How telecoms can handle OTT challenges

The telecom marketplace is changing rapidly and mobile operators must remain responsive in order to handle challenges from OTT players.

Customers value access to data more than they do voice. Though service providers may not own OTT services, they are still expected to provide superior user experience and performance when their subscribers use them.

The ongoing rise in OTT players is creating a challenge for telecom operators that are not earning any extra income off of the additional bandwidth that users are demanding. In order to deal with this, telecommunications providers need to shift from legacy voice-centric strategies to data-driven plans. Along with this, operators should look at expanding their data-carrying capacity to provide superior service to both existing and new subscribers.

With the consumers’ ever-increasing demand for data, telecom providers cannot afford to ignore OTT services. In order to compete with existing OTT players, telecom providers can start providing high-quality, value-added services such as HD video conferencing or mobile office environments. Telecommunications providers must deliver these services quickly— a new technology roll-out needs to take months, not years. Reducing time to market will allow players to remain at the forefront of innovation in the minds of consumers. The next big thing will be here next year, not next decade.

According to CA Technologies, a key to success in developing these new services is building a brand that’s known for innovation. To remain relevant, telecom operators cannot simply offer the same things as every other player. They must differentiate themselves by investing in the business intelligence necessary to understand consumer wishes before their competitors and then using that knowledge to build applications and delivery models that customers want to purchase. Part of this will be adding features that other players cannot match, such as enhanced performance and uptime and exclusive content.

With data usage on the rise, telecommunications operators need to examine their existing framework and make adaptations to increase flexibility and reliability when necessary. Choosing controlled and scalable carrier-grade servers can help with this, as can capitalizing on new concepts, such as cloud-based solutions machine-to-machine (M2M) connectivity.

Cross Platform social messaging apps

With all the new service rollouts happening and changes taking place, operators must be sure to control the costs of the current solutions so they can invest in what’s coming next. Developing scalable services now can help manage future costs, since operators will be able to react rapidly to market changes.

The rise of cross-platform social messaging apps will increasingly threaten the influence and stickiness of conventional social networks in 2014 and beyond. It is a potentially transformative trend that will see increasing numbers of app developers looking to re-orientate their social integration strategies to facilitate messaging and content sharing with communities outside of Facebook, Twitter and other more established social networks.

Recommendations to OTT providers

Canalys Senior Analyst Tim Shepherd says that it is important to understand that consumers are not using these services solely as a free-to-send alternative to SMS and MMS. They also are increasingly where users turn for group messaging, and for sharing photos, links and other content, and are the communities where their friends and contacts are most easily and verifiably reachable. While features vary, cross-platform messaging apps are essentially bare-bones social networks in their own right.

It is reasonable to assume that as a user’s social interaction and engagement with these services grows, it will often leave a correspondingly diminished level of engagement and interest in services such as Facebook. Social networking companies will need to respond to this competition with a renewed focus on the quality of the user experience they offer, and look to add value through feature innovations and enhancements, or else risk user attention being wholly or partially lured away.

WhatsApp has in excess of 350 million active users around the world, with services such as WeChat and Line also boasting hundreds of millions of users.

Canalys App Interrogator research shows that in almost all markets, several titles of this type are consistently among the top free apps. In a snapshot survey made on 30 November 2013, leading cross-platform social messaging apps appeared among the top 20 free iPhone apps in the Apple App Store in 57 of the 58 markets Canalys tracks – and there were between two and five in the top 20 lists in 38 of those markets.

In the US, picture-messaging app Snapchat, as well as WhatsApp, Kik Messenger, BBM and Viber were all among the top 50 free iPhone apps in the Apple App Store in November 2013, while Snapchat, Kik Messenger and WhatsApp made the top 50 free titles in Google Play too. Collectively, active users of cross-platform social messaging apps already number around 1.5 billion – albeit with some individuals using multiple services – and are set to surpass 2 billion in 2014.

OTT forecast

It is not uncommon for consumers to have several different messaging clients on their mobile devices to ensure they can reach all their contacts and make the most of the different features and functionality on offer, from free VoIP to social games to media sharing. Consumers are showing that their loyalty to specific socially-oriented services cannot be relied upon and leading social networking companies should heed the warning to guard against complacency.

According to Voxofon, hyper-specialization of OTT communication apps will drive the introduction and viral adoption of new categories of communication and social networking apps. Considering the advantage of being the first mover in any market segment, those who can identify emerging needs and rapidly deploy new tools will have a tremendous competitive advantage.

OTT communication apps will see significant growth in Application-to-Person (A2P) messaging apps and use-cases. As the use of our devices becomes more ingrained into our daily existence, the world around us — our automobile, toll booth, parking meter and navigation system to name a few just during the drive to or from the office — will interact with our devices to enhance our experiences by making life more simple and comfortable.

“On the surface, the hyper-specialization of apps might seem counter-intuitive in an era of device consolidation, but highly specialized apps enable users to outfit their connected devices with the specific set of functionalities they want, which is what makes device consolidation practical,” said Alexey Goloshubin, CEO of Voxofon.

The telecom ecosystem will experience significant horizontal fragmentation, prompting carriers to launch new services and adopt new sources of revenue. In 2014, we will see carriers introduce new data-only plans, support a range of connected devices, and introduce OTT services that complement their current model.