OTT Apps: Time To Beat 'Em or Join 'Em
Mobile communication service providers (CSPs) worldwide are facing a rising threat to their business model with the advent of disruptive technologies and applications. The rise of over-the-top (OTT) players like Skype, WhatsApp, Facebook, Snapchat and Viber are having adverse impact on voice and SMS traffic, revenues, customer mindshare and brand image. CSPs are facing a constant decline in their ARPU and experiencing customer churn.
OTT players provide their services using the underlying infrastructure set up by CSPs. This doesn't affect the basic services of CSPs, but it has reduced them to just a fat dumb pipe. The majority of OTT services are Internet-centric and have increased the data traffic in the CSP's network exponentially, which they never expected and were never ready to face. As CSPs do not have the infrastructure in place to tackle this data upsurge, the result is both a poor quality of service and user experience.
It's not all bad news, however. There are a number of ways that CSPs can fight back, namely:
- OTT Partner: Operators can partner with an OTT player and add value to a service by providing their users unmetered telco-OTT transaction from the partner service, so existing data plans are not impacted. This supports faster introduction of services, but operators would not have control over the direction or quality of service, which may weaken customer relationships.
- Private Label Partners: CSPs can choose to label a privately owned third-party OTT service with their brand name, which greatly improve the time to market. In the long term, the operator may choose to migrate or recreate the service in-house as per the business needs and cost structure.
IPX eco system with common interconnection model and roaming bilateral agreement will underpin end-to-end mapping of "IP classes of service." Mobile operators can provide consistent customer experience even on partner systems to support the rising use of service level agreements and the introduction of tariffs tiered by quality-of-service levels on a global scale.
However, RCSe is still an immature technology; while a number of operators have adopted the technology, penetration is still slow. The industry needs to develop the RCSe ecosystem further to provide a diverse range of service offerings and products to the customers.
Once successful and adopted fully the approach would allow operators to offer new services with attractive pricing plans to compete with third-party OTT services on both WiFi and mobile networks. This could halt the dilution of operator brands that third-party OTT services have caused -- WATCH OUT.
— Ravi Palepu, Head of Telco Solutions, Virtusa