OTTs: If You Can’t Beat ‘Em, Join ‘Em!
Business models such as over-the-top (OTT) video services offered by operators and content providers, applications for business and home broadband services, machine-to-machine (M2M) applications, and payment applications on mobile networks are transforming—and disrupting— telecommunications services.
The Competitive Intelligence Unit (CIU) defines an OTT platform as one “that transmits or broadcasts content to different devices—such as smartphones, tablets and Smart TVs—via the Internet. They do not require infrastructure for their transmission, but instead make use of Internet providers’ networks.”
In this sense, OTT services initially raised alarm bells for telecom operators when they began to compete directly with the services they traditionally offered: voice, text messaging, and paid TV. At first, these services presented a threat, as customers avoided using telecom services or paid TV in favor of similar services provided by websites or smartphone applications. Additionally, this traffic puts significant pressure on service provider networks.
Given this scenario, what would be the most appropriate response by operators? The simplest in operational terms would be to block or throttle traffic to OTT service providers; however, this could irritate customers and cause regulatory concerns with regard to net neutrality. But offering their own OTT services could strengthen relationships with customers, allowing them to infiltrate new markets, and gain new customers. Another option is to lower the prices of telecommunications services to make them more attractive than those of the OTT competition? But that does not seem to be enough.
It appears that the best response lies in the old strategy of if you can’t beat ‘em, join ‘em. In this way, operators are able to seize on the current success of the OTT model. These services have serious potential to transform the telecommunications industry. Also, telecom operators would be able to actively participate in this change, thus maintaining their importance for consumers and even uncovering new business opportunities.
During the 2017 Capacity Caribbean Conference, Paul Scott, president of C&W Networks, participated in a panel discussion that addressed this issue.
The bottom line is that, it is essential to have safe, intelligent and scalable networks. OTTs need capacity and bandwidth. They need C&W Networks.