Too few operators have formulated a coherent telco OTT strategy

on . Posted in News Analysis

With LTE round the corner, mobile operators must take on OTT players.

They have tolerated networks being used to deliver bandwidth hungry IP based applications with little compensation. That model must change.

If telcos want to be more than simply pipe/utility providers, they must move into creating and delivering a suite of attractive and innovative applications.

“MNOs won’t succeed if they go head-to-head with OTTs,” Ken Kolderup, chief marketing officer at Kineto Wireless told Mobile Europe.

“The best tack is to leverage and build on existing strengths. The business model is shifting to mobile data and operators must reintroduce voice and SMS in more modern ways; add advertising and video to create a richer user experience. RCS is the right technology to use especially for ubiquity and introducing new capabilities on existing services.”

Telco OTT is potentially lucrative: the market is there, OTT players succeeding and consumer appetite for smartphones undiminished.

Telcos must explore new ways of monetising services and offer innovative solutions fast.

“Operators face an existential crisis as their geographically–based network business models strain to adapt to a new wave of competition at the service layer – operators with serious ambitions to compete in the service layer should look at telco OTT,” Stephen Sale, principal analyst for voice/messaging, Analysys Mason explained.

He suggests too few operators formulate a coherent strategy. Retail services may be complemented by opening platforms to third parties, for example.

Telco OTT services, explains Analysys Mason’s recent report, fall into four broad categories: WiFi voice; one number/multiple devices; IP-based messaging or advanced call management. Advanced telco OTT services combine elements of all four.

Operators must choose their battleground carefully, invest in core communication services to stay relevant to consumers and build on core competencies to differentiate themselves against OS and application providers.

They should decide how and whether to compete with OTT players, consider available technologies, standards, time-to-market, whether to partner and the commercial business case, recommends Analysys Mason.

They must also be realistic about their ability to innovate in a fast moving/changing market and anticipate future challenges rather than reacting to yesterday’s news.

Kineto Wireless’ Smart Comms RCS based technology gives operators a single user-friendly, own-brand shop front.

Operators can exploit the flexibility and benefits of IP networks and RCS standards and deliver those to customers over phones, tablets and PCs. Users log into one interface to access a whole suite of multimedia applications. Subscribers can view all interactions instantly and operators more easily enrich existing or develop new multimedia services.

“Operators need faster reactions; restructure for success; cannibalise existing services and look for ways to regrow,” Kolderup continued.

“OTT players will continue to do what they do best – react fast and innovatively. In a world of multi-application IP connected devices, operators must worry about branding and user experience.”