We have seen the Rise of the Telcos in the 1990-2000 and then came the OTTs. Clearly the last 10 years have been the years of “The Rise & Rise of OTTs”.
With the ever increasing Data Network presence being created by the Telcos, there has never been a better time for the OTTs to grow and that is the reason for this huge explosion in Content, Apps, Games, Utilities, Fintech, StartUps, e-Commerce, VR, AI & IoT. This has also however enabled the Telcos to also monetise their investments.
We must ask this question “Was it even comprehendible a few years back that the Future will be so Connected?”
Well some people might have been able to see it but like a famous Quote from Mark Zuckerberg “We know what the future looks like. We can see it, we can comprehend it. But we don’t know what path Technology and the Human Race will take to reach there.” It is therefore critical to find this path as that will determine the future of today’s businesses.
One path that is clearly visible is the combining of the two powerhouses – the Telcos and the OTTs. A convergence is imminent and that is going to become a driving force to lead us to the future we envision. We can clearly see New Business Entities “evoluting” out of the convergence of the Telco and OTT and for the sake of this article lets call this new entity ToT.
ToTTs are already on the rise and there are many examples already available of organisations that are embracing this Model. If you look closely you will realise that Apple, Google, Facebook, Vodafone, AT&T, Verizon, Airtel, Nokia, Huawei, Qualcomm, Intel, Cisco, HP, MTN, Orange, SoftBank are all in some stage of the ToT Model.
ToT brings the “Ever so Diverse” and yet “So Similar” Businesses together. These businesses which are interdependent on each other, which supplement and complement each other, once combined can bring greater value for shareholders and customers.
A few reasons for this great convergence to occur are:-
Monetisation
While the OTTs focus on valuation and giving it Free to the end customer and look at making money from the Advertiser, the Telco typically focuses on the subscription and service use model. Combined the two can drive subscriptions, advertisement revenue and customer usage and loyalty thereby enabling a much faster monetisation of assets.
R&D
The OTTs survive because they spend on R&D while the Telcos typically use the inventions of the network equipment manufacturers to bring service to the customers. OTTs question the Status Quo while the Telcos strive to extract the maximum from the existing asset. Telcos know how to sweat infrastructure and therefore provide massive capability to OTTs to launch new services and innovate and monetise innovation. Together they can always stay ahead of the curve and competition.
KPIs and Tools
Take a look at the KPIs used by Telcos and OTTs like DAU, MAU, Active, Inactive, MoU, Gross Adds…. there is an exact overlap in terms of KPIs. Why? The only answer is that these are very similar businesses and one rides on the other. Combined they will be able to do better analytics, product & service offerings and drive customer behaviour and value.
Connected World
With the advancement in technology and the amount of investment which is going into R&D, very soon there will be a break-thru technology that will enable 100 Mbps + data speeds at the fraction of cost and a fraction of deployment time. We clearly see a connected future where not only the Humans but the Things and AI are also connected. The very reason of existence of such a world will be the underlying network and therefore the interdependence of the OTT & Telcos on each other will only increase and lead to convergence.
I am very excited to see this happen, the possibilities that it opens, the advancement it will drive, the parity it will create across the world, the new businesses it will create and the value it will drive.
The World Will Evolve !!
This is the first of this 3 part – series. Watch out for the remaining two.
About the Author
Nitin Anand is the Vice President Marketing – Data, Products and Digital at Airtel Nigeria
