to OP,

not to sound mean but seems you are stll in the n73 era...with stock clocks the phone can handle AVC baseline profile up to 5 mbps @ 800xXXX resolution, standerd mp4p2 can go even higher.

also note theres a big difference in plain mp4 and avc encodings at the same bitrate, do some reading.

mp4 container is still very relavant, device may have trouble reading new bits of mkv container. hence mp4 is suggested.