In recent years Over the Top players (OTTs) have been seen as a major threat, impacting operators’ core revenue streams. But OTTs present an immense opportunity if operators are able to unlock the value of their assets, effectively and efficiently.
Most operators, having realized that the threat of OTTs will not be stopped by blocking their apps, or by trying to stimulate usage of traditional services, believe that partnerships are the best way forward. Partnering with OTTs should enable operators to stop being a mere delivery channel, and gain a share of the revenue from apps and services which run over their networks. And with services in the open market evolving fast, and consumer behavior shifting faster, partnering will enable operators to formulate business models that are nimble, adaptable and mutually beneficial to all parties.
But why would an OTT wish to partner with a telco? Operators possess qualities and capabilities that OTTs need, and which many cannot attain independently: established customer and billing relationships; comprehensive customer behavioural data; and advanced, reliable business and operations support systems.
OTT developers have their own challenges: with hundreds of apps being launched each week, most face discoverability issues, and maintaining popularity is a constant battle. Profitability for these players, both big and small, is becoming a long-term issue and at present many OTTs lack a viable business model. In fact, many OTTs lack the BSS/OSS systems required to offer an attractive, dependable and chargeable service. Therefore, there is an opportunity for operators to add value to their OTT partners by providing advanced marketing, billing and distribution capabilities.
The question facing operators now is: what is the best approach to establish such partnerships? In particular, what IT tools can make partnerships work effectively, and are there any tools and platforms available in the market today?
One of the proven approaches has been to adopt a B2B collaboration platform that facilitates the sharing of resources in a controlled way. This enables operators to easily provide the required BSS/OSS services to a large number of OTTs, instead of having to ‘hand-crank’ the IT systems to support each partner individually. In unlocking the value of their network and IT assets, operators can enjoy a new revenue stream whilst OTTs can significantly increase their subscriber base and deliver an enhanced service to their customers.
Another benefit of a collaboration platform is the ability to converge products; a mash-up approach of combining traditional communication products with innovative digital services and content. For example, an operator could partner with a music streaming app that needs a new channel to market. Such a collaboration would enable the developer and the operator to offer a new, attractive price plan for the service, charged directly to the end customer’s phone bill.
Multi-party collaboration can prove to be a massive headache for IT departments but collaboration platforms are designed to eradicate such complications. Integrated within the operator’s BSS systems and network capabilities, the platforms act as an intermediary, vastly simplifying the sharing of resources. Developers and operators have their own respective web-based interfaces, allowing management of their roles, users’ profiles, and verification of revenue settlement to be both efficient and transparent.
Collaboration platforms have already been successfully deployed in China. China Telecom has converged its communication products across its fixed, mobile and IPTV services with the digital service products of over 20 OTTs. The platform has also allowed OTTs to use the operator’s network assets (eg SMS gateway), and back-office systems (eg Billing, CRM, BI, etc.) to enhance their services and to promote and monetize them at a scale and with a precision that was not previously possible.
It is evident that OTTs are a major force that operators can no longer hope to stamp-out. Partnering with them is potentially beneficial, but it is essential that BSS/OSS vendors offer out-of-the-box, proven and comprehensive IT solutions to facilitate such collaborations. These tools are essential to enable operators to thrive in the new digital economy.
 Analysys Mason, ‘Digital economy strategies: new revenue streams, new operations’ webinar, November 2013