Telecom’s Adaptive Strategies in the Face of OTT Disruption
The telecommunication landscape has experienced tremendous shifts over the past decade. One of the most significant changes has been the emergence and dominance of Over-the-Top (OTT) services. These platforms bypass traditional distribution channels, connecting users directly through the internet, often at reduced costs. OTT services have become so popular that telecom operators worldwide are being forced to adapt, innovate, or be left behind.
Embracing vs. Competing
Given OTT’s rapid proliferation, telecoms are at a crossroads: compete or collaborate? The decisions made have diverse outcomes.
1. Collaboration and Partnerships:
— India: Jio, a telecom giant, combined forces with OTT platforms. They offered bundled services where a subscription to Jio came with free access to various OTT services, from music streaming to TV shows. One of their OTT offerings, JioCinema app has forayed into live sports as well, including IPL (India’s most famous domestic cricket league) resulting in a massive subscriber gain for the app which in turn is resulting in Jio monetising JioCInema with subscription tiers
— Europe: Telefonica in Spain collaborated with Netflix to incorporate the streaming service into its pay-TV offering, making it easier for users to access both traditional and OTT content.
2. Launching In-House OTT Services:
— USA: AT&T’s acquisition of Time Warner led to the launch of HBO Max, its flagship streaming service.
— Middle East: Etisalat (e&) launched eLife, offering on-demand movies, series, and TV channels through an OTT service.
3. Enhancing Infrastructure:
— Recognising the increased data usage due to OTT, many telecoms are heavily investing in network expansion and 5G to provide seamless streaming experiences.
4. Competitive Pricing:
— In markets like Africa, where the OTT revolution is still burgeoning, telecoms are cutting down data prices to deter users from switching exclusively to OTT.
Challenges and the Road Ahead
While OTT offers an ocean of opportunities, it’s not without challenges.
- Regulation: In regions like the Middle East, VoIP services were initially blocked. Only when telecom operators launched their own OTT services or collaborations did they open up.
- Revenue Streams: With SMS and traditional voice revenues dwindling, telecoms need to innovate in offering bundled services, digital ads, and tailored content.
- Quality of Service (QoS): As OTT services consume significant bandwidth, maintaining a high QoS is paramount. Telecoms are hence investing heavily in infrastructure upgrades which in turns translates to higher CAPEX spends
Conclusion
The future of communication is undeniably intertwined with OTT. As boundaries between traditional telecom services and OTT blur, the industry’s landscape will witness innovations, collaborations, and perhaps a few disruptions. For consumers, this means more choices, better quality, and an ever-evolving digital experience. For telecom operators, it’s a clarion call to innovate or risk obsolescence. The OTT wave is here to stay, and telecoms need to surf it adeptly to succeed.
