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Summary

US mobile operator T-Mobile is offering its customers free high-speed data for one year for the augmented reality (AR) game Pokémon Go as part of its "Get Thanked" campaign. Since its launch on July 6, 2016, the game has attracted 21 million daily active users, giving it the largest US user base for a mobile game in history and making it the most-downloaded app on the iOS App Store and Google Play. T-Mobile's move underlines both the popularity of AR applications for smartphone users and the potential strains on networks and users' data allowances.

T-Mobile's zero-rating strategy evolves to include gaming

T-Mobile's initiative to zero-rate traffic from Pokémon Go is in line with previous "Un-carrier" announcements such as Music Freedom, which offers zero-rated access to a select number of music apps, and Binge On, which offers zero-rated access to streaming video services such as Netflix, but optimized to consume less bandwidth.

Offering unlimited data for Pokémon Go also underlines one of the key questions about use of virtual reality (VR) and AR on mobile devices. These technologies require a lot of processing power, which means high bandwidth and a long battery life are necessary to ensure a good experience. VR, which obscures the user's view of the world, is likely to remain more home-based and delivered over Wi-Fi. AR, which layers computer-generated images on top of the real-world view, will require users to consume their cellular data as they explore their environments and interact with other players. As a result, the expansion of shared data plans or larger buckets of data will become necessary.

Mobile operators, meanwhile, will need to take into account the amount of backhaul required to deliver even more video-intensive content through VR and AR, particularly because these technologies won't lend themselves to optimizing content in the way T-Mobile has done with Binge On. Therefore, it is likely that there will be more announcements as AR and VR apps grow in popularity. Apart from AT&T's Sponsored Data initiative in 2014, AT&T and Verizon have been less active in zero-rating content, but they may be driven to do so by consumer demand, particularly as other well-known gaming properties launch games using the technology.

Appendix

Further reading

Augmented Reality: Edging Toward Mass Awareness, TE0001-000888 (October 2014)

"Pokémon Go is a reminder that online gaming infrastructure is hard to get right," ME0002-000683 (July 2016)

Author

Francesco Radicati, Senior Analyst, Consumer Technology

francesco.radicati@ovum.com

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