Monetizing OTT services

21 Jan 2011

Sponsored article

Operators need to find ways to monetize Over-the-Top (OTT) services, and in so doing, create a whole new market landscape

With the number of mobile users soaring worldwide, mobile operators find themselves in a powerful position in the market. But they also face huge challenges. The emergence of OTT services and the proliferation of providers that offer them have caused data traffic to skyrocket, bringing networks to their knees and upsetting subscribers. And while mobile operators have much more traffic to handle, their revenues have not increased. Who owns the customer under such changing landscape? And how can operators prevent customer churn?

Operators need to find ways to monetize OTT services, but simply raising subscriber fees is not the answer. They need to do something more, they need to prevent the risk of becoming a connectivity provider only and instead become a personalized experience provider. And to do so, the providers have a unique asset that the others in the value chain do not have: customer knowledge. Because the providers see all of a customer’s activity, the providers could leverage that asset to offer more targeted services and promotions both directly (to their own customers) and indirectly (to partner with and compete with OTT).

By managing this asset properly, operators will be in a better position to transform their customers’ insight for tangible business outcomes

Game on

Operators can use this resource to create a new market landscape with an integrated, modular approach to build, analyze and act upon real-time customer profiles to improve their revenues, margins, customer loyalty and competitiveness.

Moreover, by introducing tiered or personalized pricing, operators can strategically monetize OTT services and give customers the services they want, and through partnerships and alignments with OTT vendors, can enrich OTT offerings to the benefit of subscribers. By creating their own application ecosystems, operators can compete directly with OTT vendors. And as the competition heats up, subscriber pay-to-play, fair-access, fair-use, and net-neutrality models will create further possibilities.

Tiered pricing makes it possible to leverage the economics of the moment

Tiered pricing gives operators the flexibility to customize plans and rates for different market and subscribers with packaged service plans based on classes of services and service options.

Ingredients of a tiered-pricing plan can include network type, network state, service usage (time, volume, events), speed, QoS, device type, time windows (weekends, weekdays), location, subscriber information, application type or any combination of these.

Operators can also partner with OTT vendors and agree to augment their services by providing anonymized subscriber profile data to enrich OTT offerings or send promotions on an OTT provider’s behalf to the end users on a revenue-share or per-transaction basis. Lastly, operators can compete by pioneering customer offers such as parental controls, location-based services like family locator and geo-fence, time or application-based bandwidth boosts, rate plan advisors, and personalized family plans to name a but a few.

To sum up, customers do not purchase functionality but unique services that are of obvious value to them. Mobile operators have the tools and data at hand to customize offers deliver value to each customer. Putting these two factors together adds up to a whole new set up opportunities for the operator.

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