Last updated: 20 March 2014
The space between operator delivered services and OTT providers has been one of “coopetition” at the best of times, and outright conflict at others.
This keynote session set up the leaders of major telcos – Deutsche Telekom, Korea Telecom, alongside network provider Ericsson and OTT provider Viber. The CEOs set the context for the evolution of the industry in a discussion that was vibrant and animated.
With OTT services user bases growing rapidly – the GSMA’s CMO Michael O’Hara reminded us of Skype’s 400m subscribers, Whatapp’s 200m and Viber’s CEO Talmon Marco pointed out their own user base was in excess of 175 million – there is a challenge to mobile operators to continue to deliver revenue growth when so many of their core services are being eroded.
Mr Lee, CEO of Korea Telecom, spoke passionately about the ways in which KT had escaped the cycle of margin erosion. Despite fixed voice revenues collapsing and the growth of OTT, KT is managing to accelerate growth of IP-based services. Thanks to the increasing growth of low-cost smartphones, the appetite for data-rich services is growing substantially and the increase in network speeds will give them further opportunities for growth.
Mr Obermann of DT expressed strong views on regulation, spectrum scarcity and the erosion of core telco revenues by OTT providers but also spoke positively about the notion of ‘Telco Plus’ – which will see smart technology-agnostic networks delivering a seamless experience to consumers. Efficient all-IP networks, using customized Quality of Service (without denying the principle of network neutrality) will be key to delivering a new generation of innovative services. These services will enable 3rd parties with open APIs, potentially using strong authentication, will differentiate from other offerings thanks to this with smart connectivity. This open culture will lead to a new category of coopetition with OTT players, leading to a new context for the communications market.
Mr. Vestberg, of Ericsson talked of the three possible roles of future mobile operators: as network developers, service enablers or service creators. He believes that the pace of change is going to increases as we continue to move into a networked economy.
Mr. Marco, CEO of Viber, was the only representative of the OTT community and had fairly strong views on both what traditional operators were doing as well as the effort of the GSMA and others to drive interoperability with new cross-network services. He was unimpressed with the lack of innovation from telcos, citing the fact that the core SMS product has remained unchanged since 2003: he was emphatic that there needed to be strategic cooperation between telcos and OTT providers to drive true differentiation as the mobile market transforms in the years ahead.
From a Gemalto perspective, this was a fascinating debate – the challenge of supporting the telcos in the delivery of services that will allow them to recoup their investments in 4G and beyond is complex and the different approaches that could be taken in the future are rich with possibility. We have a feeling we’ll be seeing more coopetition as providers seek to differentiate and OTT providers take advantage of more advanced smartphone platforms, open APIs and secure interoperability supported by strong authentication and the opportunities opened up with the delivery of 4G services.
