The communications industry is now convinced that Over the Top (OTT) players are better partners than opponents. The question is becoming ‘how do you manage the relationships?’
Both sides, according to a recent Telecoms.com survey and industry discussion, see the benefits of collaboration. The benefits for operators lie in the range and variety of services on offer, for which, at the moment, they receive little, if any compensation.
So collaboration to some might mean giving access and data away for free. At a recent communications summit in New York, Facebook COO Sheryl Sandberg asked Vittorio Colao, CEO of Vodafone whether he would do her a favour and provide free internet access in emerging economies. His response was why would he want to do that? Particularly when the social media site wants to launch a money remittance service, presumably not for free.
Some collaboration makes perfect sense, though.
AT&T’s announcement earlier in the year (a BSS announcement at a Consumer Electronics Show, no less!) that it will be offering sponsored data caused quite a stir. Mainly the stir was positive, but some cried that it was unfair to companies that could not afford to pay the sponsorship. Sadly not everyone has the marketing budget of Procter and Gamble, but most still seem to survive.
A recent survey by Wakefield in the States reveals that the majority of US smartphone users are keen on the idea of sponsored data. Keenest are young adults and adults with children. Both groups either hit their data limits on a regular basis – some just by watching one streaming video a month, others quite possibly by leaving a tablet around while boiling the kettle – or do not use certain apps that 82 percent of the 1,000 strong survey group believe will take them over their limits.
Presumably the survey was done on a slightly hypothetical basis, since AT&T’s first iteration is to attract sponsorship for advertising not for entire pages or sites. This, also presumably, is designed to enrich the online promotion and shopping experience.
Sponsored data will be a major topic of discussion for the next year or two. As will the whole area of collaboration between communications service providers and OTT players. The relationships will come in many forms and the variety of services offered by OTT players will, in itself, promote innovation in the communications market and beyond.
Years ago, when partnerships were relatively new to telecoms companies, managing them seemed easy. Whether roaming partners, MVNOs or banks, many operators thought that they could manage them on a spreadsheet. Mind you, many, if not all, billing managers have a master spreadsheet stashed away somewhere, just in case.
As things got more complex, operators talked to their vendor partners, asking for advice and expertise to make sure that the spreadsheet could keep up with the workload. Slowly the realization crept up on them that they needed industrial grade systems to manage the explosion of partnerships, agreements and the sheer variety of contracts. And along with those systems another layer of systems emerged that looked after the fraud and revenue assurance issues.
This time is no different. As partnerships between operators and OTT players become the norm, the relationships, revenue sharing agreements, commissions and promotions will be, if anything, more complex. Much more complex.
Over the next year or so we will see a proliferation of a new breed of partnership or collaboration system emerge to manage the new wave of innovation that will be born through collaboration.