Operators in western Europe could grow profits to 15 times their current levels by taking an open platform approach to collaborating with OTT players, according to new research.
The current manual approach, which involves approaching big name OTT players such as Spotify and Facebook on a case-by-case basis, will generate net profits of €160 million over the next three years, research from consulting firm Northstream has predicted.
But the research, which covers 60 operators in 16 western European countries and was commissioned by vendor AsiaInfo, claimed gross profits of €2.2 billion are possible if changes to IT platforms are made.
Specifically, the research recommended operators deploy an open B2B collaboration platform – essentially an API hub – that enables OTT players to automatically upload their services and innovate based upon existing operator data such as location services. AsiaInfo is one of several vendors in the market offering such a platform.
Key to realising the improved revenue is boosting the number of OTT partners, the report's authors said. AsiaInfo’s Andy Tiller recommended operators look to host “a few hundred” OTTs on the platform as opposed to the “handful” of partners they typically deal with now.
Northstream’s Bengt Nordstrom added: “OTTs don’t see operators as a channel to market. It takes to long to set something up from a technical point of view. [Deploying an open collaboration platform] can change that.”
Further, an open collaboration platform will enable the creation of new services such as day passes for pre-pay customers to drive customer acquisition.
The report's authors said the idea is to turn operators’ IT infrastructure into business platforms rather than just support platforms. But a cultural shift is just as important as a technical one, they added. Operators were encouraged to open up to OTT players and view them as potential customers rather than competitors.
Tiller commented: “This is a huge wake-up call. We know from earlier research that 90 percent of operators recognise the need to partner with the OTT community, but many are still sceptical about the business case – particularly the costs involved and the revenue return.
“What this new research from Northstream shows is that deploying an open collaboration platform can ulock a net revenue stream that is far bigger and more profitable than many had imagined.”
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