OTTs vs MNOs

OTTs Vs MNOs
Competitor or Partnership
OTTs Vs MNOs Kamal Taman Dec-2016

Content
Introduction
What is OTTs ?
OTTs growth Enablers
Impact of OTTs on MNOs
MNOs attitude towards mobile voice OTTs
MNOs trails and opportunities
OTTs trials to expand as ISP

Introduction
Push Pull Technology concept :

Introduction

What is OTT ?
“OTT(Over-The Top) refers to applications and services, which are accessible over the internet and ride on
Operators’ networks offering internet access services e.g. Social networks, search engines, amateur video
aggregation sites, etc.”
Those Players are Major Enablers and Drivers for Sector Growth

The explosion of e-commerce, advertising, and digital media content that now travels over the networks of
telecom players has created significant new value, but telecom companies themselves have been unable to
benefit. Instead, that value has been largely captured by digital newcomers that have built successful
business franchises “over the top” of the telecom operators’ networks. Think Skype, Google, Facebook,
Amazon, Netflix, and PayPal, among many others.
Enablers & Drivers for Growth :
1) Continuous evolution of cellular technologies, providing better network capacities in terms of bitrates,
latency, coverage, mobility, etc.
2) Increased Growth of mobile connected devices and connections especially via Smartphones.
3) New trends in Mobile Phones : Advanced Capabilities ( Integrated sensors, More Powerful
Microprocessors with less energy consumption, Integrated camera with high resolution )
OTTs Vs Mobile Operators Kamal Taman Dec-2016
OTTs growth Enablers

OTT players lead the second phase of VoIP
• The high cost of voice calls has long provided incentives for new players to find ways to market by
offering lower cost services.
• Several ambitious OTT players have already had an impact on mVoIP growth and on the total voice
market. Skype, for instance, already represents over 25% of cross-border international call minutes
OTTs growth (1/5)

OTTs growth (2/5)
Video is increasingly moving, such that Netflix now accounts for nearly half of the subscription
TV-on-demand revenues in Europe

OTTs growth (3/5)
Social Media
Market leader Facebook was
the first social network to
surpass 1 billion registered
accounts and currently sits at
1.71 billion monthly active
users.

OTTs growth (4/5)
Facebook case study
Number of monthly active Facebook
users from 2008 to 2016. As of the
third quarter of 2016, Facebook had
1.79 billion monthly active users
Facebook's revenue grew from 7.87
billion in 2013 to 17.93 billion US
dollars in 2015. That year, Facebook
accumulated a net income of 3.69
billion US dollars.

OTTs growth (5/5)
1,590
1000
900 853
697 640
555
400
320 300
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Facebook Whatsapp Facebook
messenger
QQ Wechat Qzone Tumber Instagram Twitter Baidu Tieba
Social media OTTs Vs No. of Users
No. of Users
886
461
336 307 286 247 212 156 139 134
0
200
400
600
800
1000
China Mobile,
China 2, 3
Vodafone
Group 3
Bharti Airtel
Group
China Unicom,
China 2, 3
América Móvil
Group 3
Telefónica
Group 3
China
Telecom,
China 2
Deutsche
Telekom
Group
AT&T Group 2 Verizon
Wireless,
United States
2
Operator Vs Connections, inc. cellular M2M
Connections, inc. cellular M2M
Top 10 number of users MNOs Vs top 10 OTTs

online messaging applications has apparently impacted the volumes of SMS, with consequences
for voice and messaging revenues for traditional telecom operators.
.
Impact of OTTs on MNOs (1/5)

Loss to OTT Revenues in 2016 expected around
50B$ in voice (7%)
Lower ARPUs but Higher Traffic with increase
in number of subscribers

• Revenue Reported revenue decreased by 3.0% over the year.
• EBITDA on a reported basis fell by 2.5%.
35.48
41.02
44.47
45.88
38.82 38.04 38.35
42.23
40.97
6.96
4.2
11.15
5.7
4.02
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013 2014 2015 2016
FB Revenue
Vodafone Group YOY Revenue growth (Vodafone Annual Report 2016)

35.48
41.02
44.47 45.88
38.82 38.04 38.35
42.23
6.96
4.2
11.15
5.7
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013 2014 2015
VF Revenue VF Net Income Linear (VF Revenue) 2 per. Mov. Avg. (VF Net Income)
0.272 0.777
1.974
3.7
5.09
7.87
12.466
17.927
-0.56
0.229 0.606 1
0.053
1.5
2.94 3.688
-5
0
5
10
15
20
2008 2009 2010 2011 2012 2013 2014 2015
FB Revenue FB Net Income Linear (FB Revenue) 2 per. Mov. Avg. (FB Net Income)
Revenue growth Vodafone Vs Facebook

Growing Revenues for OTT and Stagnation of MNOs
- OTTs 53% increase from 2010 to 2021
- Telecos 1.7% increase from 2010 to 2021

• A number of market leaders, including incumbents, have prohibited or hindered the use of mobile voice
OTT (VF-EGY).
• T-Mobile and Vodafone Germany have lifted the ban on VoIP and impose a surcharge.
• VFE UK allow with data plan
• some market leaders who initially banned usage are now exploring new revenue models.
MNOs attitude towards mobile voice OTTs

MNOs trails and opportunities
We want to be more than
just a pipe. In the new
world we want to be a hub
of it all. We hope we are a
bigger part of the value
chain
government “milking”
operators because of this,
through taxes, spectrum
prices and excise duties,
among other fees
Hatem Dowidar CEO Etisalat International

MNOs trails and opportunities (1/3)
Possible Strategies
IOT Solutions
Big data analytics and
Content provider
Compete with OTTs

1) Compete with OTTs :
Jibe:
Global operators,35 operator, the GSMA, and Google today announced the launch of a mobile industry
initiative to accelerate the availability of Rich Communications Services (RCS). The initiative will enable all
operators worldwide to provide an open, consistent, and globally interoperable messaging service across
Android devices. Operators have agreed to transition toward a common, universal profile based on the
GSMA’s RCS specifications and an Android RCS client provided by Google in collaboration with operators

2) Big Data analytics and Content provider :
Acquiring content companies :
• AT&T to Acquire Time Warner.
• AT&T Acquire Quickplay Media.
Big Data Analytics :
• Location Based Services.
• Prices marketing.
• Operation Efficiency Promotion.
• Customer Experience Enhancement.

3) IOT Solutions :
Potentially the most disruptive new trend impacting networks is the arrival of the Internet of Things, or IoT.
Industry experts predict that by 2020, about 21 billion connected devices will be collecting data and sending
it across the network to IoT applications. For service providers, the pending IoT boom presents a milestone
opportunity as their mobile voice and data revenues slow

“We don’t get a free ride,” said Ebele Okobi, Facebook head of public policy for Africa. If anything, she
said, the service offered by Facebook — it owns messaging service WhatsApp — generates revenue for
operators.
We don’t
get a free
ride 

SpaceX Trial :
Satellites
Google Trial :
Project Loon
invest in SpaceX Satellites
Facebook Trial :
Internt.org program

Thank You

References
• Cissco The Zettabyte Era—Trends and Analysis Jun 02, 2016
• Impact of Over the Top (OTT) Services on Telecom Service Providers Indian Journal of Science and
Technology, Vol 8(S4), 145–160, February 2015.
• http://www.analysysmason.com/About-Us/News/Insight/OTT-messaging-volumes-Jan2014-RDMV0/
• “Over-The-Top” Services: Enablers of Growth & Impacts on Economies, ITU REGIONAL ECONOMIC AND
FINANCIAL FORUM OFTELECOMMUNICATIONS/ICTS FOR Arab Region, 29 December2015
• Disruptive Threat or InDecative Opportunity? Scenarios for Mobile Voice OTT.
• http://www.gsma.com/newsroom/press-release/global-operators-google-and-the-gsma-align-behind-
adoption-of-rcs/
• https://jibe.google.com/
• http://www.ericsson.com/spotlight/media/blog/four-models-competing-ott-world/
• http://about.att.com/story/att_completes_acquisition_of_quickplay.html
• https://www.techcentral.co.za/facebook-microsoft-blast-sas-mobile-operators/62739/
• http://www.vodafone.com/content/annualreport/annual_report16/downloads/vodafone-full-annual-
report-2016.pdf
• http://carrier.huawei.com/~/media/CNBG/Downloads/Technical%20Topics/HeavyReading%20Huawei%20B
ig%20Data%20customized%20report/HeavyReading%20%20Huawei%20Big%20Data%20customized%20re
portfinal1A.pdf
• https://www.kaaproject.org/telecom/
• https://www.ericsson.com/res/docs/whitepapers/wp_iot.pdf

OTTs vs MNOs

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