Some believe the way forward for mobile service providers in the next era is to embrace and own over the top apps and services. There is little doubt that there is risk.

The logic is simple enough: in the future most apps will be used by consumers in an “over the top” manner. It also is not surprising that at least some providers of over the top, particularly those with a “partner” business strategy, make that argument.

But “over the top” parallels existing industry practices in crucial respects. First, assume that it is the carrier which “owns” the application. In principle, that is no different than a carrier owning voice, video entertainment or messaging services. Quite often, carriers are resistant to OTT apps in large part because they are not “carrier owned,” an therefore generate no revenue.

But there are some strategic issues. If you look at the mobile industry as having been through three distinct waves of revenue leadership, it was voice, then messaging, then data access.

Advertisement

But it already is clear that, at some point, the era of revenue driven by data access is going to end, as well. That leaves open what the next era will feature as a lead revenue driver. At least some of the apps could be based on partnerships with over the top application providers. But profit margin is likely to be an issue, if that happens.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!