What is OTT in Telecom and how is it Impacting the revenues of Telcos?

What is OTT in Telecom

Over The Top (OTT) is a platform that facilitates service providers to offer video, audio, and other media over an IP network without any technology collaboration with network operators. Over the years, the growth of OTT has provided a direct challenge to telecom operators across the globe in terms of revenue and customers. As OTT providers offer a close substitute to telcos in terms of features at a much lesser cost, the adaptability and use of OTT apps increased a lot.?Why Telco Operators Should Go for OTT Solution Providers?

The shift?in the preference of mobile users due to the new technology has resulted in a drastic decline in telecommunications revenue and that of all stakeholders of the industry.

How is it Impacting the Revenues of Telcos?

There is a widespread concern that OTTs may impact the profits and revenues of traditional telephony providers. Here are some of the reasons why there is a great shift from telcos to OTT

Customization and Personalized Experience

With the rising penetration of smartphones and 3G & 4G, more and more people are getting access to various types of digital content and value-added features. As now people spend a majority of their time on smartphones, they insist that relevant content is made available to them at all times. The growing demand has led OTT service providers to track their user’s preferences and provide relevant content accordingly.?Create Your Own WhatsApp like Messaging App

Growing Importance for OTT Messaging Apps

For a long time, the main revenue streams of telcos were voice calls and SMS but both these areas have been impacted by OTT providers. Although the use of OTT services requires the utilization of telco networks when it comes to data, there are very little telcos can earn from data revenue. Owing to the advanced features in OTT Apps, users have made a shift from telco SMS and MMS to?OTT messaging, which provides access to exciting features such as emoticons, stickers, etc. along with group conversations.

OTT in Telecom

Telcos have started to adapt to this changing scenario and are making their market strategies accordingly. Two key actionable which telcos can do to prevent their revenue share from going down further includes — Partnering with OTT providers in the first place or developing their own OTT services.

Partnership

A good option for telcos is to set up a partnership with the OTT providers, which will facilitate them to maintain their customer base and gain a part of their share of the revenue. Although this will contribute towards the revenue of operators they will not be able to implement any kind of control on OTT applications.

Developing Their Own OTT Services

Partnering with OTT providers or bundling may grant some additional revenue options for operators but it is subject to limitations. In this scenario, creating their own mobile OTT app comes out as the best option, which will enable them to completely control their operations without any revenue sharing requirements. In order to deliver their own OTT services, telcos can create their own OTT applications or avail of 3rd party software provider.?How Much Does it Cost to Build a Messaging App like WhatsApp or Telegram?

OTT has a very bright future and going forward there are many new attributes that will be added to this technology. With the adoption of OTT by telcos, not only operators will gain but users will also be able to enjoy many new features.