Will lack of commitment derail OTT and CSP relationships?

 There has been a huge swing in opinion over the last year. Twelve months ago, Over the Top (OTT) players were still seen as competitors whose sole reason for existing was to take revenues away from Communications Service Providers (CSPs). From competitors to collaborators, there is now a consensus that partnerships will bring more compelling, tailored products, better billing, better customer service and more revenue for all. According to the latest Telecoms.com survey, 92 percent of the 2,000 respondents, and 93 percent of operator respondents support this view.

Which sounds great, but there are some concerns. Prominent amongst them is a perceived lack of commitment. 35 percent of CSPs believe that OTT players’ lack of commitment was a six or a seven on the difficulty scale, with seven being a severe barrier. The same percentage of OTT players believe the same thing.

This could be put down to many things.

‘I have better things to do,’ could be one. With operators struggling to find their differentiator, there are numerous initiatives going on, and others may have better support from the Top.

Another could be the ‘if it isn’t broken, don’t fix it,’ theory. Customers are, after all, getting their heads around this strange, nebulous thing called ‘data’ so why confuse them now?

Certainly the lack of skills, IT constraints, lack of management support and vision are all cited as barriers.

But there will be many who remember the early days of something called ‘Partner Management.’ Once the benefits of partner management, in a number of guises, had been articulated and given the green light, Billing Managers went to their billing vendors and asked for some help in designing a spreadsheet that would support it. No way was there any budget for it. Now, of course, fully fledged partner management systems with built in revenue assurance capabilities and fraud control functionality are commonplace.

This is no different.

If OTT players provide an opportunity to create better, clearer products out of ‘data’ and CSPs can offer them – and their customers – better billing relationships and therefore better customer experience, then we need to articulate the benefits as clearly as the opportunity itself. Use cases are certainly emerging, most notably AT&T’s announcement of sponsored, toll-free data. But it may be the scale of the opportunity and the number of OTT players which is causing the industry to think they have better things to do. To many, it will look boiling an ocean.

It took a while for 1-800 numbers to become universal. For a long time, smaller companies did not see that they needed to have one. Then they realized that a toll free number was ‘business as usual’ and their customers expected it. The same will happen with data.

Once we have articulated the opportunity and the business case, all OTT players will need something to plug into to take advantage of the billing, Quality of Service promises, a better way to pay and a better customer experience.

And CSPs can realize the joy and value of offering products rather than just ‘data.’

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Alex Leslie
About Alex Leslie 400 Articles
Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet.

1 Comment

  1. I agree that so-called OTTs and telcos need a lot of effort to work together, but there are plenty of good examples (as well as bad). The best in the last decade has probably been RIM, which successfully partnered with virtually every operator to sell its email & messaging subscriptions via telecom billing platforms. Numerous other players in the area of content (eg Spotify) and enterprise solutions (eg Cisco, Microsoft) have also partnered effectively.

    The sponsored data / 1-800 issue completely orthogonal and irrelevant to all of this. Not only are any successful partnerships going to be zero-rated (eg various WhatsApp & Facebook deals with operators) where *nobody* pays, but the concept that any app/content provider will ever pay for a user’s data charges is completely impractical and unworkable. Comparisons with 1-800 are hugely simplistic, and typically ignorant of the very nature of data applications & the way websites are built. See http://disruptivewireless.blogspot.co.uk/2014/02/sender-pays-is-ridiculous-19th-century.html for more details on this.

    I think a much more important challenge for telcos is looking closely at their internal processes for working with third parties and innovators. Most operators are not set up to do revenue-shares with third parties, and often have hideous bureaucracy and paperwork requirements before they can even accept or pay invoices. For most small Internet players, the last thing they want to do is deal with hundreds’ of telcos’ legal and procurement departments, just for a small chance of getting paid less than they can through other avenues.

    Dean Bubley
    Director, Disruptive Analysis
    @disruptivedean

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