Trump, ABBA, and European OTT Policy
“They gave me a defective mic,” Trump told reporters just after the first presidential debate in the US. He went on, “Did you notice that?” It seems like the Commission on Presidential Debates had also noticed it and declared that there were issues regarding Donald Trump’s audio which affected the sound level in the debate hall. This reminds me of another great debate in Europe where European operators have been asking the European Commission, “Did you notice that?”
The current debate in Europe is over OTT policy. The most important argument of telecom operators is that there is no level playing field between OTTs and operators. For those who are not familiar with the term, a level playing field is a concept in commerce where every player has the same chance to succeed. To avoid any unfair advantage and sustain a level playing field, every player in the industry has to adhere to a set of rules.
Honestly, I do subscribe to operators’ view of the field. There are several areas where operators are required to comply with more rigid rules than OTTs although they provide identical or similar services. User privacy, security, antitrust, net neutrality, significant market power… The list is long. Inequity comes with consequences. Since user privacy obligations are weaker, OTTs are able to monetise their services in different ways rather than depending on traditional subscription fees. For instance, operators cannot sell location-based ads due to privacy rules, whereas OTTs like Google and Facebook can. On top of that, operators have to invest huge amounts of capital to ensure that the security level of their data centers meet standards defined by the regulations.
Most OTTs offer their core services for free -in exchange for private data- enabling them to easily grow their user base. OTTs have easily gained considerable market power over operators who have higher maintenance costs and traditional pay-as-you-go fees, which in turn threaten both the industry and consumers.
While talking about consumers, it is also worth noting that OTTs have a tendency not to fulfill certain obligations that totally work in favor of consumers. For instance, pure VoIP services like Microsoft’s Skype do not support access to emergency services. Not only are operators required to allow users to make emergency calls free of charge, but they also have to make sure that their services are running 24/7. Although the added cost is immense, benefits to consumers are indisputable.
Apparently, Europe focuses more on the startup’s aspect of the discussion. Europe thinks that if startups were obliged to comply with the same regulations as operators, it would be a great disadvantage for European startups over those from Silicon Valley. However, sooner or later Europe has to ensure that there is a level playing ground for every player in the telecommunications industry. Europe will either scale up the regulations and make them valid for every player or scale them down and conciliate operators by making a concession.
Europe protects consumers and should keep protecting them. Europe values consumer rights which include privacy and should keep valuing them. I understand that the regulations belong to a time before the social media era and should be revised. However, to sacrifice consumer rights and protect consumers in order to find the middle ground would not be beneficial to any of the parties, especially operators.
Going back to our debate example, I would say, operators are more like ABBA rather than Trump. ABBA would have won the Eurovision with their performance of Waterloo in 1974 whether or not their mic had worked. Due to a regulated industry, operators have built a trustworthy environment with high quality services. Regulations have kept their services away from being cheap and dirty. Operators are ABBAs of the industry and I believe that they would make better OTTs if they start thinking like OTTs with telecommunication licenses. Let me tell you why.
First of all, operators own the network. Wait, I do not mean that they should make OTT services inaccessible. Abilities like fixed-mobile convergence and mobile presence information are only possible if the service providers own the network. With the help of these unique abilities, operators can deliver better user experience to their customers with no need for additional third-party apps. Native apps of any phone (does not even have to be a smartphone) are always at the service of operators.
In addition, operators are still the best choice for applications that require usage of sensitive data like enterprise communication tools. Thanks to Europe’s privacy and security policies, operators make sure that your data is secure and not shared or used for any other purpose. Do not forget to give our Carrier Cloud series 1 & 2 a second look.
Finally, operators have their own advanced directories. They can make use of them to develop new services like anonymous communications and to create additional value for their customers.
Ease of entry makes the market more crowded and noisy every day. The biggest challenge now is to differentiate what is relatively easier for operators. Attempts to exploit these unfair advantages would help operators find new blue oceans. We, at ECT, develop products with a focus on unique value that operators add. Would you like to find out more? Go ahead and get in touch! We would be happy to hear from you.
