Holding back the OTT tide – Time to jump in the water

People in telcos using the term “OTT” should be fired! – Dean Bubley

Whilst viewing Dean Bubley’s perceptive OTT interview from the recent Great Telco Debate my eye was drawn to a side bar video How telcos can fight back against “OTT hijacking” . ‘OTT hijack’ is described as incoming international call revenue/tax fraud committed by applications, such as WhatsApp, terminating calls as VoIP made by a traditional phone in another country. In contrast, an international WhatsApp to WhatsApp OTT VoIP call is perfectly legal.

OTT is bits of the internet that a telco doesn’t like – Dean Bubley

Like King Canute attempting to hold and turn back the tide, telcos are being encouraged to believe that they can hold back the inevitable commoditisation and decline of traditional telephony revenue in the world of ubiquitous internet. If we were told that we could not use digital cameras to take still photos (but could take video) because tax revenue and Kodak’s franchise from 35mm film was jeopardised, we would rightly laugh. Yet the telco equivalent is taken very seriously in many parts of the world.

Before becoming too smug  in our ‘developed’ European/NA world, it’s worth pointing out that telcos here have still not found a replacement for the loss of telephony revenue to other communication applications. Whilst the active prevention of Skype, Viber et al. is not happening, we still see only a grudging acceptance (and latent antagonism) to these applications. There is no selling of the telco value-add that could make a WhatsApp conversation a better experience, such as higher voice/video quality. Therefore no revenue is gained from these applications and their very different business models.

Telcos need to think actively about how they can better enable and differentiate all communications applications, not just their own.

Telcos need to think actively about how they can better enable and differentiate all communications applications, not just their own. Much of this will need to be through the more active exposure of the capabilities bound up in existing network and management systems to the outside world. Whether in IoT, adjacent verticals or web-scale applications, the ability of a telco to insert themselves into new value chains will ultimately determine whether they become bandwidth utilities or network enabling platforms.

For many telcos in ‘developing’ countries, now is the most opportune moment to gain from partnership with social networks and communication applications. Unlike the NA/European ‘developed’ market, the limits on data capacity and market dominance still favours the in-country telco.  Instead of fighting the inevitable incoming tide, by preventing ‘OTT hijack’, now is probably the best moment to jump in the water and work with the new communication platforms to create value.

Image: freeimages.com/mailsparky