Helping mobile operators address revenue cannibalisation from OTT communication services

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This talk looks at the threat to mobile operator revenues from OTT communication services like WhatsApp and encourages mobile operators to not give up but to innovate and create services that their customers really want.

Includes meerkats and textfromdog.com.

Presented at the Future of Mobile in Cambridge June 2012.

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  • 2011 marked the first year since 1995 that consumer SMS volume droppedAs smartphone penetration rises, network effects are likely to accelerate take up of OTT servicesKPN and Telefonica reported drops in messaging revenue as a result of OTT servicesWhatsapp: 1b messages per day after 1 yearThe way in which we communicate with friends and colleagues is changing rapidly:Increased choiceIncreased flexibiity….but also …Increased fragmentationPoor user experience
  • Helping mobile operators address revenue cannibalisation from OTT communication services

    1. 1. Myriad GroupHelping operators address revenuecannibalisation from OTT communication servicesMark Watts-Jones @MWJDirector of Social Mobile +44 7073 963539June 2012
    2. 2. Myriad Group has over 100 operator and 25 OEMrelationships globallyDeveloped MarketsEmerging Markets2 @MWJ #fwic
    3. 3. Fact: Consumers communications needs areevolving leading to increased use of OTT services Consumers have greater choice for their communication services Smartphones increasing impacting operatorFROM: revenues Basic devices Voice and text only Operator services Data increasing3 @MWJ #fwic
    4. 4. Forecast: As OTT services gain a foothold operators core voice/text revenues are at risk OTT messaging starts to substitute SMS Lower SMS use = lower SMS1 Lower SMS revenue revenue Lower demand for SMS = Lower plan/tariff revenue as customers2 Lower plan/tariff revenue move to lower value plans Operators become „pipes‟ as OTT services become primary3 Lose customer relationship means of communications Future voice, messaging and Operators cannot monetise their VAS revenues at risk position as trusted, mass market consumer brands Ref: Ovum, 2012, Counteracting the social4 @MWJ #fwic messaging threat
    5. 5. Problem: As Bob Dylan said the times are achangin’ FROM TO Operator-centric Service centric Own the network Control the device “They‟re using our Own the Provide the network to do spectrum services whaaattttt?!!!” Own the Determine the brands price Universal, Compete with interconnected each other5 @MWJ #fwic
    6. 6. …but OTT services aren’t playing the same game as mobile operatorsUSER PERCEPTION: OPERATOR PERCEPTION: Cool, exciting Fast, dynamic Creative, new Challenging „Free‟ Close to end users Very viral Don‟t care about operators The users friend Performance or security issues tolerated Happy to pivot 6 @MWJ #fwic
    7. 7. Ok we hear you… …but what do we do?7 @MWJ #fwic
    8. 8. Well to start with operators have assets that OTT services can only dream of Millions of paying customers Cash Mass market consumer brands Customer relationships Ability to bundle Large (often IP) networks Cost advantage Skills, experience Distribution, support networks8 @MWJ #fwic
    9. 9. And plenty of possible strategies. For exampleoperators could do one or all of… PricingOperator assets Create extra consumer Focus on the network value Differentiate through Lower costs brand, marketing, distribution or support CustomersServices Do what customers want! Partner with OTT Get them before your services competitors do Create copycats Technology Target niches Innovate new services Open up, work in new ecosystems Use all of that big data Differentiate by QoS Support industry initiatives e.g. RCS9 @MWJ #fwic
    10. 10. Erm, ok, but you’ve still not told us what to do. Well…that depends on…10 @MWJ #fwic
    11. 11. …what the most important people in all of this want– the end users 11 @MWJ #fwic
    12. 12. Understand the needs of your customers. They’reall different and all special! They‟re in different life stages, with different experience, skills, expectations and willingness to do things 12 @MWJ #fwic
    13. 13. To illustrate this point …who here today…?13 @MWJ #fwic
    14. 14. Owns a Nokia?14 @MWJ #fwic
    15. 15. Has heard of Textfromdog.tumblr.com?15 @MWJ #fwic
    16. 16. Watched the OMG Cat?16 @MWJ #fwic www.youtube.com/watch?v=C_S5cXbXe-4
    17. 17. Wears a suit?17 @MWJ #fwic
    18. 18. Any idea what icanhascheezburger.com is?18 @MWJ #fwic
    19. 19. Actually used Instagram.com? No, really.19 @MWJ #fwic
    20. 20. Or Pinterest.com?20 @MWJ #fwic
    21. 21. The answer is the ‘Do something’ scenario • Know your customer – who they are and what they need - and relentlessly target them • Do something, anything • Identify niches and grow with them • Be confident! Try, fail, try again • Increase value to offset the perceived benefit of OTT services • Engage customers early before they become OTT users21 @MWJ #fwic
    22. 22. Which could be summarised as… Be quick Be creative Be committed Be great for the end user22 @MWJ #fwic
    23. 23. 23 29/06/2012 Confidential & Proprietary © Myriad Group AG 2012

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