Abstract submitted to                      ITS 19th Biennial Conference, Bangkok 2012                                     ...
Methodologies    This work is part of on going research “Business model for mobile broadband mediaservices”. Here, we focu...
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Abstract - Competing or Aligning? Assessment for Telecom Operator's strategy to address OTT TV/Video services

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Up until recently, it was rarely direct competition between telecom operators, cable and satellite Pay-TV providers in digital TV/Video, as their business area were different and value chain was well established. However, technology advance has altered digital TV/Video landscape, made these Communication Service Providers (CSPs) cross other’s area and opened door for new actor (OTT player) to enter the market. This triggers second change in the landscape, as it potentially bypasses CSP’s role in digital media value chain.

There are generic potential options for telecom operator to address OTT service‘s treat, where the trend shows gradual shifts toward allowing or promoting. This study assesses telecom operator’s reaction strategies to react to this digital TV/Video convergence trend. Our analysis reveals two typical relation patterns in the value network, used by telecom operators based on strategy options above, which are ”point-to-point” and ”point-to-multipoint” relation model. We explore the underlining motivations that based these strategies, as well as analysis of the eco-systems: actors identification, business roles and distributed responsibilities among them, where we use ARA (Actors, Resource, Activities) point of view to model these value networks.

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Abstract - Competing or Aligning? Assessment for Telecom Operator's strategy to address OTT TV/Video services

  1. 1. Abstract submitted to ITS 19th Biennial Conference, Bangkok 2012 Title Competing or Aligning? Analysis of Telecom Operators strategy to address OTT TV/Video services Authors Laili Aidi School of ICT KTH Electrum 229, S-16440 Sweden aidi@kth.se Jan Markendahl, Konrad Tollmar Wireless@KTH, KTH Electrum 229, S-16440 Sweden {janmar, konrad}@kth.se Greger Blennerud Ericsson Torshamnsgatan 48, S-16440 Sweden greger.blennerud@ericsson.comIntroduction and Research questions Up until recently, it was rarely direct competition between Telecom operators, Cableand Satellite Pay-TV providers, as its business area were different and value chain waswell established. However, technology advance has altered digital TV/Video landscape,made these Communication Service Providers (CSPs) cross other’s area and opened doorfor new actor (OTT player) to enter market [1]. This triggers second change, as itpotentially bypasses CSP’s role in media services value chain. The content owner hasmore choices to monetize copyright works and customer has wide freedom onconsumption way. However, digital TV/Video business model using online distribution channel isactually still unclear and actors are testing variety strategies. According [2], there ispotential positioning for Telecom operator to address OTT service‘s treat, where thetrend shows gradual shift toward allowing or promoting. The “allowing” strategy is doneby competing with OTT player, while the other by aligning. Seeing those, 2 researchquestions are explored:1. What are technical and business motivations that underline this competing or aligningstrategy?2. What kind of interaction and relationship models between actors in telecom andInternet industry?
  2. 2. Methodologies This work is part of on going research “Business model for mobile broadband mediaservices”. Here, we focus to the analysis of how OTT TV/Video impacts telecomindustry and how industry reacts. We use [3] to mediate technology and economic valuesanalysis, and assess different relation models in value chain to answer second question.We observe that there are inter-relations between actors that create different valuecreations in ecosystem [4]. We use ARA (Actors, Resource, Activities) [5] to analyzethese relations.Expected results The case markets are west European and North America, where mobile-broadbandmedia services are currently taking off. The initial results show us different relationmodels used by Telecom operators with Internet player, as reaction on convergence trendbetween telecom and broadcasting industry. The discussion covers eco-systems analysis:actors identification, business roles and distributed responsibilities, also drivers andchallenges of their strategies.References[1] Technology Convergence and Regulatory Challenge: A Case from Korean Digital Media Broadcasting http://userpage.fu- berlin.de/~jmueller/its/conf/porto05/papers/Shin1.pdf[2] “Operator strategic choices in the ott reality". Ericsson, August 2011[3] H. Chesbrough and R.S. Rosenbloom. (2002). The role of business model in capturing value from innovations: Evidence from Xerox Corporation’s technology spin-off companies. Industrial and Corporate Change [Online]. 11(3), pp. 529-555. Available: http://icc.oxfordjournals.org/content/11/3/529[4] J. Peppard, A. Rylander, 2006, "From Value Chain to Value Network: Insights for Mobile Operators", in European Management Journal, Volume 24, Issues 2-3, 2006, Pp 128-141.[5] J. Markendahl, “Mobile Network Operators and Cooperation - A Tele-economic study of infrastructure sharing and mobile payments services,” Ph.D. dissertation, CoS, KTH, Stockholm, 2007.

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