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OTT partnerships – The models emerge

By October 1, 2014 No Comments

A huge number of customers do not know – and therefore fear – how much data they are using. According to a quote from the paper, ‘in April 2014 Wakefield Research carried out a survey of 1,000 U.S. smartphone users on behalf of Citrix, and found that 82% say they are “aware of and fear that their app usage impacts the monthly data limit and have avoided using an app because of this”.’

The trick then must be to get beyond data and offer predictable, clear products so that customers know that they are not going to suffer the sickly effects of bill shock.

The good news is that this is beginning to happen. The paper describes several examples that are emerging, which is good for customers and also proof that operators are, after all, able, willing and keen to innovate.

Innovation is happening at every level of bandwidth consumption. Innovation at a messaging level is demonstrated by ePlus in Germany offering free WhatsApp to its prepaid customers, even when they run out of credit. Moving ‘up’ the scale, the paper looks at music as an example of service bundling, citing Spotify and Deezer, innovating with various operators. Napster now believes that 80 percent of its music is listened to on mobile devices. An amazing turn around for the music industry and an opportunity for operators to enhance their brand and reach.

Video is clearly the bandwidth monster, and the most likely to cause problems with bill shock. Doing everyday things on a smartphone would only leave you just six minutes of video a day before you used a 4Gb package. Possibly the best example of innovation in this area is Bell Mobility in Canada, who offer 10 hours of video a month for $5, without any impact on data allowances. This seems to be a ‘proper’ solution to the data problem.

There are clearly good reasons that operators should work with OTT players and the win-win relationships are beginning to be fully understood. OTT players benefit from operators’ long standing customer relationships; regular billing and subscription habits; flexible charging models to enable offers; flexibility in delivery to ensure the best quality and customer analytics and insights. And in some cases, such as music, they also get a new and eager channel and brand through which to distribute their wares.

Some things are now clear. Partnerships will be critical for operators’ future, from OTT players, payments providers and a host of vertical partners in the Internet of Things (IoT) world.

Perhaps, though, the most important area will be the OTT opportunity, since, ironically, it was OTT players who finally pushed operators into rebuilding and opening up their BSS infrastructures.

It has taken several years for operators to move from viewing OTT players as their doom (and traditional revenues will continue to drop) to viewing them as their saviour. As one operator, looking at two year transformation project said, “we must now behave like Internet players otherwise we will fail,” and he worked for a large operator.

He was right, OTT players are becoming operators’ salvation and more and more examples like those presented in this Openet paper will emerge.

A good read!

Download the White Paper titled ‘Content and OTT Opportunities’ here