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Telcos Voice Their OTT Anxiety

SHANGHAI -- Mobile Asia Expo 2012 -- IP networking might permeate telco infrastructure and packet traffic may dominate their networks, but operators and the Internet have a wary relationship.

Right now it's the mobile carriers that are feeling the most threatened by Internet applications, most commonly referred to as OTT (over-the-top) services.

At a GSM Association (GSMA) gathering here on Wednesday, chairman Franco Bernabè warned about the security threat posed by OTT services such as video, instant messaging and VoIP.

"The emergence of OTT players means security and privacy are becoming increasingly challenging and in some cases impossible," he said in his keynote address. (See Telecom Italia CEO to Lead GSMA.)

He noted that the GSM industry had built in strong privacy and security protections since it began the migration from analog to digital: "The mobile industry is based on standards designed to provide maximum security for our end-users."

But with the convergence of the Internet and mobile, "security is increasingly at risk as management moves slowly from the center of the network" to the edge, the Telecom Italia (TIM) chairman stated. "We are starting to see in the mobile environment threats similar to those seen in the Internet. We need to look at ways to leverage assets of mobile, such as authentication."

And in a call to arms, he appealed to mobile industry decision-makers to "passionately defend the core elements that have ensured our previous waves of success … such as security and interoperability."

Terms of engagement
Elsewhere during the conference, a CTO panel identified the OTT threat as high among their concerns but a Chinese OTT firm complained about a lack of cooperation.

Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) CTO Hugh Bradlow said partnerships with OTT services were "an inevitable trend in the industry," but added that they would be based on telcos ensuring consistency and reliability in return for a commercial deal. Choi Jin Sung of SK Telecom (Nasdaq: SKM) said working with Internet players was akin to "sleeping with the enemy," but conceded that the operator's job is to satisfy the needs of customers. "If the customers want an OTT service we have to let them use it" he said. "On the other hand, we need to secure our business models and not be jeopardized by those OTT players."

As an example, Choi flagged up SKT's planned launch of an RCS-based instant messaging service to rival free messaging apps, something that operators in Spain are already doing. (See Spanish Telcos Joyn Forces to Tackle OTT Threat .)

However, Leo Jian Yao, CTO of NYSE-listed Chinese online video service Youku, said the operators aren't committed to cooperation. "We do not have good collaboration," he complained, noting that while handset players want to work with Youku, and customers are demanding access to the company's content via their mobile devices, operators refused to play ball.

He added that Chinese customers often don't have a credit card and prefer to pay via their phone bill, but operators "are reluctant to work with us -- they wish to do everything themselves. So for us there are many opportunities, and many opportunities for working with the carrier. What is needed is more in-depth collaboration."

— Robert Clark, contributing editor, special to Light Reading

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