Service providers are taking different approaches in their struggle with revenue reduction and the shift of services to OTTs. Many are implementing a few strategies in parallel typically including innovation labs/acquisitions for launching their own OTT type of services as well as work towards launch of RCS based services.
Summing these efforts; they are working towards launch of WhatsApp/Viber/Skype type of services. That said, looking for revenue under the streetlight.
Luis Borges Quina, CEO of Apidaze, was speaking on the API Days event in Paris. While building his presentation he asked a few of his industry friends (me among them) to provide their view on “what will the telecom landscape look like in 2020?”
I provided the following:
- More consolidation
- More focus on enterprise services…following the paying customer
- Will still be deep in their dream that RCS will “Turn the Tables” and make them win over OTT
We see this trend both on vendor and service provider fronts. It makes a lot of sense; it is natural for a market stressed with increased cost supporting data requirements while revenue is challenged.
More focus on enterprise services…following the paying customer
This also makes a lot of sense. When increasing consumer ARPU is somewhat between hard to impossible targeting customers that are willing to pay for services, i.e. enterprises, is a right move.
Will still be deep in their dream that RCS will “Turn the Tables” and make them win over OTT
Let’s try to dream beyond the brightest dream of a service provider that RCS will be a huge success (it will not but remember, we are dreaming now), so big that it will bring back users from the OTT to the service provider.
What does that mean from revenue perspective?
That it will bring all the revenue of the OTT to the service provider?
That can be really great. Let’s take WhatsApp as an example of a very successful OTT that took significant SMS revenue away from the service provider….turning that revenue into one big void. In 2013 the revenue of WhatsApp was around $20M. Not something to write home about compared to the SMS revenue that was disrupted.
There is a fundamental difference between the business models of traditional service providers and OTTs. Service providers have a symmetric business model; they make money from the specific service they offer. You send an SMS, you pay for it, for a package or for all you can eat.
OTTs on the other hand have an asymmetric business model, you use their service and they monetize through other channels: a different service they provide, in-app purchase, in-context ads and other monetization tools.
Trying to win back revenue by launching services similar to those of the OTT without a new business model to support it is a foreknown failure as there is no way to directly monetize on RCS.