Carriers as OTT Vendors

August 6, 2012

Carriers were synonymous to service providers. This is what they did: if you needed a communication service, you want to a carrier. Times have changed.

Today, it is any vendor that takes care of communication and it is the mobile platforms themselves that control the distribution of such services. Now that carriers are out of the distribution path, they are referring any vendor with an application that provides a communication service as OTT (Over The Top).

While carriers wouldn’t have been able to fill in all of the communication needs of the users, they definitely could have provided a better experience – one that wouldn’t have me running to install every second OTT communications app that I can find.

What are carriers really doing with OTT?

Carriers around the world have started playing with OTT solutions. Here are a few interesting examples of these experiments that they are running.

  • T-Mobile Bobsled is a pure OTT play that offers voice calling, group messaging with cloud synchronization. Within a year, Bobsled has risen to 1 million users, 95% of which are not T-Mobile subscribers.
  • Rogers One Number service enables users to dial and receive their calls and text messages on their computer, as well as switching in mid-call between the phone and the computer.
  • Telefonica TU Me was a new service that Telefonica has launched in May 2012. It offered voice calling and messaging with a kind of a timeline view to it. It since shut down.
  • Telefonica’s O2 labs has developed two additional OTT applications: Social Call, which enables any UK resident to call his Facebook friends; O2 Connect, a trial service for O2 subscribers that allows dialing voice calls and texting over WiFi where no mobile signal is available.
  • Telio’s Goji service which offers voice, video and messaging to anyone. Telio is also planning on white-labeling it.
  • T-Mobile, Sprint, Verizon, AT&T, Vodafone, NTT DoCoMo and SoftBank have all partnered with Qik (which was acquired by Skype) for their video calling and streaming capabilities. While these don’t target existing communication solutions of carriers, they might be a viable solution in the future when the network becomes all-IP.
  • Cellcom Israel offered a service called Cellcom Link for travelers going abroad, allowing them to dial and text over WiFi. The service was shut down recently. A replacement service is being planned.
  • Indonesia’s Telkomcel has taken a different route – if you can’t beat them, join them. It has created a special unlimited data plan offering that includes WhatsApp messaging service and Opera Mini access.

How do OTT services differ from the carrier ones?

There are several ways in which OTT services differ today from the carrier ones:

NetworkService runs only their own network, where quality of service and ubiquity are expectedService runs over “someone else’s network”, where guaranteeing quality of service is a challenge
DeploymentSeamless, as part of the phone itself, providing immediate exposure to the user base at the expense of long update cycles and long TTMVia applications downloaded by the users, enabling shorter upgrade cycles with fast TTM while needing to maintain the governance rules of the app store, and depend on users to actively downloading the application
MediumLimited to the devices and the networks of the carrierNot limited to a specific medium: can run over smartphones, tablets or PCs
Customer baseRegional, to the area where the Carrier’s network operatesGlobal
StandardizationAll services must be standardized to ensure interoperability with other carriers’ user base and service offeringProprietary by nature and design: places the user base into a silo, with little or no connectivity to external services

The OTT Threat

While service provides have made some baby steps into the OTT world, the success of these initiatives are debatable. With the expected roll out of LTE – an all-IP network – OTTs are positioned to become a real threat to carriers: LTE’s increased bandwidth and lower latency will allow any communications player to compete over the service provided by the operators themselves: providing messaging, voice calling, video calling and other means of communications.

These services are sometimes free, where the OTT player expects to earn his revenues elsewhere: through a freemium business model, advertising or some other means.

OTT End Game

In the battle over the communication of the customers, carriers are fighting against OTT vendors. Carriers need to decide how to deal with the growing means of communication we as consumers now have. For that, they can take several different approaches:

  1. Yield, and partner up with OTT vendors
  2. Try to launch their own homebrew OTT service, and even compete on the global market with it
  3. Acquire OTT players
  4. Go with the GSMA’s RCS/Joyn initiative, which is only now materializing

The real question now, is how is this going to change with WebRTC and what should carriers do about it?

 UPDATE: The O2 and Cellcom apps have since been deleted and removed from Android Play. I hope others will do the same with their own graveyard apps.

You may also like


Your email address will not be published. Required fields are marked

  1. I think that offering RCS-e/Joyn as OTT is also an alternative, telcos may keep the standards and try to gain customers with communication services even they are not selling “access” to them.

    Also, WebRTC is a technology that can help a lot to create a myriad of full multinedia endpoints using the same network protocols, I do not see WebRTC as a thread but a helpful tool.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}