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Telco-OTT innovation

by Digital Studio Middle East Staff on Jun 14, 2017

The OTT communications model is gradually moving towards a revenue generation model for both telcos and OTT players.
The OTT communications model is gradually moving towards a revenue generation model for both telcos and OTT players.

DB: What are three main areas in which OTT players seek cooperation from telcos and what are three main areas in which telcos seek cooperation from OTT players?

Bartosch: In terms of OTT players, the control for Quality of Service (QoS) for services such as speed and latency. Provision of a flat bandwidth of pricing to stimulate the consumption of video – possibly as a wholesale deal where OTTs would include the bandwidth cost into customers’ bill (e.g. Netflix) – and net neutrality or fair access for all OTTs. Regarding telcos, the provision of revenue share in exchange for providing QoS base bandwidth, ability to shape traffic and act as a single stop shop to customers, including the billing relationship.

Haysom: OTT players need a world class carrier to ensure their product is the best for their end users. Telcos with superior networks attract customers due to the high performance and wide reach. Telcos can also simplify the payment processes for OTTs via direct carrier billing enabling them to focus purely on delivering their content in their ecosystem and let the carrier partner take care of the network and billing.

Hammoud: In my opinion, OTT players’ primary needs from the telcos are access quality, customer data and operational support (e.g. direct operator billing).  On the other hand, telecom operators’ basic needs from OTTs are differentiation in products and services, better monetisation of existing data propositions and new revenue streams.

Sheikh: The type of collaboration we are looking for is more on the marketing side. Telcos are the touch-points to the customers, so they can access the customers much more easily than we can. So, we rely heavily on them for marketing the service to their customers.

Tibi: OTT services become the video-on-demand arm for the telecom operators and OTT services can leverage telco infrastructure for localised billing purposes. This gives telecom operators another opportunity to increase the ARPU for data consumption and make legal streaming available to a wide audience.

DB: Are there too many OTT players in the market? If so, is this a bad situation?

Bartosch: We believe that the OTT ecosystem differs from the telco ecosystem, in that it lives on rapid innovation, agility and trial and error. A healthy OTT ecosystem requires many players to preserve this agility.  From a traffic and content perspective, 60% of the fixed and mobile access traffic in most markets comes from the top 10 OTTs, such as Google, Facebook and Netflix, hence a few players are dominating the market. Many OTT players help telcos to avoid dependence of a few “super” OTTs.

Haysom: It’s always good to have more choices for customers and as a telco it gives us the ability to see what’s working and what’s not in the growing local OTT scene.  We have a very strong OTT proposition with eLife ON and our customer are already engaging with the service, as other OTTs grow in popularity we are able to grow with them either organically through mobile data plans or together as partners in a B2B2C mode.

Hammoud: Too many OTT players mean a wide range of choices for the customers. The wisdom of digital market is that it’s brutally honest in allowing only the best ones to survive. We are always looking for the best value for the customer and try to establish the right partnerships with the OTTs that we fully believe can deliver this promise. Zain’s recent engagements in media, advertising and shared economy services are very nice examples to this.

Tibi: The arrival of new OTT players in the market has actually helped raise more awareness and curiosity of Icflix amongst viewers. Also, with the rise of streaming services in the region, audiences will now be more inclined to subscribe to multiple streaming services as this will give them a wider choice of content to choose from, making entertainment options for the entire family limitless.


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