Streaming Together: The Growing Force of Telco-OTT in a Digital Era

By: Hazem Metwally

(This article originally appeared in Amcham Business Monthly)

Once upon a time not so long along ago, there I was with my cousin walking around Zamalek, Cairo’s buzzing neighborhood, to the nearest cassettes and videos store on one summer afternoon. We would walk into the tiny store and just “browse”… we could see the owner sitting on his corner desk, messy with a stacked number of “Now Thats What I Call Music” cassettes, pressuring us with his eyes to buy just about anything so that we could leave and make room for others. For us, this store was a familiar space, where we could feed our curiosity with a traveling poster on a VHS cover or a band that’s making its way to the billboard charts, or the latest blockbuster. Such stores represented possibility, adventure, very often togetherness and nostalgic happiness. 

Fast forward to today, what did it miss out on? I would say lot! It took at least three to six months to have a piece of produced content on VHS or cassette from its release, which sounds insane in today’s world. We have since then gone quite far, and I believe we are just in the early part of it. 

We have since then gone quite far, and I believe we are just in the early part of it. 

Over the last decade, cloud and streaming content is becoming the increasingly popular set-up; some of the world’s biggest entertainment players and social platforms are providing their content services based on streaming. The last 10 years have ushered in a rapid progression of at-home entertainment such as Netflix or iTunes, racking up millions of subscribers. Massive volumes of user generated content are being streamed up and down social platforms. Such applications would have never been possible with the networks of yesterday. 

It was in 1997 that Netflix was created, and almost 20 years later, the largest global rental store “blockbuster” closed down its last shop, so did that neighborhood rentals store.. now, cassettes are nothing but relics. 

It only takes one great idea. 

While Netflix’s early adoption of streaming in 2007 made it the entertainment giant that it is today, its business model was disruptive from the start. They made it possible and affordable to consume far more content in a shorter amount of time. This gave customers better value, and empowered the customers with instant choice, while setting the stage for the future of entertainment as we have it today. The direct-to-consumer pivot was a preamble to what streaming can do, and the reality is that right now more and more people rely on instant entertainment that they can access through their phones. 

The opportunity is there.

In the past 15 years, the composition of the industry has shifted tremendously, going from who is online to everybody is online; this is an era of hyper-connectivity and it hasn’t only shaped the way we interact and the way we consume content but the way we live. To make that point clearer think of the number of applications that you personally use vs few years ago.

Egypt’s young demographic comprise almost a whopping 50% of the entire population. What characterizes this group is that they are “always on” and that they show a different usage behavior compared to that of the traditional “ex-analog” consumer. According to a report by Mckinsey & Company, on average those young digital users spend 315 minutes online each day (vs. 126 minutes for customer over 25 years). 

In addition to digital’s popularity among the youth, there is also the trend of “mobile-only” internet access. For example, around half of all active social media users access their accounts solely through their smartphones. Together, these trends - digital and mobile access - contribute to an overwhelmingly growing strategy for partnerships between telcos and OTT (Over-the-Top): providing audio, video and other media over the internet, potentially bypassing traditional content consumption means. 

The digital revolution is an opportunity to existing business models in our industry.

The digital revolution is an opportunity to existing business models in our industry, with growth strategies that transforms operational efficiency and also lay the groundwork for innovative opportunities in which we can be competitive by virtue of our core competencies. For example, during the recent years Etisalat has transformed its Tariffs (a core telco product) to more elaborate ones with a multitude of choices, that the customer can administer digitally and seamlessly. The idea is to utilize the digital channels to empowering the customer with more real time choices according to their consumption habits without the need of going through any of the traditional methods.

Streaming together for the future. 

Gone are the days when service providers used to sell themselves on just the premise of providing unlimited talk time or super fast data. Now, it is about the experiences that integrate our core service offerings with entertainment, providing a more nuanced approach to customer acquisition, engagement and retention. At Etisalat Misr; we’re developing our own OTT services that provide a faster route-to-market. 

A great example would be Etisalat Music; a digital streaming application to listen to the latest music & millions of Arabic & International songs. The web and mobile app lets audiences stream their favorite music and release on the go with the best pricing without consuming from their internet bundles, which offers a competitive advantage over other music streaming apps; that require ad-free monthly subscriptions or album purchases. 

Today, we’ve not only introduced services such as Etisalat Music, News, TV & Sports, we are continuously working to make them even better and more customer centric. This is an ongoing journey with the ever evolving customer expectations.

Great Strategy or Great Timing, or both? 

Partnerships between service providers and OTT players serves as a win-win for all stakeholders as we mutually benefit from the exposure each of us provides. We are continuing to pursue digital growth by leveraging our infrastructure advantage and customer base with OTT partners' premium, on-demand content libraries; whereas OTT suppliers get the additional reach as well as additional revenues. The consumer is also benefiting; as they have the option of accessing a wide variety of content through existing bundles / packages with their service provider. 

The name of the game is excellence in execution and partnerships. 

We are after all, not only providers of our own digital products and services, but also enablers for other sectors by providing the essential connectivity infrastructure for functioning and growing industries in the digital economy which results in a growing demand for broadband access.

Direct carrier billing is at the core of many OTT-telco partnerships as well. Since Egypt’s card payment is still not as widely available to all subscribers. We’ve empowered users to pay for their subscription fees to partners such as Watch It as part of their monthly telephone or data bills. More choice for our customers!

Projecting the possible. 

Ultimately, our services are being shaped by customers’ demand and they are the key in this equation. With easy and convenient access to a range of advanced communication applications, technologies and tools, consumers and even Enterprises are interacting and sharing more content than ever before. Telcos and OTT services have both played a big role in the current trend of social sharing, content distribution and instant messaging and now that it is such an intrinsic part of our daily lives, it is obvious that combining different disciplines (OTTs, Media, Telcos and others) benefits the whole.

Navigating what’s next, this is where our future lies and this is how players can stay relevant and hence stay in the game.

Anything but ordinary.

I’ve always believed that what makes us stand out in Etisalat Misr, our core key differentiator is our attitude. We really focus on customer retention versus acquisition; that is where we drive value to customers, our people, shareholders and community. How we attract you is not only through the availability of options including tiered pricing, bundle packs, incentives but also how we retain you. We do this through ongoing investments in our network, services, people skills and a thrive to improve every day not only in Egypt but throughout our group footprint. That is how we’ve continued to be among the top 25 global brands for the fifth year in a row.

In the digital economy, connectivity really counts. Now is the time for all of us, to capitalize on creating value, growing our assets, and scaling up our offerings through partnerships, innovation and creativity. The possibilities are huge!