AsiaInfo founder calls for greater integration between telcos and OTTs

Operators should rethink their strategy and open their businesses more to OTTs according to Edward Tian, President and co-founder of Chinese BSS vendor AsiaInfo. In an interview with Telecoms.com he said providing OTT services as a partner offering is not fully benefiting operators, and they should adopt a more integrated approach to collaboration.

Tian said that while OTTs are good at innovating new products, telcos have a wealth of experience in another part of the marketing mix: pricing, distribution, packaging and promotion. He said operators should take an advantage of this by building themselves up as digital service platform companies, rather than just continue as traditional telecoms providers.

“I think telecommunication operators have a tremendous opportunity to open themselves up and become what I call a platform company: provider of network security, provider of the customer-base to OTTs. I think this current trend where telcos are just using a BSS as a platform and an OTT service as their partner offering has created a venomous situation [for telcos].

Tian claimed that if operators want to be successful in the future telecoms sector, they need to forget about the historical industry classifications, and embrace the sector lines becoming more blurred with the increasing prominence of software, services, cloud computing and big data. “In the past we separated telecoms, IT, the internet and media into four major industries. I think we are now seeing convergence [of all of these],” he said.

“All industries are coming together, with cloud computing [running] in the background, internet of things at the front, and big data is really the key for all industries in realising this convergence. Maybe in 20 years’ time we are fully rid of these kinds of [industry] classifications, all operating as digital companies, or digital service providers.”

Of course AsiaInfo itself has created a whole product around this concept: the Veris O2P platform, which so far has been used by its Chinese customers China Telecom and China Unicom. The software vendor plans to introduce the platform to the Western market too.

“If a telecommunication company does not have a new generation BSS, they cannot provide payment-as-a-service, or customer management services, or data-plan-as-a-service. I think in that case they will just become a commodity, just the provider of the physical network. I think this is really a key issue where operators can add value to those OTT services rather than just provide the network for them.”

But AsiaInfo’s vision is not all just about working together as partners. It also sees new ways for operators to compete with OTT providers. Tian said telcos should be thinking about moving their business to an ecommerce platform.

“I think telcos can only not offer a platform for OTTs but that they could actually also compete in the OTT area. Telecom operators have tremendous physical distribution stock, a really trusted relationship with customers, and also very strong payment processing methods. They also already have some of the products needed to sell over an ecommerce platform rather than through the traditional channels.”

“The simple outcome for using an ecommerce platform is a 30% saving compared to the physical channel. But more importantly, through ecommerce the telecom operator begins to own the customer. [This is because] unless you buy an ad hoc file, there’s also an opportunity for recommendations to buy other things along with the initial product. So I think this is very interesting. We see this as just the beginning and telcos shouldn’t underestimate themselves.”

According to Tian there’s also an opportunity for further revenue streams on the enterprise sector, where operators could in his opinion begin to offer similar services as Skype and WhatsApp but targeted for the corporate market.

The question does spring to mind, though whether this would really be a hugely successful proposition as it seems there already are plenty of communications solutions widely used by consumers and businesses alike.

However, Tian certainly thinks this something telcos should be considering. “Instant messaging is mostly provided by OTT companies to the consumer. There’s a huge opportunity to offer enterprises these types of services. I think telcos should get into that market.”