How Can Service Providers Compete with OTTs?
Some service providers are regarding the strongest users of their network as their worst enemies… the OTT’s. Those mystic folks who reside in data centers, earn billions and billions and don’t even have their own network.
“Think specifically about the OTT (over the top) Cloud applications that run on the infrastructure you provide: Facebook, WhatsApp, Skype, Google Maps and more. You provide the infrastructure, the satellite links, the entire spectrum of network services (security, backup, bandwidth and more) . . . and OTT apps use it all to siphon revenue from you with lower-quality and often-free apps—from messaging to navigation to telephone.”
Service providers are bleeding! Over the last few years, service providers have had their lunch absolutely devoured by OTT (Over the Top) applications and services: When Skype (or WhatsApp, or Google Hangouts, or Facebook Messenger) allows users to make calls over Wi-Fi and data, for example, consumers pay less than a network would charge them for making an ordinary phone call. When users use the chat functions embedded in these apps, service providers can’t capture the revenue provided by text-messaging rates. When someone cuts the cord and switches to exclusively watching Netflix (or Hulu or Amazon Instant Video), then an entire cable bill’s worth of revenue is lost. As of 2014, telecom companies alone have lost $386 billion to OTT apps, and the meter is still running.