Telcos to focus on content, collaboration, platforms

by CXOtoday News Desk    Sep 12, 2012

Mobile networkMobile network operators (MNOs) should collaborate with content partners and over-the-top (OTT) players in order to avoid the risk of uncontrolled revenue loss, says research and analyst firm Ovum. In a recent report released by Ovum, the analyst firm noted that operators need to rethink their business models and become part of the OTT value chain.

“Operators need to be more realistic and recognise that the OTT community is a meaningful threat to revenues,” said Nicole McCormick, Senior Analyst, Telco Strategy at Ovum. He believes that the erosion of messaging revenues is already a reality in markets such in several Asian countries, and this is a harbinger of similar changes elsewhere. Operators need to therefore decide on the degree to which they can compete or collaborate with content providers and OTT players.

Operators that collaborate more can save on their operational costs or services. Large operators are expected to invest heavily in new services as a point of differentiation, but will also need to openly collaborate with content providers and OTT players in order to get the best of both new worlds.

According to McCormick, “Today is more about compete and collaborate. Therefore, 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. A divide is emerging in Asia between those operators that are well on their way to a ‘compete and collaborate’ transformation and those that are not.”

Ovum said that the problem with operators is that they often fail to view the problems or issues from the consumer’s perspective. They should adopt a smarter and more open approach to partnerships with content providers and OTT players as well as a more consumer-centric attitude.

Even though the analyst firm agreed that not all MNOs can afford to invest in developing their own services and related R&D facilities, Ovum adviced that they should invest in cost effective and innovative platforms such as content delivery networks , M2M, sophisticated billing systems and cloud computing.

“The trick is to get the right mix between investment in content, collaboration, and platforms. This requires each operator to be realistic about its place in the new value chain,” concluded McCormick.