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5G: Enabling a winning strategy for telcos and OTTs

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Content, entertainment, media, messaging, voip and much more all part of OTT ecosystem that telcos first saw as the drain on the network, then embraced as revenue and usage drivers for 4G. As we move into 5G will OTT services be one of the major revenue use cases for telcos in the 5G era?
5G: Enabling a winning strategy for telcos and OTTs

As cellular technology spanned and progressed to provide better versions of internet, software technologies paced equally and more to harness the underlying technology infrastructure. The story of OTT is one such indispensable use case of last decade that has grown exponentially. OTT bridged the gap of technology reachability to consumers all across the world in all walks of society. There are humongous OTT applications rendering messages, voice, and video, IOT etc. and all works on simple principle of delivery over FREE internet. Amazingly, the number OTT consumers very quickly exceeded 500 million and the curve is trending upwards at unprecedented speed. So what is behind all this? How is it different from traditional ways of communication? The answer is simple -OTT is an application level revolution that has disruptive influence on consumer mindset. It is all about delivery and content. It is multifaceted. It includes content, agility, accessibility, portability, usability, and delivers personalized user experiences. In 4G habitat, OTT bloomed fully and brought a social revolution such that it touched consumer lives. OTT Providers not only created a new vertical of revenue but also uplifted the society by laying strong mesh of connectivity. No doubt, OTT success has proven the power of software and the internet as a global and immediate delivery vehicle.

Fast forward to the OTT status of today. OTT has created digital layer on ISP pipes with never ending choices around content consumption. In grand scheme of things, ‘content’ plays very crucial role as the most popular OTT use case is entertainment. This means video traffic. And lots of it. It is speculated by 2021, worldwide OTT revenues will exceed $50B and alone video traffic will soar by more than 75%.  This is a conservative estimate on the basis of the OTT capabilities itself utilizing “Best Effort QOS” network bandwidth.

Interestingly enough, impulsive growth in OTT market is fueled by social networking and continuous smart devices penetration at large. Today entertainment uses vast variety of content including audio, video, messaging and live streaming.  But is all this OTT entertainment traffic too much too soon? Is there just too much traffic and does mean poorer quality? In fast track mode as internet traffic swells, issues like discrete content, fragmented communication, high subscription fees, bad quality and speed, information breach, unwanted advertising, interrupted user experience and some more are coming out as major concerns in consumer surveys revealing the dissatisfactory tones.  OTT Players have no control on traffic congestion and quality management over internet. And economically consumers end up paying more in OTT subscriptions combined as compared to basic internet plan. The infrastructure to provide high-speed data streaming and content war are emerging as biggest challenges for binary video industry today. With content delivery competition and fast growing smart devices, it is difficult to keep up with the pace of customer demand for on the go entertainment and constantly changing preferences.

Can all these traffic and experience issues be handled at business level itself? And the struggle is double sided anyways as traditional ways of communication and entertainment is fading and strongly challenged by OTT applications. Ironically, society is pacing towards ‘internet of things’ and internet is “Service Provider’s Thing”. Can telcos help?

Success in the OTT market needs broadcast quality experience across devices, extreme reliability, less latency, better speed and ease of access every time. This is where 5G architecture comes in play. It offers smart and secure digital network fabric with cloud native platforms, analytic tools and framework that enables monetization, while efficiently using precious spectrum. 5G Slicing and edge computing is a multi-fold concept that can support quality driven agile software solutions and at the same time handle gushing stream of bytes inherently by offering dedicated traffic lanes and this all can be controlled by network design laid by the telco. The benefits of 5G seem almost unbelievable: movies downloaded in seconds, flawless browsing, near-perfect live streaming, secure data access and more.

It looks like 4G is ready to relay OTT use cases that will open revenue doors for telcos. 5G span will definitely revive the meaning of “service” for providers and give them opportunity and responsibility much higher than just “pipe providers”.

5G can extend the telco footprint and has potential to give higher margins to offset their declining revenues and get fair share of OTT's future accelerated growth. Rich Content to better engagement, providers must take a proactive approach to deliver the quality experiences that keep audiences coming back for more.

Across the globe, telcos are investing in consolidated spectrum of content libraries to strengthen their position and better utilize their own networks with varied bundled offerings. Telco OTT services can potentially also open customer base in remote areas where broadband like technologies are still out of reach. Many telcos are also exploring idea of joining hands with OTT providers to add power of “quality, reliability and safety” to consumer experience and at the same time ‘bend the cost curve’. Probably it’s time to re-define “FREE” internet and add “good plumbing” to “Over the Top” stuff.

However time tells its saga, definitely OTT has enough to keep both consumers and telcos entertained.

Blog Author

Rita Mittal
Lead Engineer at Openet

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