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7/10 operators see OTT opportunity

70 per cent of service providers see opportunities in partnering with OTT providers

70 per cent of mobile operators believe that over-the-top service providers present an opportunity for partnership, rather than a threat. Furthermore, 64 per cent of operators acknowledge that OTT players bring innovation to the industry, although 42 per cent of them claim they could offer any service an OTT player can deliver, but better.

The statistics are the findings of research conducted by research firm Coleman Parks for customer experience solutions provider Amdocs. The research consisted of 100 telephone interviews among executive decision makers at service providers, OTT players and device manufacturers globally.

The research also appeared to reveal a power struggle over which party “owns” the customer experience. 66 per cent of service providers said that they must “own the customer” in any partnering agreement, while only 13per cent of device manufacturers and 14 per cent of OTT players are prepared to envision a future in which they cede ownership of the customer experience.

“While service providers used to form partnerships mainly for roaming and with device manufacturers, today they must navigate a more complex environment full of over-the-top, internet, financial settlement and other players,” said Ian Parkes of Coleman Parkes. “Our research goal was to explore this new world, and we were surprised that service providers view OTT players as an opportunity, not a threat, and by the broad agreement on the value of service providers’ core assets.”

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  • Amdocs


5 comments

  1. Thorsten Trapp 05/10/2012 @ 4:09 pm

    “70 per cent of mobile operators believe that over-the-top service providers present an opportunity for partnership, rather than a threat.”

    This is a quite a claim to make without quantifying it.

    Contrast it with MobileSquared’s recent research undertaken across 68 mobile markets globally, including the leading 20 mobile markets, which revealed that 79 percent of operators believe that OTT clients on smartphones are indeed a threat to traditional SMS and voice-based services.

    Conducted by mobile analyst firm MobileSquared, sponsored by tyntec, the research showed that 100% of operators believe voice and SMS traffic will decline over the next 5-10 years.

    On the surface, the Coleman Parks research stating that OTT presents an opportunity is correct. But it should certainly not lazily be juxtaposed with it being a threat – for the two are not mutually exclusive.

    The figures and research show that OTT represents a huge threat. Two-thirds of operators believe they will make money from OTT services – also by partnering – but, crucially, only at the expense of voice and SMS revenues.

    The reality is that we are currently witnessing a phase where operators are trying out several different tactics to cope with “the OTT threat”.

    • Dawinderpal Sahota 05/10/2012 @ 5:08 pm

      Thorsten, according to the research provided, it was the operators themselves who said in their interviews that OTT services provide an opportunity “rather than a threat”.

      I don’t think many operators are under the illusion that their voice and messaging revenue will grow as a result of the rise of OTT services. However, by partnering with OTT providers, operators can see revenue grow in different ways to their traditional voice and messaging stream.

      I guess it boils down to perception, and operators are saying they do not believe OTT services provide a threat to the extent that they had initially thought, and are now beginning to see opportunity.

  2. Thorsten Trapp 08/10/2012 @ 10:38 am

    Thanks for the reply Dawinderpal.

    I think we are actually in agreement about an increasing amount of operators now seeing OTT as an opportunity. My intention was to highlight that OTT can be viewed as a threat whilst being an opportunity at the same time.

    I too strongly believe that operators – particularly first movers – have a strong opportunity to capitalize on OTT. In fact, the MobileSquared research I cited above identified one big opportunity related to off-net traffic, which is mostly overlooked.

    The idea behind this approach is to focus on the generation of revenue-generating off-net traffic which can, for example, be facilitated through the use of virtual mobile numbers embedded in OTT services.

    Crucially, mobile numbers are assets which belong to operators.

    It’s simple really: whenever there is a tie back into the “legacy phone network” – revenues are generated.

    The whitepaper (www.tyntec.com/whitepapers ) shows how Skype have already successfully done this in the voice sphere using local landline numbers. There is no reason this could not be done using mobile numbers in the cloud.

    My view is that we are currently witnessing a phase where operators are trying out several different tactics to cope with “the OTT threat”. A popular strategy is to bet on “multiple horses”. For example, the MobileSquared research showed that around 25 percent of operators had a dual OTT strategy: To roll out IMS/LTE to offer RCS/RCS-e while also partnering with OTT providers.

    Only time will tell what works – but one thing is for sure, operators need to get a move on…

  3. Richard Soares 09/10/2012 @ 10:14 am

    Where can i find a full paper or more info about this?

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