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Has Facebook spoiled the party for OTTs and what does mean to mobile operators?

By July 12, 2018 No Comments

In the last few years the prevailing view at the time was mobile telcos just weren’t with it when compared with the new digital service companies like Facebook, Uber, Netflix and Amazon. The mobile telcos were too conservative, too old fashioned and not as cool as the OTTs. Their relative market capitalisations reflected this.

Then came Facebook and Cambridge Analytica.

Consumer trust and misuse of personal data became centre stage. News headlines cried out that personal consumer data from Facebook had been used to assist the Trump presidential campaign and the Brexit referendum in the UK.

So how did the Facebook data scandal impact consumer trust of OTTs and mobile operators? At Openet we commissioned Sapio Research to survey consumers on the levels of trust with OTTs and also mobile operators. Sapio ran the survey in June 2018 among 1500 consumers in Brazil, The Philippines, the UK and the US.

The main results are illustrated in the infographic below:

As mobile operators look to off-set declining traditional revenues some have got the cheque book out and bought up content companies. Some have developed content partnerships to sell more services to their customers.

The OTTs need the mobile operators and the mobile operators need the OTTs.

OTTs formed partnerships with the mobile operators to get a ready-made route to market and that all important monthly subscription fee bundled into a monthly mobile charge. Mobile operators formed partnerships with the OTTs to give them a wider range of services to sell to their customer base. When we first started seeing content partnerships a few years ago there was discussion about some of the cool brand from the OTTs rubbing off onto the mobile operators. Along with this hopeful optimism there was also the fear of the OTTs taking over. They’d own the customer relationship and the operators would be left providing wholesale capacity. The operators were on the back foot. As 4G matures and we await 5G, maybe things are starting to change.

The mobile operators still need the OTTs and content providers to drive customer engagement and give the operators something more to sell. However, as this research shows, the trend is towards the mobile operator to take a more prominent role in the digital value chain as one of the main assets they have is consumer trust. For services like streaming music and video, most consumers would prefer to deal with their mobile operator than deal with the OTTs direct. The reason? It goes back to mobile operators being trusted and not playing fast and loose with consumer data. People trust the mobile operators not to misuse and abuse their personal data.

For operators who are making the investment in their own content then this creates an ever bigger opportunity to be the main player in the value chain. One interesting aspect of this survey showed that as a direct result of the Facebook data scandal 34% of consumers are less trustful of other OTTs – not just social media providers.

One last stat from this research – 92% of consumers would be open to buying digital services from mobile operators. As long as the operators were transparent and didn’t abuse consumer data. That’s a significant opportunity.


Download the full research paper: Who do consumers trust most: OTTs or mobile operators?