85% of Asia Mobile Service Providers Want OTT Partnerships

Fully 85 percent of surveyed Asia-based mobile service providers believe partnerships with over-the-top (OTT) providers give, or will give their organizations, a competitive advantage in the region that will contribute to revenue and subscriber growth, Alepo says.

Since most apps now are developed by third parties, not access providers, if app bundling is desired, that means partnerships with app providers. The big issue is what sorts of apps to bundle, and which bundled apps will drive the greatest value for access providers (ISPs, mobile operators).

While just over half of respondents have working partnership agreements with OTT providers today, nearly all expressed interest or intent in forming OTT partnerships.

Today, OTT services represent a $28 billion market globally, projected to double to $54 billion by 2019, Alepo says. Or course, those gains for app providers also will produce losses.

The challenge is huge. Ovum predicts that operators will lose $386 billion to OTT voice providers from 2012 to 2018. One can disagree with the magnitude, while agreeing that product substitution is happening.

In India alone, the growing popularity of OTT messaging apps in the past two years has siphoned $2.76 Billion from operator text messaging revenue, according to Ovum.

In the Asia Pacific region alone, OTT TV and video revenues are expected grow to $18 billion by 2021.

So it is not surprising that more than 78 percent of respondents say third-party OTT players represent a threat to their business or revenue.

Fully 67 percent of respondents agreed that  “OTT providers are able to provide lower-cost service options.” Some 63 percent agreed that  “traditional mobile voice revenues are stagnant or declining while OTT voice services are on the rise.

Also, 60 percent say “OTT providers are able to innovate and better market their services to our subscribers.”

That is why app development will be such a big focus at the upcoming Spectrum Futures conference. Apps now are created mostly by third parties, so access providers mostly have to partner to create bundles of value featuring apps.

Here’s a  fact sheet and Spectrum Futures schedule, illustrating the planned discussion of how and where ISPs and app providers can partner, as well as the business issues to be confronted.

Venture capitalists will explain what they are looking for, as well.