OTT Partnering with Frenemies
Telcos responded better to the OTT threats and took to monetizing usage over the networks through direct partnerships
The rapid march of a range of over the top (OTT) service providers posed both a threat and an opportunity for the mobile service providers. The telcos that were quicker to focus on the opportunities were also open to collaborating more with the OTT providers.
The collaborations were mostly with OTT majors like Twitter and Facebook, partly because these players drove much of the Internet access traffic onto the 2G as well as 3G mobile networks in India and partly because the subscribers were anyways using telcos’ networks to access OTT services. The OTT usage was no longer limited to content access and social networking but also extended to chat and messaging services, which started eating into the SMS revenues of telcos. Worse, voice was not being spared either, with OTT applications like Skype and Viber used for international calling, in particular.
In fact, Facebook’s India user base has literally swelled multifold over the past three years, between 2010 and 2013. India surpassed the 80-million mark for monthly active Facebook users around mid of 2013, becoming in the process the No. 2 Facebook using nation after US. LinkedIn clocked 20 million registered users while Twitter was estimated to have in excess of 30 million users in India.
Vodafone India offered a free Twitter pack for a period of three months starting July 29, 2013, to both its prepaid and postpaid mobile subscribers. The offer, though, was valid only when Twitter was accessed using the native or default browser and charges were applicable when users clicked a link on Twitter that took them to any other website.
Before Vodafone, Reliance Communi- cations had also run a similar free Twitter offer, during the Indian Premier League season, presumably with the aim to bump up its mobile Internet user base and uptake.
Even earlier in the year, Facebook tied up with Airtel and Reliance Communications (as part of its tie-ups with telcos globally) for offering Facebook messaging to the telcos’ subscribers for discounted rates.
Towards the end of 2013, in December to be more exact, Bharti Airtel joined the league of telcos globally who joined hands with Viber for the Viber Out service, an equivalent of Skype’s paid OTT calling service to the landline and mobile phones.
What Next?
Going forward, the collaborations between telcos and OTTs are only expected to become deeper, wider and more long-term in nature. The two parties have been exploring ever new models to gain revenue and market shares in their respective segments.
For telcos, it’s currently about growing their 3G subscriber base and usage, while for OTTs it’s ultimately about gaining greater share of the Internet advertising revenues in emerging markets like India.
A recent tie-up between Tata Teleservices, YouTube and Apalya Technologies was done to announce a new video plan called YouTube Recharge. The plan aims to bring down the mobile YouTube viewing cost by as much as 50 percent. A release accompanying the announcement also noted that about 40 percent of traffic on YouTube came from mobile devices.
Given that advertising is Google’s key source of revenues from YouTube and is directly related to the number of videos viewed on YouTube, it serves its interests if users watch more videos, which in turn prompts more users opting for the service on the telco’s network. The coming months will see more such innovative telco-OTT tie-ups taking place.