A balanced co-operation between mobile network operators and Over the Top (OTT) players is required to develop a win-win ecosystem as operators cannot be in complete control of the internet ecosystem while a broadband pipe that lacks appealing content and applications means little to end users, said Ahmad Farroukh, Chief Executive Officer: MTN South Africa.
The CEO of MTN SA was addressing delegates at the 17th edition of AfricaCom, on the topic titled: It’s complicated: Can operators and the new wave of OTT players make their relationship work?
He further said mobile network operators and OTT players can either fight off each other or opt to work in partnership to define access and structure a fair deal for both parties.
“On one hand, we need to stress that there should be no free ride for OTT players, mobile network operators will protect their customer base and revenue streams. Rules of engagement will have to be defined between operators and OTT players. Involvement of global forums that represent operators such as the GSMA will most likely be necessary to define the rules of engagement,” said Farroukh.
He suggested strategies where operators, for example, charge for value added services and quality of service. “Those that want a premium service will be willing to pay a premium,” he said.
He told delegates that mobile operators need to put a plan in place to avoid being forced into the role of providing a “dumb pipe”, investing and providing the infrastructure, but allowing OTT app providers to own the customer and make money in the future.
Farroukh said that mobile network operators and OTT players should develop a win-win ecosystem that adds value to the customer.
To be a truly successful, Farroukh said, OTT players and mobile network operators have to go for a bigger customer base beyond their own customer base and leverage on global reach. He said that this is where partnerships will play an important role.
“Mobile network operators have made substantial capital investment in licensing and spectrum, acquiring and building their customer base and investing in building trusted brands. Operators have been catalysts and economies enablers and have contributed significantly to the fiscal budgets of many economies – all of this not to be shared for free,” said Farroukh.
Collaboration between operators and OTT players have immense benefits for both parties, Farroukh explained, as it will enable the operators to leverage the wider capabilities of smart phones and enrich core communication services for existing subscribers while continuing to invest in Technology that provides the best Customer experience for OTT users.
He said strategically positioned OTT players cooperating with mobile network operators can also deepen the relationship between customers and the operator brand, build loyalty, reduce churn and help improve the customer value proposition.
“Through OTT players, operators can build relationships with subscribers on other networks as well,” said Farroukh.
He pointed out that instant messaging platforms for content, current and enhanced future OTT voice need mobile super broadband availability. If the current ecosystem does not change; operators will lag behind in providing capacity for this access and then the game plan will change completely. OTT sooner or later will be charging for their services, their current revenues streams predict that. The cooperation with operators can cover that in a win-win aspect.
Farroukh said that if mobile network operators do not get it right with OTT, sooner or later they will become like the incumbent fixed networks that they themselves, the mobile operators, neutralized along the years.
He said that operator’s strategies are likely to contain a combination of own OTT services and partnerships with third parties. “Rules of engagement will have to be defined between operators and OTT players. Mobile network operators and OTT players should work together for their mutual benefit and for the benefit of their shared stakeholder – the end user,” Farroukh concluded.