How OTT (Over the Top) Content Will Change the World of Telecom

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Nov 6, 2016

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Ever since its creation, the global telecom industry has seen continuous change. From the early telegraph and voice communication systems to over-the-top (OTT) content, the industry has grown, changed and advanced more than just about any other type of business.

Telecom businesses must now deliver seamless, high-quality voice transmissions, multimedia services and high-speed data transfers in multi-device and mobile environments. Traditionally, telcom’s have been very quick to react to new developments and technological advances, such as the internet and cellphones. However, they seem to be faltering, especially in the area of revenue generation, with their latest challenge — OTT content providers.

Ever since modernization, the world of telecom industry has changed drastically to new advancements. Catering the new requirements and the growth is phenomenal in terms of wireless connectivity and its transmission. From early modes of communication like telegraph & voice over to Over the Top (OTT) went up, changed the telecom industry more than just any other type of business. OTT stands for “over-the-top,” the term used for the delivery of film and TV content via the internet, without requiring users to subscribe to a traditional cable or satellite pay-TV service. Over the top (OTT) is a media distribution practice that allows a streaming content provider to sell audio, video, and other media services directly to the consumer over the internet via streaming media as a standalone product. The global OTT service provider market is highly fragmented, comprising many vendors, both international and domestic. With international players increasing their presence in many regions, domestic vendors are finding it difficult to compete with them in terms of quality, features, safety, and price. Some top OTT content providers are: Akamai Technologies, Apple, Facebook, Google, Netflix, Tencent Holdings, Activevideo, Brightcove, Flixfling, and Microsoft. On a national level, the focus will change to a more holistic digital agenda that creates greater incentives throughout the entire value chain. However, this could increase the risk of fragmentation at the global level.

Over-the-top content providers deliver media over the internet without the use of a multiple-system operator. The internet service provider has no control over the content.

The internet provider also has no control over viewing abilities, copyrights or other redistribution factors of the content. This has had a huge effect on revenues because users no longer need to buy or rent video or audio content, such as video-on-demand, pay television or an IPTV video service, from an internet service provider (ISP). OTT generates content from a third-party source that is delivered to users through the ISP by simply transporting IP packets, thereby bypassing the traditional operator’s network.

With this model, OTT service providers do not require any business or technology affiliations with network operators, allowing them to operate as lean and nimble players in the telecom world. Aided by technological advances such as super-fast internet service, smartphones, open-source platforms and cutting-edge functionalities as well as consumer preferences shifting toward “freemium-based” business models, OTT is seeing an ever-increasing rate of adoption.

What Lies Ahead

The telcom industry will continue to evolve dynamically. There won’t be any clear-cut boundaries between product categories because the products we use now will merge with others to increase capabilities. Industry providers will create hybrid and multi-function offerings to keep up with higher consumer demands.

Customers are increasingly focused on data. Nearly 50 percent of online activities now involve media and video. This trend will lead to industry partnerships in order to provide faster network capabilities while also diversifying service portfolios and driving innovation.

Operators will have to reconsider possible areas of a more discrete value chain position as business-to-business (B2B) approaches become key facets of value creation. From a supply point of view, operators will have to follow more diverse policies governing the industry. On a national level, the focus will change to a more holistic digital agenda that creates greater incentives throughout the entire value chain. However, this could increase the risk of fragmentation at the global level.

At the same time, careful consideration will have to be given to network upgrade strategies. New technologies can help maximize the performance of existing infrastructures, but operators will be faced with the challenge of combining different network standards to optimally support the internet of things. The trend to form partnerships will likely broaden to a new phase of cross-border mergers and acquisitions, with operators focusing on acquiring new vertical-specific capabilities.

The telcom industry will continue to evolve in a variety of ways. Operators will continue to strive to stand out from the crowd through network quality and range of services, backed by further consolidations and the implementation of new technologies to support the huge data needs of the gigabit era.

As demand for high speed data increases, telcom companies are forced to upgrade or expand their infrastructure, cutting deeper into their profits, which are already suffering due to increased usage of mobile apps such as whatsapp, Viber and Facetime. Sustainability is a constant problem for all businesses, but telcom companies might need to work even harder to find new profit generating avenues.

One solution is Fieldengineer.com, an on-demand workforce available anytime and anywhere. By using Fieldengineer.com, telcom companies can cut current operating costs by up to 30%. The need for full-time staff is eliminated, which means no additional equipment to buy or benefits to pay. Companies only pay for the work they need, when it’s needed.

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