Telstra Global MD Martijn Blanken: OTT will eat revenue of retail telecom operators

Telecom Lead @ CommunicAsia: Telstra Global Managing Director Martijn Blanken says OTT will eat into the revenues of retail telecom operators and these organizations must fight hard in these markets to maintain their position.

The threat from over the top (OTT) players is very real in some sectors but for everyone else there is enormous potential.

Earlier ABI Research said OTT revenue is expected to touch $32 billion by 2017 from the expected $8.2 billion in 2012. Subscription services, like Netflix, have led the OTT markets in the past couple of years. By 2014, OTT rentals will surpass subscription revenues.

“Connected CE and mobile devices continue to push consumer behavior towards newer forms of media distribution like OTT and multiscreen services. Pay TV services will continue to thrive, by implementing multiscreen services and supporting OTT content. In the end we expect an amalgamation of services that complement each other for many consumers,” said ABI Research Practice director Sam Rosen, in an earlier report.

“But in other markets OTT providers should be helped. They are driving utilization on networks and platforms and are actually boosting revenues,” Telstra Global  said at CommunicAsia 2013.

According to him, the best way to achieve success is by focusing on customer experience to achieve financial outperformance and working in concert with partners.

Speaking at CommunicAsia 2013, Telstra Global chief also clarified a number of myths in the industry.

Blanken told his audience that many notions, including the concept of dumb pipes and ‘owning’ the customer being a certain path to financial success, are myths proliferated within the industry.

“Core telecom basics will always remain. The best way to achieve success is by focusing on customer experience to achieve financial outperformance and working in concert with partners,” said Blanken.

He pointed out that getting the basic elements right, like having solid network coverage, is a pre-requisite to success, along with ensuring secure and high quality services.

His key message was clear and loud: “not everything can be done in house.”

For him, determining which markets telcos can win in and committing to them is key. He also noted that a focus on quality over cost will always be most beneficial to the business.

“You can’t cost-save your way to sustainable shareholder value. There are many examples where incumbents are stuck between a rock and a hard place. I believe that for those markets where you can’t win, wholesale is better than no sale.”

Telstra Global says embracing partnerships and driving quality of service will enable differentiation, forging the path for the telco of the future.


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