Operators' attitudes towards so-called over-the-top (OTT) businesses such as Skype and What’s App are changing, with networks seeing them as potential partners rather than threats.
A lot of OTT businesses offer the same services as conventional networks, such as voice and text, but without the operator receiving any revenue for their use. However, a new survey into the OTT sector said its reputation was softening among the more traditional networks. It showed that 70% of service providers see these businesses as potential partners, rather than a threat. OTT businesses’ reputation is growing, with 64% of service providers saying they bring innovation to the industry.
Amdocs’ Jonah Pransky, who wrote the report, said: ‘Operators are now looking at OTT as innovators and either potential partners or someone they can imitate to improve upon their service.’ He cited Telefonica, which bought Voice over Internet Protocol companyJajah in 2009, a move that led to its development of Tu Me, which is seen as a rival to Skype. He also said Three’s partnership with Skype was another example of how networks can work with perceived threats. He said: ‘We thought the conventional wisdom was that OTT was seen as the biggest threat to telecoms companies, but now operators seem to be taking a longer view.’
Pransky said OTT companies had a respect for service providers’ strengths, which meant more partnerships seemed likely. Networks were seen as having strong brands, quality networks and a broad breadth of customer data. Around 40% of networks said they explored these partnerships as a means of broadening their reach, while 34% said they were a tool to develop new products and services. OTT players saw these partnerships as crucial to their future, with 69% saying they were important for their ability to compete and survive. Parnsky said: ‘OTT players do not seem to think they were in a position to take over the industry.’
He said he felt the reason why attitudes had softened was because networks were more confident of providing alternatives to OTT players, such as Tu Me, to compete against Skype and What’s App. He said: ‘Perhaps it’s because the initial wave of shock to the system has passed and now we are seeing service providers take into account in their portfolio of services what OTT can offer. The survey found 42% of service providers said they can do anything OTT players can do and do it better.’
Ian Parkes from research agency Coleman Parkes, which conducted the survey, said: ‘It’s a whole new relationship for service providers. While service providers used to form partnerships mainly for roaming and with device manufacturers, today they must navigate a complex environment full of over-the-top, internet, financial settlement and other players.
‘Our research goal was to explore this new world, and we were surprised that service providers view OTT players as an opportunity, not a threat, and by the broad agreement on the value of services providers’ core assets.’