By: Husam Yaghi
As technology continues to advance, the telecommunication industry has reached a crossroads. The rise of the OTT era has revolutionized the way traditional telecommunication services are used. It has redefined the way we communicate with one another by moving away from legacy circuit switch voice services to digital data over the internet. OTT has become the vehicle that drives the new way of communication. This shift has allowed for a multitude of apps and services to become available that essentially provide the same function as traditional voice services at a fraction of the cost. Whether it be through messaging apps, voice calling, or video chats, all these services are provided using IP networks by riding on top of existing internet connections to access a plethora of devices.
This goes to show the growing importance of mobile data as recent studies have shown the decline of revenues from traditional telecom services due to the cannibalization of messaging and voice apps. In comparison, global revenues from mobile data have increased over the last few years and are showing steady growth as the providers of OTT services expect to continue expanding as mobile data plans are becoming cheaper and more prevalent. OTT has even had a significant impact on mobile data traffic.
Mobile data will continue to experience annual growth; which could be attributed to the rise of various OTT apps and services. With a new age of communication shifting towards digital data, mobile data has become the foundation on which telecommunications is built upon. This has had a huge impact on traditional telecom companies and has forced them to rethink their current delivery of services in order to compete with OTT services.
The OTT Revolution:
OTT era stands for Over-The-Top era and is also known as the digital era. OTT can be defined as an activity, content, or any service, which is provided via the internet, and it can be consumed on any device and is not limited to the platform they are served on. These OTT services ride on top of the infrastructure provided by internet service providers, and it does not involve in the control or distribution of the service (content) that they provide. Netflix, YouTube, VOIP applications, Skype are some of the examples for OTT services.
Traditionally, a Telco’s main revenue stream was derived from voice and SMS services. However, with the advent of OTT services, a “sunset” period has been forced upon these traditional services.
Mobile data has become a crucial part of our lives, playing a role in various aspects of our daily activities. OTT services such as Netflix, WhatsApp, and Facebook are widely used by consumers in the telecommunications industry. Most of these services are using mobile as the primary connection to the internet. While the OTT players are raking in the revenue from their mobile data-using customers, the Telcos are not seeing the same amount of benefits.
Mobile data, previously viewed as a secondary service primarily for internet browsing and email access, has become the cornerstone of real-time communication. Users, particularly younger generations who have grown up with smartphones as an extension of themselves, prioritize OTT platforms for communication, social interaction, and entertainment. This reliance on OTT has fueled a surge in mobile data consumption, creating a new set of challenges and opportunities for MNOs.
The Future of Mobile Data:
As we peer into the future, the trajectory of mobile data is intricately linked to the continued growth of OTT services. Several key trends will shape how mobile data evolves:
- The 5G Revolution: The emergence of 5G, the next generation of mobile network technology, promises to revolutionize the mobile data landscape. With significantly faster data speeds and lower latency, 5G will further enhance the capabilities of OTT services, enabling features like high-definition video calls, real-time augmented reality experiences, and cloud gaming – all requiring significant amounts of data.
- Data Monetization beyond Plans: The traditional model of selling fixed data plans might become obsolete. MNOs might explore alternative monetization strategies, such as:
- Data Sponsorships: Web3, characterized by a decentralized internet or “semantic web,” facilitates seamless data integration across applications. This opens up new avenues for data sponsorships, where developers delegate tasks previously accomplished through consumer payment to sponsors offering free data in exchange. AI can play a crucial role in selecting appropriate data exchanges and advertisements, catering to specific customer demographics and enhancing user experiences.
- Partnering with Brands or Content Providers: Collaboration with brands or content providers enables MNOs to diversify their business and tap into targeted marketing services. Leveraging AI, MNOs can identify correlations between customer demographics and device usage patterns, creating unique customer segments for personalized services. AI-powered promotions, delivered through chatbots or digital assistants, offer less invasive and more engaging experiences, leading to increased Average Revenue Per User (ARPU).
- Personalized Data Packages: MNOs can use AI and Web3 to create customized data packages based on individual user profiles and data consumption patterns. This enhances the user experience by aligning data offerings with specific needs, such as video streaming or gaming. AI algorithms analyze data usage patterns and anticipate future needs, allowing MNOs to offer proactive data packages.
- Data-driven Advertising: MNOs can leverage user data while prioritizing privacy considerations to deliver targeted advertising within OTT applications and other mobile platforms. AI algorithms analyze user data to create profiles and categorize users into segments, enabling advertisers to deliver relevant advertisements. Strict privacy measures, compliance with regulations, and user consent are crucial for protecting individual privacy.
The Rise of Niche MVNOs:
Mobile Virtual Network Enablers (MVNOs) have an opportunity to capitalize on the growing demand for specialized mobile data services. They can target niche markets with innovative data-centric plans, such as:
- Travel-focused MVNOs: Travel-focused MVNOs can capitalize on the needs of frequent travelers by offering data packages with international roaming capabilities and partnerships with local Mobile Network Operators (MNOs). These MVNOs can provide seamless data connectivity to their customers while they are traveling internationally.
- Gamer-focused MVNOs: Gamer-focused MVNOs can cater to the specific needs of online gamers by providing data plans with low latency and optimized speeds for gaming. These MVNOs can partner with gaming platforms, content providers, or hardware manufacturers to offer specialized services and benefits to gamers.
- IoT-focused MVNOs: Offering data plans specifically designed for Internet of Things (IoT) devices, catering to the growing demand for reliable and secure data connectivity for smart homes, wearables, and industrial applications. These plans might include features like:
- Lower data allowances: Since IoT devices typically transmit smaller data packets compared to smartphones, IoT-focused plans could offer smaller data allowances at lower costs.
- Extended battery life optimization: Certain data plans might prioritize low power consumption to optimize battery life for resource-constrained IoT devices.
- Security features: Data plans could include built-in security features to safeguard data transmission between IoT devices and the cloud.
The Rise of AI in Mobile Communications
As mobile data consumption continues to rise, fueled by the popularity of OTT services, personalization will be key for both MNOs and OTT providers. OTT platforms already leverage Artificial Intelligence (AI) to personalize recommendations and content delivery. For instance, AI algorithms can analyze user behavior and preferences to suggest relevant contacts for calls, recommend interesting content within the OTT platform, or personalize message notifications. In the future, we might see AI used for:
- Real-time translation within calls: AI could enable seamless communication across language barriers by offering real-time translation during voice or video calls within OTT platforms.
- Personalized content summarization: AI could analyze lengthy video content and generate summaries tailored to individual user preferences, allowing for faster consumption of information within OTT platforms.
MNOs can also leverage AI to optimize their networks and enhance the user experience:
- Predicting and managing network congestion: AI algorithms can analyze data usage patterns to predict areas of high traffic and congestion. MNOs can then optimize network resources to prevent congestion and ensure a smooth mobile data experience for users.
- Targeted network upgrades: AI can analyze data usage patterns to identify areas with high data consumption and prioritize network upgrades in those locations, ensuring efficient resource allocation.
AI’s predictive analytics capabilities allow MNOs to segment markets effectively and deliver specific services to targeted subscriber groups. This customization requires flexible network infrastructures, which can be achieved through partnerships with other service providers. AI-based pattern analysis assists in automating decisions and adapting networks to meet evolving service requirements, ultimately improving customer value propositions.
A Collaborative Ecosystem for the Future
The future of mobile data is not a solitary path for MNOs or OTT providers. Collaboration and a symbiotic ecosystem are paramount for a thriving mobile communication landscape. Here’s what the future might hold:
- MNOs as Enablers: MNOs can position themselves as enablers of the OTT revolution. By providing robust and affordable data plans, investing in network infrastructure to handle increased data traffic, and fostering partnerships with OTT providers, they can ensure a seamless user experience for both OTT services and mobile data consumption.
- OTT Innovation: As mobile data capabilities evolve with 5G and beyond, OTT providers can offer even more innovative and immersive communication and entertainment experiences. This could include features like:
- Augmented reality (AR) and virtual reality (VR) integration: Leveraging 5G’s high speeds and low latency, OTT platforms could integrate AR and VR experiences within their services, creating new possibilities for communication, social interaction, and entertainment.
- Interactive content and experiences: AI-powered chatbots within OTT platforms could provide real-time customer support or participate in interactive experiences.
- User-Centric Approach: Ultimately, the success of the future mobile data landscape hinges on a user-centric approach. Both MNOs and OTT providers must prioritize user needs and satisfaction by offering:
- Flexible data plans: Catering to diverse data consumption patterns with a variety of plan options.
- Transparent pricing: Providing clear and understandable pricing structures to avoid hidden fees or surprise charges.
- Uncompromising data security: Implementing robust security measures to safeguard user privacy and prevent data breaches.
Conclusion
Mobile Network Operators (MNOs) have the opportunity to drive revenue growth by embracing new “OTT-centric” business and service delivery models. By gaining a deep understanding of how end users, enterprises, and vertical markets utilize OTT services, MNOs can create and deliver new services that align closely with the demand patterns of these customer segments.
The emergence of AI and Web3 technologies brings disruptions and necessitates strategic shifts for MNOs. Embracing AI empowers MNOs with automation, predictive analysis, and improved customer experiences. MNOs must prepare for a transition to a more interconnected business ecosystem, where collaboration and partnerships play a crucial role.
Despite the challenges, the adoption of virtualized networks and cloud-based systems offers MNOs flexibility and agility. Leveraging AI and Web3 technologies becomes imperative for MNOs to navigate this transformative period successfully. By doing so, they can capitalize on new revenue opportunities and adapt to the changing market environment.
In summary, MNOs can thrive by embracing OTT-centric models, understanding customer needs, and delivering innovative services. The integration of AI and Web3 technologies will enable MNOs to stay competitive, shape the future of mobile communication, and unlock new growth avenues in the dynamic market landscape.
Disclaimer: “This blog post was researched and written with the assistance of artificial intelligence tools.”