tell us what you think.

We’ll be discussing this and related issues in an upcoming webinar on May 30th together with Teresa Cottam of Telesperience titled ‘What Video Optimization Experts Are Not Telling you‘. More in our next post.