The Over the Top Dilemma - Hug, Stiff Arm or Keep Enemies Close? Part 2

Jim Machi : Industry Insight
Jim Machi

The Over the Top Dilemma - Hug, Stiff Arm or Keep Enemies Close? Part 2

Last week I delved further into the Over the Top (OTT) players competing with the service providers that their services are running on. I ended that blog with comments about service providers needing to “offer value” and a forward pointer here to this blog. So what can they do to compete with the OTT players?

1.  First of all, the service providers know how to really bill. You may laugh, but it’s very important and not to be taken for granted. The OTT services may be free for a basic service, but they do charge for beyond basic service. And many subscribers, whether they are consumers like me, or businesses, would rather pay a single bundled fee. I use OTT services myself sometimes, and it’s kind of a pain to have to pay for them separately. It takes time and I’d rather not have to do it.  Plus, you don’t really get a sense of how much you are spending on communication services overall. I’d rather pay a single, consolidated bill.

Secondly, the service providers know how to interoperate with each other pretty well. A contemporary case in point is video calling, which is very hard to interoperate. You can make a video Skype call to another Skype user but what about outside the Skype network? It also costs money if it’s a three-way call – I know as I tried to make a three-way video conference call with my two daughters who are both away at college.

Service providers also know how to service businesses. This is important since it’s a “brand” promise of providing better reliability and security than an OTT player. Note that this will go away with time. Some companies I know are already moving to Gmail as their main email service and as time goes on, Google will become increasingly accepted as a business communications service provider. However, a local service provider will probably continue to provide better local services than an OTT player that provides one broad global service. 

The service providers also need to offer new services that people will be willing to pay for. This could come in at least three forms. First of all, it could actually come in new services! Right now, all the new innovations are coming from start-ups. What’s to say that the service provider can’t offer an innovative service internally? Or buy some small start-up to offer the service? Or, create a unique twist on an existing service to provide value-added service to their customers?

Next week we will examine more closely a unique twist to a value-added service in the form of video conferencing.

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