Telco chiefs back OTT partnerships

Operators will have to adapt, open up and partner with disruptive OTT players and others to stay in the telecom game as the industry becomes reshaped by cloud services, connected machines and virtual goods.
That was the theme of a keynote session Tuesday morning at the Mobile World Congress in Barcelona, in which executives from the operator and OTT sectors pitched their vision of where the mobile industry is headed.
Talmon Marco, CEO of OTT messaging service provider Viber, wasn’t shy about touting the success of OTT services or their impact on revenues, but pointed out that OTT messaging services succeed not because they’re free, but because they offer a better experience than the services they replace.
“SMS hasn’t changed since 1993,” he said. “Consumers want innovation. That’s why OTT services succeed.”
Marco was also dismissive of efforts like joyn RCS, describing it as the telecom equivalent of the old joke that “a camel is a horse designed by a committee”.
“Only nine operators support it, only a handful of handsets support it, and the features are stuff we do already,” he said.
However, Marco also admitted that he’d rather partner with telcos than fight them, saying that Viber can benefit from things that telcos can provide, from better network performance and operator billing to better security.
“Cooperation is the way to go,” he said, adding that Viber had just inked a partnership with Indonesian operator Axis to offer reduced price packages for customers using Viber.
Deutsche Telekom CEO Rene Olbermann said that OTT services are definitely cutting into the telco’s voice and messaging revenue, but there was no sense in complaining about it. “That’s a fact of life and we just have to deal with it.”
Suk-Chae Lee, CEO of KT, agreed. “No one can stop OTT,” he said.
Olbermann sketched out a future in which OTT communications services, cloud and M2M will be major trends that will require telcos to think of new ways to build and run networks.
To that end, he said, the future model for telcos will require three things: smart, integrated and efficient all-IP networks with customized QoS for different traffic and service types; becoming innovative service enablers by opening APIs to third parties; and an open culture that embraces cooperation and partnerships with other players, particularly OTT service providers.
Lee’s own take on the future of mobile broadband centered around the development of the virtual goods sector, which he said will be the growth engine of the new digital economy, worth an estimated $192 billion by 2016.
Lee and said operators need to work together to build a common market for virtual goods – and they’d better move fast before web giants and OTT players dominate the market first.
“For telcos, it’s paramount to serve this untapped opportunity for the virtual goods market if they want to prosper in the new economy,” he said. “We should recognize the necessity to innovate network infrastructure to support this.”