Along with another 250 attendees from across the digital services ecosystem, I recently attended the Digital Services World Congress, organized by Informa Telecoms & Media in London. The show was split between three topics – Mobile wallet, M2M and the Internet of Things, and Global Messaging. Gemalto’s aim was to present the CloudnShare app to mobile network operators, as well as to get insights about the market.
To me, it seems the Telco business is splitting between two strategies: Bundling vs. Billing. On one hand, European MNOs are looking for a way to integrate OTT players by partnering with them or developing their own OTT offer to their customers. On the other hand, in North America and Asia, MNOs are boosting the data offers, pushing their customers to subscribe to bigger and faster data plans. The Disruptive Analysis blog outlined this in a report last year, stating:
“Traditional telephony and SMS revenues are under threat from newer, Internet-based alternatives such as Skype and WhatsApp. At the same time, third-party web content and social networking companies such as YouTube and Facebook are making a huge amount of money – and driving high levels of data traffic – over the operators’ fixed and mobile broadband networks.”
Following the Digital Services World Congress, I’ve outlined my own analysis below:
Europe: bundle to become more than a ‘pipe’
Most of the European speakers at the congress were either MNOs or OTT providers. They are both confronting a change in the market. On one hand, MNOs are losing attention from their customers who tend to use OTT solutions instead of voice & SMS. Also, they feel like they are reduced to a ‘pipe’ for OTTs thanks to their strong network coverage and efficient broadband (4G). On the other hand, OTTs are offering customers cheap ways to communicate data, using lower revenue business models compared to MNOs.
MNOs are looking for opportunities to:
– Reinforce their current assets over OTTs: customer services and network coverage (4G)
– Be more than a ‘pipe’ for OTTs who develop ways to communicate cheaply through data connection without using voice & SMS
– Create their own OTT services or partner with OTT providers to generate new revenues and satisfy their customers
– Find new ways to generate revenues from SMS and protect it against misusage (spam)
CISMEA – North America, Asia: Push for billing, selling data plans
The focus in other parts of the world is to lead customers towards data plans using partnerships with OTT players. As data plans in NorAm are more expensive than in Europe, MNOs here don’t fear losing such high levels of revenue due to the decreased use of SMS.
In this environment, Gemalto’s CloudnShare service provides an instant, secure answer to MNOs need for an OTT-like service, as it is a solution that provides both cloud storage and integrated social functionality by using a mobile number as an ID.