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Working with OTT players in the Cloud
Vuyani Jarana
Double Sided OTT Business Model
Co
mm
un
itie
s
C
on
ten
t &
co
nte
xt
1. Free content
2. Free messaging service
3. Free Voice service
Consumer Freemium services
Pay per use premium services
Business Sponsored : Revenue Streams
Advertising platform
Advertising
Revenues
Accept
exposure to
adverts
BBM
whatsup
skype
twist
Co
lla
bo
rati
on
an
d
co
nte
nt
se
rvic
es
3
The no-revenue business model?
Viber statements:
We will NOT charge for the app
We will NOT charge for Viber-to-Viber calls
We will NOT charge for Viber-to-Viber texts
We will NOT advertise on the Viber app
“We will NOT sell, rent or in any other way abuse your
data”
Sponsored free service…
ads or induced to services
so that customers can buy
and follow through with
premium
The underlying
infrastructure will never be
free.
Someone is paying for your
free wifi… either your
neighbour, restaurant or
advertisers
Freemium Services
Underlying Infrastructure
APs
0
20
40
60
80
100
120
140
160
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Investment per customer Freemium services customers
Sponsored Revenue Streams Paid for Premium Services Subscriptions
But social network platforms are not built for philanthropy
… the Freemium service is paid for
Average investment Per
customer
Freemium service Subscriber base
Size of community
Lower the cost Increase User Base
SMS Voice
Leased Line Mobile BB
HSI
IPTV
Voice Broadband Connection Ultra Broadband and User Centric
Killer Application Era Long Tail Application Era
Golden Year
A
C
B
Va
lue
/B
it
ARPU
Can it be enhanced?
Bandwidth
Can it be achieved beyond
demand?
Cost
Can they be controlled
within the target? HDTV
Challenges MNOs are facing: Scissor Shaped and ABC
Can cost remain same
while Bandwidth increase 10 times?
Model courtesy of Huawei
Drivers of adoption of OTT services beyond cost
Community
Content
Context
The current model where operators continue to invest in
the underlying network and OTT players take the UPSIDE
is not sustainable. A new model that is balanced must
evolve. Operators have to develop new ideas around this
issue.
VS
VS
VS
MNO’s facilitate the underlying
platforms thus creating a possibility to
facilitate real interoperability.
Billing relationships with clients create
biggest potential upside for both OTT &
MNO
1. Amazon does not know how to talk to ebay
2. Facebook does not know how to talk to Linkedin
3. Google search engine does not know how to talk to Bing search engine
Build standard APIs and expose them to OTT to connect at easy and therefore create a
partnering context
The next evolution of OTT service will be mission critical yet underexplored
applications such as for mhealth
Html 5 will enable simple service integration for APPS … the key is for Telcos to shape
this future so that the ecosystem is rebalanced.
Html5 , Access networks, Standardised open APIs, Data storage capability , Trusted brands and Billing
relationships , Customer service context give MNO in unassailable position to participate in the ecosystem
Wearable smartphones Activity & health tracking &
monitoring mHealth evolution
What should MNO’s do?
1. Transform : transform traditional ( voice centric) business model into data centric business model, then
the issue of OTT becomes that of gain sharing than revenue cannibalisation.
2. Collaborate : collaborate with OTTPs and provide billing context for service bundles so that customers
are always on regardless of the underlying service plan from MNO.
3. Innovate : create end to service by developing open APIs for OTT to engage with ease and cross service
integration leveraging developments such as html5 etc.
4. Lead and Shape health and education ecosystem
Vodacom’s pricing transformation programme
Collaborate with OTT players
1. MNO have data centre and cloud assets
2. MNO have channel capability which OTT tend to struggle with at enterprise level
3. Value bundling of OTT services and increase ARPU as customers move to higher price plans
4. Billing relationships with clients
5. Build end to end rich communications service platform as industry standard (RCS)
6. Leverage OTT systems capability to build commercial offers
When a customer has a problem with BBM or facebook not
working, they call their MNO first as some of the OTTPs
have no direct service support context, which tends to be
crucial requirement when the service fails.
…despite not benefiting from the OTTP upside
MNOs are still the go to service point for OTT services…
What is RCS-e?
An end-to-end seamless service :
An industry GSMA standard
Chat & Group chat
The simplicity of SMS with
the richness of IM.
Video sharing
Add video to a running voice
call contrary to 3G video
calls
File sharing
Share multimedia content
during a chat or voice call
session
Capability discovery
Rich communication service (RCS) ete
Operator strategies to manage OTTP challenge
Mobile Voice Messaging Media Cloud
1. Hold ground and
transform business
model
2. Migrate to integrated
price plans
3. Create a differentiated
voice quality
proposition
1. Drive enterprise
messaging strategy
especially for Sme
2. Collaborate with OTT
3. Develop APIs and
expose them to OTT to
create a revenue share
relationship
4. Evolve sms / mms into a
value added platform for
enterprise b2c.
5. Accelerate m2m
1. Integrated offers quad
play with focus on
quality of service and
experience.
1. Leverage customer billing
relationship, access
network and data centre
assets to carve a distinct
position in the market.
2. Leverage IaaS, PaaS &
SaaS capability to lead in
enterprise
3. Value Bundling: Bundling
third party cloud services
and get customers into a
higher price plan.
Thank you
