Ericsson Lands Massive Russian CDN Deal

Russian telecom operator Rostelecom has deployed the world's largest operator-owned content delivery network, in terms of geographic scope and capacity, in the hope of monetizing the over-the-top video that traverses its broadband network.

Using Ericsson AB (Nasdaq: ERIC)'s Media Delivery Network platform, announced earlier this year, Rostelecom set up servers in 30 major cities across Russia on a network with the capacity of more than 1 Tbit/s. (See Rostelecom, Ericsson Team on Largest Operator CDN.)

The carrier, which has 9.5 million broadband customers and is also Russia's largest pay-TV provider, is the first major deployment of the Media Delivery Network platform, immediately becoming the poster child for what Ericsson hopes is expanded CDN deployment by wireline and wireless operators globally.

Speaking from the trade show floor of the IBC event, which starts tomorrow, Lisa Skelton, head of marketing, Video and Data Traffic Optimization, at Ericsson, says Rostelecom will be able to use its CDN to not only improve the quality of user experience for its customers but also to build a business charging OTT content providers to host their content.

"Only a network operator can guarantee the consumer quality of experience -- a global CDN can't do that, because they don't have the reach to the customer that the operator has," Skelton says. "Rostelecom will be selling its CDN services to OTT video providers, which enables them to monetize the OTT traffic that is flowing over their [broadband] network."

Ericsson is also touting the quality-of-experience piece, saying consumers are willing to pay more for better viewing experience, giving operators another opportunity to generate revenue. By locating the most popular content closer to their customers, the operator CDN also enables either a wireline or wireless operator to minimize the impact of video streaming on their backbone networks.

Why this matters
Many broadband operators have already deployed some form of content delivery networks, and are likely to continue to use those to minimize the backhaul of popular video traffic. Rostelecom is the first announced deployment of Ericsson's new approach to CDNs, and could be a proof point for monetizing OTT video for other operators.

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— Carol Wilson, Editor-at-Large, Light Reading