Telcos must become OTT ‘toolbox’ to survive

This article was authored by John C. Tanner, and was originally posted on telecomasia.net.

Telcos hoping to cash in on – or at least survive – the rise of OTT services must open their network APIs and transform themselves into a toolbox to help OTT players innovate.

The growing popularity and power of OTT services has become a major worry for telcos that see such services eating into their revenues. Telcos still have a role to play in the OTT value chain beyond simple bandwidth provisioning, but finding that role starts with understanding what OTT players want from you, said Mike McDonald, CTO and executive solution consultant at Huawei Technologies.

“Telcos have had the mentality that the OTT players need us and will come to us to partner, but that’s wrong,” McDonald said during an OTT session at the CommunicAsia2012 Summit Thursday. “In reality the OTT player mentality is that they don’t need us Ð not the way we think they do.”

For example, he said, “Telcos think there’s a business case for guaranteeing a 4-Mbps connection for a streaming video provider, but in reality they don’t need that. The web guys have tricks to get around the fact that our network is a bit shoddy for their purposes.”

To that end, telcos need to stop telling OTT players how to use their network and transform it into a tool they can use their own way, McDonald said. “We do have some core assets that can play a role in all this. We can build APIs that help them use our network the way that makes sense to them.”

McDonald admitted that some telcos are reluctant to share APIs because they see it as a crucial business asset, “but the truth is they don’t have the skills sets to capitalize on it that way.”

McDonald advised telcos to focus on their core assets and capabilities, develop a simple and open API and become a comprehensive consulting firm for OTT developers to help integrate them into their network capabilities.

“We need to leverage OTT developers for innovation,” he said. “Telcos can develop their own OTT services, but it’s more likely that they’ll piggyback on [OTT players’] knowledge of the webscape and users, and become a toolbox so the next generation can build on what we’ve done.”

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