OTT services to make or break operators

Managing relationships with over-the-top service vendors such as Microsoft, which owns Skype, and Google with YouTube, will be vital in determining telcos' success in evolving telecommunications arena, say industry watchers.

COMMUNICASIA, SINGAPORE--Incumbent telco players should refrain from acting on their instinct to block over-the-top (OTT) services such as voice over Internet Protocol (VoIP) and online video streaming, and instead find a way to coexist with OTT providers, urge industry watchers.

Rhys Arkins, Asia-Pacific director of technical sales of Acme Packet, a session delivery network vendor, said the first reaction of a telco would be "protectionism" and to block out the OTT services running atop its network. Alternatively, they would look to extract money from both its customers and these service providers by guaranteeing--for a fee--that the service to customers would be consistent, he pointed out.

Arkins, a keynote speaker at the network infrastructure conference held in conjunction with the CommunicAsia 2011 tradeshow here Tuesday, pointed out that such measures are "not positive" for enabling good customer service experiences.

Telcos should instead look to provide these OTT services the quality of service (QoS) and security that they are capable of delivering, to bridge the considerable gap between traditional fixed telephony services and cheap, wireless voice, videos and messaging services, he suggested. These OTT services generally have no service assurances and minimal security, and are unpredictable, he added.

Another conference speaker, Vincent Boudville, agreed with Arkins' assessment. Director of South Pacific business consulting at Huawei Technologies, Boudville said OTT will "make or break operators" in terms of how they manage relationships with these service providers.

Beyond OTT issues, he urged telecom operators to look beyond "next-generation broadband network (NBN) 1.0" which looks specifically at how the fiber infrastructure deployment will boost national economies and how much it would cost to roll out the network.

He called on them to explore the possible business models of "NBN 2.0", which incorporates both infrastructure considerations and managing a growing ecosystem as more service providers deliver offerings over NBN and more users consume such services. Parties within the ecosystem include, among others, media rights owners, users who generate content and mobile device makers, Boudville said.

In turn, possible business models that could arise from NBN 2.0 would include charging users based on the traffic or data used, differentiation of pricing based on QoS and packages based on different tiers of service delivery, he suggested.

A scenario that is most likely to happen, though, would be operators adopting a "hybrid" of these possible models, depending on the regulatory and business landscape the telco operates in, he said.

"It is likely that regulatory intervention is needed to make these business model options possible though," Boudville added.

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