YOU ARE AT:OpinionReality Check: It’s time to take back OTT

Reality Check: It’s time to take back OTT

Technology innovation has been a significant disruptor of established markets for quite some time – and the telecom industry is no exception. In fact, there is arguably more disruption going on in this industry than any other. The growth of messaging apps is unstoppable, but in order for communications service providers to participate in that growth, rather than be threatened by it, they need to innovate, reengage with their users core needs and they really do need to cooperate – now.

According to Juniper Research, over-the-top challengers cost CSPs an estimated $14 billion in lost text messaging and voice revenues in 2014. The OTT challengers continue to deliver cooler, more convenient, more social, mobile and global apps – for free.

Apps from startups like WhatsApp, Viber and Snapchat, and more established companies like Skype, Google Talk and Facebook Messenger, continue to disrupt. When Facebook acquired WhatsApp for $19 billion last year and began introducing voice and video services across both WhatsApp and Facebook Messenger – discussions heated up inside and among some of the largest consumer brands in the world that have relied for decades on the loyalty and wallets of billions of subscribers.

Together, WhatsApp and Facebook connect over 1 billion people: At last count, according to Statista Research, in March there were 700 million WhatsApp and 600 million Facebook Messenger users.

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Faced with disruptive forces, legacy service providers have few choices: They can continue operating business as usual or they can innovate by moving forward quickly with proven, cost-effective “counter-apps.” But given the numbers and the fact that it’s not just the “closed garden” application but the communities connected through the application, it is not realistic to believe individual CSPs can compete head on more successfully by themselves than they can working together.

There are examples of the industry coming together to fight back. A prime example is the GSMA, which has done a noble job of attempting to build a consortium around rich communications services. Initiated in 2008, RCS was positioned as the industry’s answer to Skype, Google Talk, Viber and other OTT players emerging on the market with “Joyn.”

Despite numerous challenges the GSMA continues to carry the mantle for its members, pushing forward with RCS standards and compliant devices, and continued investment in IP multimedia subsystem architectures and interconnection models. They are experiencing some success and we believe they will continue to serve the market with this more traditional infrastructure and standards-based approach, however many years that will take.

Even before Joyn was announced, the Bridge Alliance was formed in 2004 in Asia Pacific with seven companies to address roaming charges across carriers. This highly focused initiative solved real problems and as a result has been quite successful. It now boasts 36 members with over 660 million subscribers across Asia and Africa. They continue to focus on roaming, and unlike Joyn, are not bringing any end-user applications to market, leaving that to their members to create for themselves.

Another great example of industrywide cooperation is the Wi-Fi Alliance, a nonprofit organization that promotes Wi-Fi technology and certifies Wi-Fi products. Their membership is 650 companies strong, and the growth of Wi-Fi has in large part been made possible through their consistently positive efforts since being founded in 2000.

Earlier this year at Mobile World Congress, Jibe Hub announced the growth of its “RCS Hub” one year after initiating the platform (in 2014, also at Mobile World Congress). Jibe Hub, designed to interconnect RCS services, added Deutsche Telekom, Sprint, Vodafone and KPN Mobile, and demonstrated video calling, group messaging and photo sharing across their networks. While not an “alliance” per se, Jibe Hub has successfully attracted major companies already invested in RCS to interconnect more efficiently.

Even with all these initiatives underway, independent OTT challengers are continuing to grow their subscribers dramatically, taking relationships and revenue away.

Notwithstanding the long and expensive development and interconnection of RCS as one means to respond, a new alliance has been formed that brings a proven OTT application that is arguably better than WhatsApp, QQ and other messaging apps, together with a business model that enables the pooling of subscribers who can connect with each other over a common directory that numbers in the billions today – and trumps the numbers the challengers promote.

When the app itself is enhanced with the tremendous assets the CSPs already own – their ability of routing calls and messages to any user’s real number on any connect screen, their billing relationship, their brand and features like geolocation and presence – CSPs as a collective have massive competitive advantages they have yet to unlock.

Some of the largest CSPs in the world today have already rolled out cool apps and they are growing at least as fast as the challengers are, in some cases the number of subscribers opting in are doubling week to week. They’ve recognized the value of their assets combined with apps – and alliances.

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Roy Timor-Rousso is the GM of Fring Alliance. Part of the original Fring development team when the company was founded in 2006, Timor-Rousso left the company and came back as CEO of the company in 2011 and sold it to Genband in 2013. In 2014, he led product development for Fring, including rolling out highly successful white-labeled solutions for a number of mobile operators. This led to the creation of the Fring Alliance, an industrywide initiative to bring together communications service providers to compete with independent over-the-top applications leveraging their collective assets, namely billions of subscribers connected to their networks.

Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.

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