Sandvine Report: Netflix's Encoding Optimizations Result in North American Traffic Share Decline

Cloud Storage Surpasses Filesharing as Largest Source of Upstream Traffic

WATERLOO, ON, June 22, 2016 /CNW/ - Sandvine, (TSX:SVC) a leading provider of intelligent broadband network solutions for fixed and mobile operators, today released its latest Global Internet Phenomena Report focusing on Latin America and North America.  The report is based on data from a selection of Sandvine's 300-plus communications service provider (CSP) customers.

Sandvine's Global Internet Phenomena Report: Latin America & North America contains findings from both fixed and mobile networks, the highlights of which include:

• Netflix represented 35.2% of traffic on North America fixed networks. While this was a modest decline from the 37.1% of traffic it represented six months ago this change is likely the result of improvements by Netflix to better compress their video library. Even with these improvements in streaming efficiency, Netflix's traffic share on fixed networks in Latin America increased from 6.6% to 8.3%.
• Amazon Video is now the third ranked downstream application (up from eighth a year ago) in North America, accounting for 4.3% of fixed traffic. Sling TV now appears among the top 20 applications on most US networks, but still accounts for less than 1% of traffic.
• Streaming audio and video now accounts for 71% of evening traffic in North American fixed access networks. Sandvine expects this figure will reach 80% by 2020.
• Cloud Storage (Dropbox, iCloud, Google Drive, etc.) has surpassed Filesharing as the largest source of upstream traffic during peak period on North American fixed access networks. BitTorrent now accounts for less than 5% of total daily traffic in the region.
• The addition of video and voice calling is driving growth in Communications apps on mobile networks in both Latin America and North America. In Latin America, WhatsApp traffic share is now 7.4%, more than triple what it was two years ago.
• In Latin America, Facebook and Google account for over 70% of total mobile traffic in the region, this is up from 60% reported last year.
• Over 60% of mobile traffic in both Latin America and North America is now encrypted and Sandvine predicts some networks will surpass 80% this year.

"Netflix's decision to optimize their entire video library will yield benefits for both subscribers and operators," said Dave Caputo, CEO, Sandvine. "Netflix's optimizations means they can deliver more hours of video using less bandwidth, which results in lower data consumption for subscribers, and decreased capacity-related costs for operators."

Check out Sandvine's Internet Phenomena blog on a regular basis for the latest trends, predictions and phenomena impacting Internet usage around the world.

GLOBAL INTERNET PHENOMENA REPORT METHODOLOGY
Sandvine's Global Internet Phenomena Reports are based on a representative cross-section of Sandvine's data from a selection of Sandvine's 300-plus customers spanning North America, Europe, Middle East and Africa, Caribbean and Latin America and Asia-Pacific.  Data is gathered over a one-month period and is completely subscriber-anonymous.  No identifiable information of any kind, including IP addresses are collected during the study.  Sandvine's network equipment analyzes data from an application utilization level and is not content aware.

ABOUT SANDVINE
Sandvine's network policy control solutions add intelligence to fixed, mobile and converged communications service provider networks, to increase revenue, reduce network costs and improve subscriber quality of experience. Our networking solutions perform end-to-end policy control functions, including traffic classification, policy decision and enforcement. Deployed as virtualized network functions or on Sandvine's purpose built hardware, the products provide actionable business insight, and the ability to deploy new consumer and business subscriber services, optimize and secure network traffic, and engage with subscribers.

Sandvine's network policy control solutions are deployed in more than 300 networks in over 100 countries, serving hundreds of millions of data subscribers worldwide. www.sandvine.com.

FORWARD-LOOKING STATEMENTS
Certain statements in this release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements") and are made pursuant to the "safe harbour" provisions of such laws. Statements related to the scope of deployment of Sandvine's products by a specific customer, the potential revenue opportunity with any particular customer or in any market segment, the benefits of Sandvine's products and services to be realized by customers, Sandvine's market position, future opportunities, product development plans and demand for Sandvine's products and services are forward looking statements, as are any statements relating to future events, conditions or circumstances. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements involve both known and unknown risks and uncertainties that may cause the actual results, performance or achievements of Sandvine to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. These risks and uncertainties include, without limitation, changes in internal deployment strategies or plans by specific customers; the growth of broadband internet usage and levels of capital spending on broadband network management systems; the timing of orders and manufacturing lead times; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; increased competition in the broadband network equipment industry; dependence on the timely development and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks including dependence on key suppliers and key technologies; dependence upon indirect channel sales and resellers; factors such as business and economic conditions and growth trends in the broadband network equipment industry and in various geographic regions; global economic conditions and uncertainties in the geopolitical environment including the impact of regulation related to the internet and the delivery of internet services. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and Sandvine does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change, except to the extent required by applicable law.

SOURCE Sandvine

INVESTOR CONTACT: Rick Wadsworth, Sandvine, [phone] ext. 3503, [email protected]; MEDIA CONTACT: Dan Deeth, Sandvine, [phone], [email protected]