Believe it or not, 75% of Telco operators have expressed concern about losing revenue to OTT players! (Source- Cartesian). This is one of the reasons for the entry of OTT in Telecom.
Over-the-top (OTT) companies like Netflix, Skype, and Google are posing a serious threat to the telecom industry as customers prefer to use OTT apps instead of traditional voice and messaging services. For instance, OTT SMS volumes globally are exceedingly high so, telecom operators are facing a decline in average revenue per user (ARPU).
According to a recent survey by adlittle, already 25% of the total cross-border international call minutes are totally represented by Skype calls. On the other hand, according to another survey, rise of OTT services will cause a loss of USD 386 billion in revenue to the telecom operators by 2018! (Source- Fraud and Technology Wire)
From the above statistics by Ovum we can understand, worldwide Operator Voice and Messaging Revenues Lost upraising to OTT players from 2012-2016. Forecasts also predict that by 2016, lost revenue of Telco operators to OTT services will be worth 7% and 28% of projected voice and messaging revenues respectively!
So, it’s confirmed that several aspiring OTT companies have already had a great impact on mobile VoIP and total voice market progress as well as telecom operator’s downfall.
But, what do you think of the Rise of Mobile OTT Service? Can it be considered an innovative opportunity for Telecom Operators apart from it’s risks?
Well, a telecom operator can either, see the upsurge of Mobile OTT service as a cause of major upset and keep counting the loss or, can consider for the rise of OTT as an opportunity and plan smartly to fight back to the field.
To achieve improvement, a telecom operator must focus on planning smart unique strategies to gain back the lost revenue over the rise of mobile OTT service. But, how? And most importantly, what is the “Smartest” move to save the Telco industry from losing big amount of revenues on a regular basis?
What makes Mobile OTT Service popular?
OTT apps like WhatsApp, Skype, Facebook Messenger, Viber, Telegram are preferred among most users mainly because of availability of services free of charge through a richer user experience, and offering consumer sweet-spot features like cartoon stickers, emoticons etc.
In addition, OTT richer user experiences include users being able to send large pictures or videos instantly, create group chats and can even see when the other person is typing a reply. These kinds of features provide real-time and friendly interface experiences to the users. Really alluring for OTT customers, right?
So, what about Telco? What steps can operators plan, rather than their traditional services, to gain back their lost position to the robust customer base which is expected to surpass 5 billion by 2019?
Well, initially to avoid this one- sided influence of OTT players, Telecom Operators should plan to upgrade their traditional and costly SMS, Voice Call services as a precautionary measure.
What is the Solution?
Smart mobile operators have already realized that OTT in telecom can be an opportunity if they play their cards right at the right time. It’s high time, telecom industry followed the walkway of OTT companies and save their existence in the market! Instead of developing new features for their traditional services, Operators should focus on changes and build telco OTT apps.
And what if, with the help of OTT solution provider, telecom operators can build their own OTT app? Beside buying or partnering with OTT companies, the initiative of Telco introducing own Mobile OTT Service, will enable all Telco operators to prove their strong existence in the Market.
How? Telco Operators by providing an open, consistent, and globally interoperable messaging service to its robust customer base, in a very cost effective way like Mobile OTT Service, can rise-up to the number one position again.
In recent years, operators have also started testing the waters in the in-house content and app development space. Bharti Airtel is a pioneer in this area, and has launched various apps for songs, movies and gaming. However, recent star in this field is Indian operator Jio.
This Company has launched a slide of apps that are similar to popular apps like WhatsApp, Google Drive, iTunes and Apple Wallet in their features, but are more customized for the Indian users.
Now if a operator builds their own telecom OTT app with the help of solution provider, they have certain advantages.
How Telco OTT Apps will be useful for operators?
- Growth in revenue flow: Mobile operators can capitalize by enabling own OTT service to offset their declining revenues and it is very easy for them because operators already have strong customer base in the market. And, almost 16% of operators believe they will generate incremental revenue from OTT services. (Source- TelecomAsia)
- Deepen the relationship between customers and the operator’s brand: Launching an own OTT app can help operators to upraise loyalty, users feel relaxed as they get overall package by operators , creating an alluring point of differentiation for new operator customers.
- Offering wider features in smartphones: Telecom operators can provide chat-based games, mobile learning, smart ads and promotions which will also enrich their core products and offers to their customers.
- More customizable Interface for the customers: Building a bespoke OTT application in-house gives the operator complete control over it as well as the freedom to customize. If operators partner with any OTT company, they will need to follow some regulation which can be avoided by building app on your own.
- Building Relationship with other network subscribers: By developing own OTT app, a telecom operator can attract and build strong relationship with other network subscribers. This process can generate big amount of revenue with a strong customer base. For example, we can see the history of Airtel, the first operator to introduce in-house OTT services with the launch of Wynk Music, a carrier-agnostic mobile application in September 2014. Wynk Music offers an intense library of over 1.7 million songs in eight languages, which received an overwhelming response with about two-thirds of users accessing it through rival operator (non-Airtel) networks. Thus, such carrier-agnostic apps can help operators build relationships with the subscribers of other networks.
Why Telco Operators Should Go for OTT Solution Providers?
Telco Operators have three options to assess their OTT service strategies:
- Build own OTT app through customization with the help of solution providers
- Buy a ready and developed OTT system
- Partnering with existing OTT player(s).
Among the above three options, last two (Buying and Partnering) doesn’t come with full freedom to the owner. If any operator buys or be a partner with an existing OTT company, both parties need to follow and act based on shared agreement.
On the other hand, if a Telco operator builds its own OTT app through an OTT solution provider, it’s going to be a completely third-party control free solution. In addition, it is less risky than Telco companies trying to do everything on their own.
Because, if Telco companies do not set a team of extremely dedicated developers and a customer support center (which is a matter of high investment), it can bring a disastrous result for them.