One of the more volatile issues facing the mobile sector is its relationship with OTT content providers. But while some cellco CEOs may bluster over OTT apps cannibalizing core voice and SMS revenues, our survey indicates that the majority operators in APAC - especially standalone cellcos - would just as soon partner with third-party OTT content players and let them do most of the heavy lifting in terms of content development.
For example, 44% of cellcos said they would invest in minimal content of their own and leave the rest to third-party partners. “This makes complete sense for smaller mobile-only operators that don’t have the traditional content from a fixed broadband offering to leverage,” says McCormick.
Less than 17% want that balance of investment to be more 50/50. Only one in ten would rather go it alone.
By contrast, half of integrated operators want to maintain a rough 50/50 balance between their own content and third-party content. But 27% would rather rely more on third parties, and 20% would just as soon leave it to third parties entirely.
McCormick says that the 50/50 division has some merit in certain large markets, such as Japan, China and Korea, which are also non-English markets. “But by and large, these markets will be the exceptions.”
We also asked what types of content cellcos and integrated operators expect to make the most money from via OTT partnerships. The most common response across the board: TV/video, with social media a respectable second.
Where the money is
As operators obsess over ARPUs and OTT cannibalization, they’re also planning to use LTE to develop new sources of incremental revenue. We asked them to name their main source for new incremental revenue over the next five years.
The short answer: wherever they can get it.
Our survey recorded a fairly even spread across numerous categories, with the biggest single category “consumer cloud video.” But the Internet of Things in aggregate could play a bigger role in incremental revenue, particularly in areas like healthcare, energy/utilities, retail/wholesale and government , which combined accounted for almost 45% of responses from cellcos.
Mobile finance made a blip on the radar at 11%, but more cellcos (17%) see advertising as a more likely possibility.