Forging a telco-OTT friendship

Telcos and over-the-top players don't need to be locked in a deadly duel especially when working together can deliver better outcomes. But forging effective partnerships will require plenty of patience and trust.

Everyone wants a good partner - just look at the immense popularity of dating websites and singles events. But divorce statistics remind us that finding a suitable partner is difficult, and keeping one is even harder. 

What’s true for daters is also true for communications service providers. Many providers believe they need to partner with device manufacturers and/or over-the-top (OTT) players to remain competitive, but they aren’t sure how to do so effectively.

Fortunately for service providers, a recent global survey by Amdocs and conducted by analyst firm Coleman Parkes explores attitudes toward partnering between the three key groups that define the customer experience: communications service providers, OTT players and device manufacturers.

A good partner is a desirable commodity and that sentiment was confirmed by the global survey, which found that 70 per cent of service providers actually see OTT partnerships as an opportunity.

Taking things a step further, 64 per cent of service providers globally (compared to 100 percent of service providers in APAC) believe OTT vendors bring value to the industry in terms of innovation and 42 per cent of service providers say they can offer any service that an OTT player can. Seventy-two per cent  of APAC service providers also view partnerships as strategically important today compared to just 57 per cent of service providers globally.

Putting a local spin on the results of the survey, Telstra's chief technology officer Dr Hugh Bradlow recently said that mobile operators should stop attempting to compete with nimble OTT players and instead focus on working with them to the benefit of all.

In an interview with Mobile World Live. Bradlow outlined a two-pronged strategy to deal with the emergence of OTT players.

“I think there are two ways in which we deal with over-the-top players.  One, we look at ways in which we can help them deliver their services better; obviously we expect them to pay for the additional value we deliver.  And the other way is we help our consumer customers to actually utilise that service and have someone to call when things go wrong and to turn it on for them when they need to use it,” Dr Bradlow said.

Fifty-eight per cent of service providers believe the communications market will consolidate in the future (compared to 85 per cent of APAC service providers) and that only players that partner will succeed. Service providers, OTT players and device manufacturers will all seek to own the vital customer relationship within the next couple of years and the majority in all three groups understand that they’ll need to form shrewd partnerships to achieve that goal.

It can be deduced that OTT players are viewed by service providers as the industry’s speedy service innovators, and that service providers recognise that by partnering with OTT players there is potential for enhancing the variety and scope of services traditionally offered by service providers.

Win-win Relationships

But how can service providers ensure successful partnerships?

Service providers, OTT players and device manufacturers must also make sure that they create win-win partnerships that work for both involved parties. Some goals will be shared. For instance, our survey found the desire for increased revenues and cost savings to be universal. 

But other goals are more specific and can only be achieved with the help of a partner. Service providers should carefully consider their goals and make sure they pick partners who can help them experience success. For instance, the global survey found that OTT players and device manufacturers are interested in delivering a seamless customer experience. A service provider that can help them achieve that goal will likely have its pick of partners.

Sharing is key 

Young couples often find their fresh love tested when one person hoards assets, such as money, or grandma’s unbelievable chocolate chip cookies.

Service providers will also have to learn how to share if they want their partnerships to thrive, even if it means risking vulnerability. The survey found that the three groups are willing to offer and expose their core assets to achieve partnering goals. While 74 per cent of OTT players and 73 per cent of device makers were willing to expose and share their core assets, perhaps most surprising (and interesting) was that 56 per cent of service providers are willing to do so. This kind of sharing will be vital to creating the win-win relationships I mentioned earlier.

Know what you bring to the table

Good relationships are forged by people who know their strengths. OTT players largely agree with service providers’ assessment of their important assets: brand strength, network quality and customer data.

Partnerships that attempt to leverage the value of these consensus assets are likely to succeed, but the value proposition of other service provider assets needs to be developed.

Good partnerships require systems and processes that make partnering convenient and lucrative, such as open partner management systems to share revenue as well as easily onboard partners.

Advanced IT systems are also necessary to help service providers leverage key assets, such as network quality of service and customer data, and convert them into revenue. And the ability to combine charging and policy will enable QoS-based charging on behalf of partners.

In fact, sixty-nine per cent of OTT vendors believe that developing partnerships is either important, or very important, for ensuring the quality of service (QoS) they need to survive and compete. That sounds like a good entry point for service providers.

The right solutions are crucial, but not enough on their own. When the best solutions are married to a good strategy, service providers can find the right partners and live happily ever after.

David Murray is the vice president of Amdocs Australia and New Zealand

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