A new Disruptive Analysis thought-leadership
Strategies & Case Studies:
"Give it a name!": The
overlooked rise of telecom operators' own access-independent Internet services,
for communications, content, cloud & connectivity
Published February 2012 - 135 pages -
One of the loudest debates in today’s
telecoms industry concerns the response of operators to so-called “over the
top” (OTT) players.
Traditional telephony and SMS
revenues are under threat from newer, Internet-based alternatives such as
Skype and WhatsApp. At the same time, third-party web content and social
networking companies such as YouTube and Facebook are making a huge amount of
money – and driving high levels of data traffic – over the operators’ fixed and
mobile broadband networks.
Operators are trying to work out what to
Charge customers extra to use such
Differentiate at the network level &
ignore the fracas about Neutrality? ("Prioritise")?
Attempt to extract money from these
"upstream" OTT players ("Monetise")?
Partner with Internet OTT
Compete collaboratively through
new standards like RCS / RCSe
Disruptive Analysis believes that this
debate is too polarised into a “them and us” discussion. Industry bodies like to
suggest that “Real Telcos” are inherently different from newer
communications-industry peers such as Google or Facebook.
But technology advances – smartphones,
fast IP networks and open developer platforms – make application and service
creation easy. Software can deal with the effects of network glitches or
congestion itself, without need for “network QoS”. Users are enjoying access to
a huge smorgasbord of different applications and services; they are no longer
forced to use a restricted, expensive and rather lacklustre menu of telco
There is another option: Telcos can
launch their own Internet-type services. Disruptive Analysis calls this
In fact, many telcos already
offer their own OTT-style services via generic Internet access. In future,
many more will do so – there are some very strong arguments that most or all
services thrive when “decoupled” from network provision, at least in part.
Disruptive Analysis believes that
operators need to go on the attack. Operators need to exploit the scale and
rapid adoption of billions of Internet users, who have ever-faster devices and
data access, using similar tactics to the familiar web- or VoIP-type providers.
Telco-OTT enables operators to
Expand their user-base reach to the scale of the multi-billion person web,
especially for new services, in the same fashion as Google or its peers.
Use the Internet’s ubiquity as a way of
improving existing access subscribers’ experience when they are
“off-net”, for example helping them access their TV or voice services, from
PCs or mobile devices connected via other networks.
Offer “outside-in” services to their
access customer base, using the cost and simplicity advantages of using the
public Internet to host and deliver telco applications “in the cloud”, rather
than running them in-house.
Segmenting the landscape, Disruptive
Analysis has outlined four main Telco-OTT service categories:
Content, video & portals
networks & identity
communications, security & cloud
Each has its own opportunities and
challenges. None are easy to monetise, and experiment (and sometimes failure)
will be needed. The bottom line is that operators need an “attack” mode against
Internet players, as well as a defence. Customers want open-Internet
services – they like the choice and flexibility, and that trend is unstoppable.
Partnering will only go so far – telcos also need to innovate with their own
offers. Operators face formidable regulatory, organisational, staffing,
technology and competitive challenges in making their own Internet services as
valuable as their peers’. Yet if they are to survive in the long-term, they need
to embrace OTT, not fight it. If you can’t beat
‘em, join ‘em.
This new report from Disruptive Analysis
explores the rationale for Telco-OTT, looking at the key categories, the
advantages & the practicalities. It identifies more than 80 existing
Telco-OTT services, across all the categories above.
1. Executive Summary
2. Introduction: what is Telco-OTT?
Many operators are already buying into the OTT vision
“Give it a name”
The dumb pipe & “over the top” myth
Why OTT business models are seen as a threat
Hypocrisy, opportunity or expediency?
Fixed, mobile or converged?
Can operators actually monetise OTT services?
3. Telco-OTT landscape: Directory & Segments
Telco-OTT services “master directory”
4. Why is this happening now?
Service fragmentation – QoS isn’t everything
Addressing user behaviour: Ubiquity vs. fragmentation
It’s all about Freemium
Failures of the past – have we learnt the lessons?
The role of two-sided business models & upstream customers
LTE and all-IP mobile networks
The impact of WiFi
Evolution of the web and application environments
5. Content, video & portals
Case Study: Telefonica Terra
Download, appstore and gaming sites
IPTV and Internet video
Internet video & social TV
6. Communications, social networking & identity
Introduction: the hold of the old, the lure of the new
Why do new telco-driven
communications services fail?
Key issues for communications services
Assumptions and legacies in the
Is communications standardisation & ubiquity needed?
Smartphones + apps = communication
Where does IMS fit?
Could IMS somehow be used to deliver
OTT-IMS as secondary access to
existing telco voice/messaging services
Telco communications services in the IP era
The need for consolidation in basic
voice & messaging
Voice, VoIP, video-calling & mass-market telephony
Fragmentation: A wide variety of
operator moves into OTT voice & VoIP
Standalone Telco-OTT VoIP & telephony
Partnerships with Internet-OTT
Remote-access / international-access
OTT VoIP apps
Fixed OTT VoIP over “naked” home
UMA and VoLGA
Messaging, IM and presence services
Is the Golden Goose of SMS about to
stop laying golden eggs?
Possible mobile operator responses to
the coming SMS decline
Hidden and “over the top” RCS for
Telco-OTT messaging implementations
Social networks & address books
Case Study: SK Telecom’s Nate and
Case study: What went wrong with
Identity management & personal data
Personal data brokers & data
Summary & conclusions
7. Enterprise communications, security & cloud
Telephony, collaboration and unified communications
Softphones and remote access voice /
Mobile corporate voice
Business social networking
Case Study: Telefonica Terabox &
CDNs (content delivery networks)
Other business process enablers
8. OTT connectivity
IP-VPNs & remote access
WiFi Offload / Onload
Case study: O2 OTT-based WiFi Onload
9. Practical & operational issues for Telco-OTT
Protection from legacy fiefdoms and internal politics
Exploiting telco assets to differentiate from other OTT
Incentivisation of staff
Revenue classification & financial reporting
Build vs. partner vs. acquire software
Telco-OTT infrastructure & architecture considerations
Standards – inhibitors or accelerants of Telco-OTT?
Exploit all the tricks & tools open to software companies
Net Neutrality, OTT services and the Law
Pure OTT vs. on-net optimisation
Branded smartphone apps
Hardware approaches to Telco-OTT
10. Conclusions & recommendations
Market status & growth for Telco-OTT services
Telco positioning for OTT services
Recommendations: For all operators
Recommendations for fixed operators
Recommendations for mobile operators
Recommendations for network, device & software vendors
Recommendations for investors & consultants
Recommendations for regulators & industry bodies
Background to this study
About Disruptive Analysis
Table 1: Open vs. closed Telco-OTT services
Table 2: Master Directory of Telco-OTT services, January 2012
Table 3: Standalone Telco-OTT VoIP & telephony services
Table 4: Telco partnerships with Internet-OTT players
Table 5: Remote-access / international-access OTT VoIP apps
Table 6: Telco-OTT social networks and addressbooks
Table 7: Femtocell services – OTT deployment model vs. non-OTT
Table 8: M&A transactions relating to Telco-OTT services
Table 9: Examples of Telco-OTT in 4 service categories & 3 delivery modes
Table 10: Operator-by-operator involvement in 4 categories of Telco-OTT service
Figure 1: Today’s on-net & Internet OTT services vs
Figure 2: Tier-1 telcos have publicly acknowledged OTT opportunity
Figure 3: Pipes and pipers: dumb or happy?
Figure 4: Three models for Telco-OTT services
Figure 5: Communications fragmentation is driven by user need
Figure 6: Many telcos operate conventional OTT-style web properties
Figure 7: Operators extending their OTT portals to music & gaming
Figure 8: Some operators are already being very clear about OTT-TV
Figure 9: Various operators already offer YouTube-style Internet video
Figure 10: Orange’s forthcoming SoTV platform points to OTT Social TV
Figure 11: 6 models for future MNO voice/comms business models
Figure 12: Voice is becoming more than just a synonym for telephony
Figure 13: Evolution path for Telco-OTT voice services & apps
Figure 14: Full, open Telco-OTT voice services & apps
Figure 15: T-Mobile Bobled makes its OTT status clear
Figure 16: Internet-OTT / Telco-OTT partnerships
Figure 17: OTT voice / UC extensions of telco-hosted comms services
Figure 18: Enterprise services involve mix of on-net access & Telco-OTT
Figure 19: “Bring your own device” will drive need for Telco-OTT
Figure 20: BT Onevoice - an example of a business Telco-OTT voice app
Figure 21: If some users are based on Telco-OTT access, why not all?
Figure 22: Telco public cloud services may be on a “Semi-OTT” model
Figure 23: Telco “Full-OTT” cloud service model
Figure 24: Many telco B2B enabling services imply OTT end-customers
Figure 25: M2M enabling services: key corporate Telco-OTT opportunity
Figure 26: Telenor Objects offers OTT-style enablement for M2M
Figure 27: Operator involvement in WiFi includes offload & OTT onload
Figure 28: Revenue recognition & ARPU segment reclassification
Figure 29: Even on-net access subscribers may use Telco-OTT
Figure 30: Examples of Telco-OTT smartphone apps
Figure 31: Positioning of telcos for Telco-OTT vs Internet-OTT activities
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