Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Alexandre Pelletier, Head of Innovation at Tata Communications looks at the recent boom in virtual reality products and the possible implications for telcos.

The explosion of video consumption and the different ways that people now view content has caused internet traffic to grow exponentially. The next big thing in content consumption is set to be virtual reality – as demonstrated by the huge range of VR technologies showcased at this year’s Consumer Electronics Show.

Initial attempts at VR failed to take off, with the Virtual Boy headset by Nintendo, for example, discontinued after one year following an influx of customer complaints. However, where Virtual Boy failed, may more are now gaining momentum. In fact, a report by CCS Insight predicts that augmented and VR hardware will become a $4billion market by 2018, increasing from 2.2m shipments to 20m in the next three years.

Understandably, VR is a concept that many people are extremely excited about, and when VR is done right, it can create incredible results. One of the most exciting areas that VR presents for content creators is shared experiences such as the Eve: Valkyrie game due to ship with Oculus Rift. Then there’s Red Bull and its plans to launch a full-time linear Red Bull TV channel this year, which will bring virtual reality elements to its sports, music and entertainment content. Imagine putting on a headset, which transforms your surroundings and put you in the midst of your favourite band performing to a crowd on their headline tour, live.

While all of this sounds exciting, the additional strain that VR will put on networks is a major concern. To be able to support data-powered innovations such as VR, global connectivity providers have invested heavily in capacity, engineering a future-proofed backbone that shouldn’t buckle under the extra pressure. The biggest challenge lies in last-mile networks which need to be able to carry VR content to homes and provide a seamless, genuinely immersive experience for consumers.

The issue is the huge increase in bandwidth demand generated by VR content: VR requires about five times as much bandwidth as HDTV, as well as very low latency to support an immersive experience. While large service providers offer the backbone capabilities, cloud footprint, advanced traffic management and content delivery networks at the core, many of today’s access technologies at home do not support such requirements, preventing high quality live streaming of VR content from the cloud. Instead, the user will need to buffer or store the content locally, which greatly limits commercial opportunities with VR, starting with online gaming.

Intelligent traffic management solutions, compression algorithms and investments in very low-latency, high-throughput networks will help last-mile networks to cope with the demands of VR content. Only such investments will prevent a stop-start and delayed connection that could dampen the experience, or potentially destroy it – going as far as making user disorientated and nauseous. The alternative is to restrict VR to static, interaction-free, locally stored content – but this is definitely not what we, as users, would want.

In the future, as VR begins to reach the masses, the next natural development will be for these technologies to go mobile. Today’s 4G connections won’t be able to handle VR, so fibre networks will play a central role as the backhaul for delivering the seamless, high-quality connectivity that these immersive experiences will demand.

Beyond the hype of the latest and greatest VR gadgets, there needs to be a deeper understanding of the pressures that this rich traffic will place on networks, to ensure that networks are smart enough and robust enough to provide the brilliant user experience that consumers expect. Arguably, there has never been greater bandwidth strain on connectivity providers.

VR’s success will be largely dependent on last-mile networks which will enable it to flourish – taking entertainment to a new level and opening up new revenue streams for content providers through cloud-based distribution on-demand. Investments in low-latency, high-throughput, intelligent networks could mean that a technology that was dreamt up around 60 years ago will finally become a reality for millions.

Alexandre Pelletier is in charge of Tata Communications’ innovation strategy. He uses his more than 15 years of experience in telecoms and consulting to generate disruptive game plans that help make Tata Communications more agile and responsive to customer needs.