Thursday, September 13th, 2012 - OVUM
Melbourne, 12 September 2012 – Mobile network operators (MNOs) need to collaborate with content partners and over-the-top (OTT) players if they want to avoid the risk of uncontrolled revenue loss, says Ovum.

In a new report*, the independent telecoms analyst firm states that operators need to rethink their business models and become part of the OTT value chain.

Nicole McCormick, Senior Analyst, Telco Strategy at Ovum, says: “Operators need to be more realistic and recognise that the OTT community is a meaningful threat to revenues.”

“The erosion of messaging revenues is already a reality in markets such as China and South Korea, and this is a harbinger of similar changes elsewhere. Operators need to re-evaluate their business models, and decide on the degree to which they should compete or collaborate with content providers and OTT players.”

Operators that collaborate more could potentially spend less on their own services. Other large operators will continue to invest heavily in new services as a point of differentiation, but will also need to openly collaborate with content providers and OTT players in order to get the best of both new worlds.

McCormick adds: “Today is more about compete and collaborate. Therefore, operators that have been slow to re-think their existing business models must act or they will risk the uncontrolled loss of revenues to OTT players. Revenue loss in traditional services is unavoidable, but there are new revenues available if MNOs can find common ground with OTT players. A divide is emerging in Asia between those operators that are well on their way to a ‘compete and collaborate’ transformation and those that are not.”

Operators should also go one step further and view the world from the consumer's perspective as most of the time they fail to see issues through the eyes of the average consumer. Ovum believes that a more open approach to partnerships with content providers and OTT players, and a more consumer-centric attitude, is a smarter business strategy for operators.

Not all MNOs can afford to invest in developing their own services and related R&D facilities. Nor do all operators have the resources to occupy the high end of the value chain as SMART (services, management, applications, relationships, and technology) players or invest in platforms such as content delivery networks , M2M, sophisticated billing systems, and cloud computing.

“The trick is to get the right mix between investment in content, collaboration, and platforms. This requires each operator to be realistic about its place in the new value chain,” concludes McCormick.

---ENDS---

NOTES TO EDITORS

* Mobile Operator Strategies for Defending Against OTT Competition

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Mobile network operators content partners and over-the-top (OTT) players

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