Mobile operators are all too aware of the impact that Over-the-Top (OTT) services such as Whatsapp, Viber, Netflix, and Facebook have had on their revenues in recent years. But to date, operators have not yet come up with an effective solution that addresses this competition.
Unfortunately, operators are in a Catch 22 situation. The demand for OTT services has given consumers a thirst for faster, more reliable data, pressuring operators to invest heavily in network speeds. But operators’ faster networks in turn enable OTTs to innovate further, enhancing and expanding their services – and pushing operators further down the value chain in the process.
At first glance, this game looks unwinnable for operators. So what’s the answer?
For operators, it’s time to change the game. It’s time to let go of their legacy business models and instead grasp an approach more suited to today’s digital communications landscape. It’s time to follow a new direction that lets them reap the benefits and stimulate new revenue streams. But how?
Operators must utilize and invest in their core asset: the network. Think about it this way – if OTTs are reliant on a network to deliver services, then surely the operator is in a prime commercial position? Yes and no. The reality is many operators are not yet prepared to do so. However, if the network were a marketplace, operators could activate commerce opportunities by providing additional services to customers and other businesses.
In order to achieve this there are a number of brave realizations and decisions that the operator needs to make to be successful. Rather than focusing on speed, operators must look to invest in capabilities that enable it to use the network as a marketplace. For this to happen, there’s a number of common building blocks that need to be in place before they can differentiate themselves from the fierce competition.
Here is a preview of some of the building blocks, taken from our latest whitepaper, that are essential for mobile operators to achieve digital communications success.
1. Service aggregation – Enabling other businesses is one way in which operators can use their networks to differentiate themselves. By investing in the ability to aggregate multiple services, from existing or new third party services, an operator can differentiate its offerings.
2. Universal identity management – When it comes to identity management, operators can capitalize on the unique position they occupy. They can offer network-level authentication, which offers a single, consistent and frictionless user experience for customers across all the services that they subscribe to.
3. User storage and personal cloud – Operators can also use their networks to provide cloud-based user storage to their subscribers, to enhance their user experience with “back up, sync, and restore” functionalities that can be accessed from anywhere, and on any connected device.
The proliferation of OTT service providers will continue to have an adverse effect on operators’ traditional revenues. If operators want to compete in today’s changed digital market, they need to expand their services and pursue new business models. But without these five building blocks as a foundation, operators will struggle to evolve their offerings and differentiate themselves from the competition.