~ With the rise of OTT content providers, telecom operators have got yet another opportunity to increase their revenues ~
With the rise of OTT content providers, telecom operators have got yet another opportunity to increase their revenues. In a conversation with ET’s Tina Gurnaney, Nishikant Nigam, EVP and chief delivery officer at CSS Corp, talked about how telcos can make the most of OTT content platforms and collaborate strategically. Edited excerpts:
How do Indian telcos see the content space?
Indian OTT market has about 25 players. Telcos are offering regional content and Live TV services, for example, Reliance Jio TV has over 550 live TV channels, helping them increase their 4G subscriber base. Airtel TV app offers 300 LIVE TV channels, including 29 HD channels offering 6000 plus movies and regional shows. This has made the COAI (Cellular Operators Association of India) pressing the need for licensing regulation to level the competitive landscape with OTT players.
How are telcos collaborating with OTT content providers to increase subscriber base?
There are 2.5 billion digital customers globally who are under 25 years of age, as per McKinsey. On an average, these young digital users spend 315 minutes online each day as compared to 126 minutes for customers over 25 years. There is a big battle amongst telcos to conquer the attention of these digital native customers.
Telcos have no choice but to collaborate with OTT providers to sustain their market position. The race to maximize revenue opportunities has led to free subscriptions for users, partnerships, collaborations, and acquisitions to create win-win situations in this space. Notable examples in the OTT-telco space being AT&T acquisition of Time Warner, Reliance Jio partnering with Discovery Communications, Vodafone offer of free 12 month Netflix subscriptions, the rapid expansion of Airtel’s video OTT platform to 66 million subscribers and the massive spike in the subscriber base of its music app Wynk to 102 million subscribers.
What are the recent trends that you’ve observed in the telecom-OTT space?
Telcos of the 90s were operating in silos. With the advent of digital, today telcos have created an integrated ecosystem that involves various stakeholders like news agencies, content aggregators, payment gateways, over the top (OTT) media services and record labels. This model significantly increases service consumption and average revenue per customer (ARPC) through a single platform.
So, it’s quite evident that traditional telco business models are getting jeopardized with increasing dominance of OTT even in the areas such as messaging and voice. Some of the key market trends seen are personalization and customization, technology adoption to drive high data rates, OTT messaging, content distribution, and user-generated content.
Consumers are putting a premium on more personalized experiences and customized services. Data consumption has risen due to OTT adoption and given way to video on demand. OTT messaging has also caught up, fast IP networks have enabled OTT messaging service providers to offer services such as voice messages, media sharing, microblogging, stickers etc.