New telco value chain should include over-the-top players: Ovum

New telco value chain should include over-the-top players: Ovum

Claims operators need to rethink their business models

Mobile network operators (MNOs) need to collaborate with content partners and over-the-top (OTT) players if they intend to dodge the risk of uncontrolled revenue loss, according to research analyst firm, Ovum.

In its latest report, Mobile Operator Strategies for Defending Against OTT Competition, it said operators need to rethink their business models and become part of the OTT value chain.

Ovum telco strategy senior analyst, Nicole McCormick, said operators need to be more realistic and recognise that the OTT community is a meaningful threat to revenues.

“The erosion of messaging revenues is already a reality in markets such as China and South Korea, and this is a harbinger of similar changes elsewhere.

“Operators need to re-evaluate their business models, and decide on the degree to which they should compete or collaborate with content providers and OTT players,” she said.

Ovum suggests that operators that collaborate more could potentially spend less on their own services.

It said although other large operators will continue to invest heavily in new services as a point of differentiation, they will also need to openly collaborate with content providers and OTT players in order to get the best of both new worlds.

“Operators that have been slow to re-think their existing business models must act or they will risk the uncontrolled loss of revenues to OTT players. Revenue loss in traditional services is unavoidable, but there are new revenues available if MNOs can find common ground with OTT players,” McCormick said.

Ovum mentioned operators should also go one step further and view the world from the consumer's perspective as most of the time they fail to see issues through the eyes of the average consumer.

As not all MNOs can afford to invest in developing their own services and related R&D facilities, nor do they have the resources to occupy the high end of the value chain or invest in platforms such as content delivery networks, sophisticated billing systems, and Cloud computing, Ovum said the key is to get the right mix between investment in content, collaboration, and platforms.

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