There has long been discussion about collaboration between network operators and over-the-top (OTT) service providers, but not everyone shares an idealized view of how that relationship should work.
“Every day, every morning, every night, I’m thinking of how to compete with Fiber, Skype and WhatsApp,” said Giles Corbett, head of Libon at Orange, during a lively debate at Telecoms Tech World. “I spend my time trying to compete with OTTs.”
Panelists pointed to Orange’s partnership with music service Deezer as a successful example of operator–OTT cooperation. Corbett explained why a music partnership makes more sense for a telco than competing in communications services.
“With Deezer, music is clearly not our core business, so a partnership makes sense. But with communications, there’s a sense that it is our business,” he said.
“We want to disrupt ourselves before someone else does it for us.”
Tim Hayson, an evangelist at the Open Mobile Alliance, offered a different perspective: “Working with OTT players is not necessarily a competition. In many cases, OTT providers deliver services very well and that can actually benefit the operator.”
Jose Vallas, VP of partner products at Telefonica Digital, described the landscape as having “different flavours.” He noted that OTT services often avoid exclusive ties to a single operator.
“For example, Spotify is getting really close with Telefonica in Spain, but Vodafone and Orange users can still use Spotify,” he said.
Corbett, who discussed Libon — Orange’s OTT communications offering — in a recent interview, expressed a stark view on messaging revenue.
“There is no future in messaging revenue. Absolutely none,” he stated. “There is no point in continuing to imagine models that revolve around that, and there isn’t much point spending time regretting it either.”
Vallas agreed, recalling that Telefonica had discontinued TuMe, a service operating in the same space Libon targets. “The question is whether this space will be driven by telcos or by others,” he said.
Phillip Julian, principal user experience manager for mobile at Vodafone, offered a more measured take: “SMS is changing, but the industry evolves. Technology progresses, and as long as it continues to address that basic need, the customer will benefit.”
While the operator-dominated panel generated strong opinions, the preceding session from analysts at Analysys Mason added useful context on the broader market trends.
The analysts forecasted that by 2018, roughly one third of smartphone data traffic would come from OTT applications. “We expect to see some response from operators through their own IP services, but those responses are still unclear,” said principal analyst Stephen Sale.
Although there wasn’t complete agreement among speakers, the session made one thing clear: operators are actively considering how to regain market share in the face of OTT competition. The coming months and years will reveal whether their strategic bets succeed.