As the debate over so-called over-the-top (OTT) service providers such as WhatsApp and Facebook continues to rage in the mobile telecommunications industry, MTN South Africa CEO Ahmad Farroukh has called for “balanced cooperation” between operators and OTT players.
Farroukh says in a statement that this cooperation is required to create what he calls a “win-win ecosystem” and that operators must put a plan in place to avoid becoming “dumb pipes” over which OTTs are the only ones that profit.
“Operators cannot be in complete control of the Internet ecosystem, while a broadband pipe that lacks appealing content and applications means little to end users,” he says.
Farroukh says mobile network operators and OTT players can either fight each other or opt to work in partnership to define access and structure a deal fair for both parties.
“We need to stress that there should be no free ride for OTT players,” he says. “Mobile network operators will protect their customer bases and revenue streams. Rules of engagement will have to be defined between operators and OTT players. Involvement of global forums that represent operators, such as the GSMA, will most likely be necessary to define the rules of engagement.”
Farroukh says strategies where operators charge for value-added services and quality of service make sense. “Those that want a premium service will be willing to pay a premium.”
Mobile operators need to put a plan in place to avoid being forced into the role of providing a “dumb pipe”, he adds. This involves investing in and providing access to infrastructure, but allowing OTT providers to own the customer and make money in the future, he says.
“To be a truly successful, OTT players and mobile network operators have to go for a bigger customer base beyond their own and leverage on global reach. Mobile network operators have made substantial capital investment in licensing and spectrum, acquiring and building their customer bases and investing in building trusted brands. Operators have been catalysts and economic enablers and have contributed significantly to the fiscal budgets of many economies – all of this not to be shared for free.”
He says OTT players that cooperate with mobile operators can “deepen the relationship between customers and the operator brand, build loyalty, reduce churn and help improve the customer value proposition”.
“Through OTT players, operators can build relationships with subscribers on other networks as well.”
He warns that if operators and OTT providers are not able to reach an understanding, then “sooner or later” the operators will “become like the incumbent fixed networks that they themselves, the mobile operators, neutralised along the years”. — © 2014 NewsCentral Media
