Opening Up the Video World for Telcos
Over-the-top (OTT) businesses use telco networks as the medium through which they deliver their services—video services being among the most common. Nimble OTT businesses have been able to out-maneuver large telcos when it comes to monetising video and eat into their revenues using the telcos’ very own infrastructure. For instance, according to a survey, the telecommunications industry lost USD 386 billion between 2012 and 2018 from customers using OTT voice applications [1].
A typical case would be that of the Indian market, which has 25 different OTT providers; telcos there have managed to forge partnerships with OTT providers to offer packaged services to video customers with positive outcomes for all parties involved and saw upward trends in the OTT subscription base. This has led to an increase in service and data consumption rate as well as the average revenue per customer (ARPC) [2].
Additionally, as telcos invest further in upgrading their network capabilities to 5G, HD video on the go will become prevalent, as considerably faster transfer speeds reduce buffering time and lag [3]. As consumers increase their video consumption volume, it becomes even more important for telcos to monetise the video content being delivered over their infrastructure.
A Viable Model
In South Africa, Cell C, one of the country’s largest mobile operators, teamed up with Vubiquity, a global content aggregator and distributor. This relationship has allowed consumers to enjoy live and linear video content from across the world—as well as movies, sports, gaming and more—on any device or platform.
Vubiquity connects content creators and owners with video distributors and delivery services. Combined with MX1’s service infrastructure and delivery technology, the unique on-demand entertainment solution, called black, is able to potentially reach 16 million of Cell C’s mobile subscribers across South Africa. Content rights holders are thus able to tap onto a single platform and access a large consumer base quickly and seamlessly, through a supply funnel that involves an aggregator, delivery technology and a mobile operator [4].
A “Win-Win” Situation
One of the major advantages of an OTT-telco partnership for consumers is the simplification of billing and pricing through carrier billing. With internet and mobile infrastructure being packaged together with content, subscribers can aggregate billing and pay just one provider every month.
An additional advantage is the ability to enjoy content at any time and on a device of their choice, rather than being limited to linear television broadcasts. As subscribers consume video content on the go, personalised and targeted advertising will lead to greater relevance and engagement with ads, in turn bringing in additional revenues for the telco. For example, location-based ads can be delivered with video on a mobile device at a music concert or sports venue.
A Burgeoning Ecosystem
The revenue derived from bundling deals between premium OTT video providers and telcos or TV operators is predicted to grow nearly sixfold, from USD 798 million globally in 2017 to USD 4.47 billion in 2022 [5].
The partnership between telcos, OTT aggregators or providers and content delivery solution suites such as MX1 makes for a mutually advantageous relationship for all parties involved. It is a business ecosystem that can transform itself into a tightly integrated delivery model based on existing technological interconnections—helping OTT providers reach a large audience and enabling telcos monetise the content streaming through their networks.
Ultimately, the consumer benefits—ease of use and billing, the variety of content consolidated from global sources, and the ability to consume it wherever, whenever and on any device.
Contact us for more information on how we can help you deliver your video content and become part of this ecosystem.
[1] The Onslaught of OTT
[2] Telcos Have Great Opportunity to Collaborate With OTT Providers
[3] 3 Ways Telecoms Will Monetize 5G
[4] Vubiquity & Cell C: Beyond the Norm
[5] Telco–OTT Video Partnerships Revenue Forecast Report
