Over-the-top (OTT) services are rapidly growing in popularity, enabling mobile subscribers to take advantage of a variety of value-added services over their mobile service providers’ networks. In fact, the mobile industry has been predicted to lose $182 billion in voice and messaging revenue between 2013 and 2017 because of the growing use of OTT messaging. While some MVNOs may see OTT services as a threat, the truth is partnering offers a win-win solution for both parties. The key for MVNOs may be a highly-flexible BSS/OSS platform that enables quick-and-easy OTT integration through open APIs.
Over the past few years, some mobile operators have attempted to go it alone by launching their own OTT-like services but they largely went nowhere for any number of reasons, most likely because of the complexity of launching and integrating such a service, especially with the increasing dominance of OTT voice and messaging services such as Facebook, Skype, and WhatsApp.
Instead, an alternative to competing with OTT services might be to partner with them. For example, WhatsApp began cooperating with German MVNO e-Plus, offering e-Plus subscribers a special data tariff for WhatsApp messages, videos, and pictures. The relationship provides benefits for both companies – WhatsApp adds brand recognition value to e-Plus while the MVNO is able to expose WhatsApp to a new market of potential users of the OTT’s messaging service. This is just one example of many opportunities for mutually-beneficial relationships between MVNOs and OTTs. Mobile providers can generate revenue from off-net access, including renting mobile phone numbers to capture IP-based traffic for their networks, adding more texting services, and selling branded apps. OTTs offer MVNOs broader reach into a potentially larger group of subscribers and the possibility of generating more income from data plan revenues, in-app purchases, and licensing.
MVNOs focusing on emerging or international markets can utilize OTT to streamline their business model and increase efficiency. For example, subscribers living in one country but with family in another are driving up the demand for lower cost international communications. MVNOs can help address this by embedding more than one local phone number in a SIM card. Even better, MVNOs could distribute phone numbers through apps instead of a SIM card to help lower costs – creating a “virtual SIM card.”
A modular, cloud-based BSS/OSS solution such as our BeQuick BSS/OSS for Mobile with open APIs makes it easier for MVNOs to integrate third party and OTT services. A robust business intelligence capability and data analytics to anticipate what subscribers want helps MVNOs delight and retain them. With that kind of flexible and versatile BSS/OSS platform, rather than trying to avoid OTT as potential competition, it makes sense to embrace it as another, cost-effective way to introduce desirable new services and products without the burden of development costs and delays.
As the mobile industry continues to evolve, chances are we’ll see greater investment and consolidation in the OTT space, especially as consumer use of messaging apps instead of SMS texting increases. Mobile service providers such as MVNOs will have to find a way to innovate cost-efficiently or lose marketshare and revenues to those who do. And that means partnering, not competing, with OTT services.