Ott – over the telco the relations and roadmaps of telco companies with the ott players

OTT – Over the TopTelco

Telefónica Digital

The relations and roadmaps of Telco companies with the OTT players

by Gil Cohen

What is OTT ?

�OTT – Over the Top stands forapplications and services that do nothave any infra structure

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OTT comms have seen explosive growth…

OTT comms have experienced

explosive growth…

� Skype-to-Skype calls (including video calls) grew 48% in 2011, to 145 billion minutes (50% crossed a national border)

� Skype has over 200 millions avg. monthly connected users.

� Top selling iPhone, Android and

BlackBerry app in main markets

Source: Gigaom, Skype Journal

64% of App usage is communication & social networking… but increasingly we’re just the pipe

Time spent/day

Smartphone

1h30’’’’

Non smartphone

6’’’’

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� Reached 5 millions users in 5 days

(launch 2nd Dec10)

� ~18 millions active users/month,

30 million registered users by Oct

2011

� >50 million registered users Feb

2012

BlackBerry app in main markets

� Dec11: 1 billion messages/day

� Tens of millions active users

(estimated)

Source: Whatapp Website

Tablet

2h45’’’’

PC

3h50’’’’

19% of App time is “communication”, although 45% is Social Networking

Source: Ipsos MORI “App Tracker”, February 2012

4PDI Building the Future Digital

Smartphones and OTT

�Smartphones have become‘hero’ devices for consumers andlucrative data usage drivers foroperators

�OTT apps offer ‘free’ services toutilize connectivity

�OTT services break the

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�OTT services break therelationship with the consumerand risk mobile operators beingseen as ‘dumb pipes’�Consumers choose operator

services almost entirely on price

Show me the money !

�Monetize by:

•Advertising

•

�WhatsApp partners with carriers inHong Kong to provide free of chargeWhatsApp traffic ( including roaming) when using their service.

�Skype WiFi

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•PSTN Out

•Get acquired

�Skype WiFi

• Get online at over 1 million WiFi hotspotsworldwide and only pay for the time you’reonline with Skype Credit.

… but the market is highly fragmented with no established leader – yet!

App to App&Call in-out

App to App&Call out

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OTT comms players position � Most OTT comms

players are start-ups, requiring monetization sources in the medium term

� Big Internet players are taking positions in this

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In 2011, 9% of messaging revenues was lost to OTT players – 59% increaseBy 2016, $52bn (7%) of telco voice revenues will be eroded

App to App

Messages only

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Mobile Multi-deviceSource: Arthur D. Little

positions in this domain

– Widespread presence in messaging (Apple, Google, Microsoft Facebook…)

– Entering voice OTT domain: Microsoft acquired Skype for $8.5bn in 2011

Its not all roses for the OTT players

No unified experienceIcon overload

Inconvenience

Fragmented/untrusted brands

Barriers to making connectionsApps & services lack cross platform support

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Ability to communicate and share restricted by platform choice

PC and Phone don’t work together

Inability to access data from many locations and devices Customers let down by lack of network coverage

Cost sensitive customers looking for alternatives

No integration between phones and PC applications

Five strategic options exist for telcos to tackle the OTT threat…

Compete

Fragment

Control

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Partner

Fragment

Wait

So what can carriers come up with that competes ?

1.Create a new communications market that

merges the best of Telco with the best of the

web. (Over the Telco)

•cloud based telephony service

•

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••cellular and IP networks

•customer data storage and syncing

Now your mobile # is an

app and a service…

… and the service is

available everywhere

- creates a new category - “Over The Telco”Taking the best of the web and integrating it to the best of traditional Telco

�Only available to TEF customers incountry initially

�Its your real number in the cloud

�Enables multiple devices so neverlose your phone

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Always in syncin the Cloud

lose your phone

�Your phone now works on Wi-Fi andGSM with optimised signal coverage

�Synchronised ringing across Wi-Fi and GSM connections

�National call rates when roaming overseas on Wi-Fi

Your phone in the cloud

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Now your phone service is an app

…and the service is available on any device

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So how does it look like?

TU Go service

SIP Access App

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Operator network

Mediation IT NGIN Media GW

Device

O2 Movie

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