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From Hate to Love: Facebook, WhatsApp Hot Favorites for MNOs Looking to Partner OTTs to Tap $42.9 billion Market - mobilesquared

From Hate to Love: Facebook, WhatsApp Hot Favorites for MNOs Looking to Partner OTTs to Tap $42.9 billion Market - mobilesquared Image Credit: Facebook/WhatsApp

According to the annual survey from mobilesquared, sponsored by mobile interaction specialist tyntec, four in five Mobile Network Operators (MNOs) are now open to Over-the-Top (OTT) partnerships. The shift in MNOs' stance on OTT services is driven partly by the opportunities that abound for Operators in partnering with OTT service providers to augment their revenues via innovative bundling strategies, mobile advertisements and co-branding. The survey found that over half (55%) of MNOs have already formed or expect to form a relationship with an OTT partner by the end of 2014 compared to only 36% in 2013. Of these 55% MNOs, 14% said that they have already partnered with Facebook and/or WhatsApp, with another 25% looking to partner with these hugely popular OTTs in future.

According to the survey, 40% of mobile operators said that OTT services have impacted their revenues over the last 12 months with 33% of MNOs seeing up to a 10% revenue decline in the period. mobilesquared forecasts that the global mobile operator opportunity for OTT communication will be worth $42.9 billion in 2018.

Survey results from previous years by mobilesquared showed that imposing surcharges, charging for data or blocking access to OTT services are no longer seen as viable business models to help MNOs stand up to the financial pressure from OTTs. Seven in ten (71%) MNOs believe an increase in customer loyalty is the predominant benefit of forming an OTT partnership. Consequently, 45% of those surveyed saw opportunities to monetise OTT services through the inclusion of data as part of the standard data bundle.

Thorsten Trapp, CTO, Tyntec
Decreasing revenues are a priority for MNOs and it's clear that partnering with OTTs will harvest opportunities. Equally important, MNOs and OTT players are on uncertain ground as they try to find ways to work together: operators struggle with their diminishing subscriber base and the possibility of having to make costly infrastructure changes, while OTTs are quickly learning that they too will need to find a way to generate revenue in order to grow. That's where companies such as tyntec come in. As an overlaying international network provider, tyntec enables operators to monetize OTT services without having to enter into separate agreements with a myriad of OTT players; gain cost efficiency; and provide the global access that OTTs require, but cannot easily be delivered by operators given the international fragmentation of the telecom industry. With a decade-long experience in solving business and operational challenges right where telcos and OTTs collide, tyntec provides the global perspective that operators lack but OTTs need.

Nick Lane, Chief Insight Analyst at mobilesquared
OTT communications has always been about growing a multi-million user base and market capitalization. But we're now seeing the maturation of the OTT communications space and the need to monetize the user base. The quickest route to monetisation for the majority of OTT communications providers will be to seek out partnerships with mobile operators to capitalize on their end-user relationship and billing functionality.

Author

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

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