TECNOTREE BLOG

Staying agile in an OTT world: Why operators are still slow off the mark in digital services, April 2016

By Timo Ahomäki, CTO at Tecnotree

With the arrival of OTT content providers, the way we use our phones has undoubtedly changed. Facebook, WhatsApp, Viber and Skype dominate the communications markets and new services are being launched with increasing rapidity, and operators have found themselves with eroding profits and now face the question of how to become better service providers in order to keep up with these digital disruptors. Reports from  Juniper Research have also predicted that within five years, OTT service providers will expect to see a fivefold increase in their revenue, no doubt causing some anxiety within the boardrooms of many mobile operators.  
Recent research conducted by Tecnotree amongst global operators confirms that the industry is aware that change is required in order to bridge the increasing gap between OTT competitors and CSPs. The research also revealed that 75% of respondents had noticed increased average revenue per customer (ARPU) related to digital services over the past 12 months.  

The demand for digital services appears to be on the rise, with 69% of operators expecting to see an increase in digital usage from customers travelling to Europe. In order to benefit from this increase in usage, operators must reinvent their service offering to ensure data remains in their networks, while also ensuring that new services are rolled-out quickly to ensure they do not lag behind their speedy competitors. An overwhelming 89% of those surveyed believe that OTT providers can deliver new products in 1-6 months, whereas 30% of the questioned participants believe it takes a year for CSPS to do the same.

One of the biggest hurdles is in Business and Operational Support Systems (BSS). OTT competitors have run away with large segments of market share, mainly due to the inability of major operators to quickly and efficiently update their legacy business and operational support system (OSS/BSS) infrastructures, with 50% of operators needing to update their systems and 79% needing to move to fully integrated billing functions within their digital product set.  

So, what is being done to overcome these challenges? Operators have taken action in the form of an alliance of nine mobile operators to bring digital or digital content to consumers quicker. Similarly,  EE recently partnered with MTV for a new music service called TRAX and AT&T’s DirectTV, which provides on-demand and live programming, is also now an OTT service. But along with providing these bundles, CSPs will have to build and plan for uncertainty within their infrastructure. While it is unrealistic to predict the future, the dawning of new technologies such as IoT with countless possibilities, CSPs will need to be flexible and agile with their OSS/BSS systems, in order to be responsive and adaptable to changing market demands.  

This piece was originally published in TelecomsTech.

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