December 5, 2020

Cellular Operators Have A Love And Hate Relationship With OTT Providers

The relationship between cellular operators and Over-The-Top (OTT) is unique. When the use of internet data is not as much as currently, the existence of OTT companies with their services is a blessing for operators to increase data traffic as well as educate customers about the new services. OTT services, such as ott advertising services are quite successful in increasing smartphone penetration as the main asset for customers to enjoy data services. However, as access to data services increases, the financial benefits in this relatively new field are enjoyed by OTT companies. So the relationship between OTT and cellular service providers can be said as “love and hate”.

The relationship between service providers and content providers has recently become less harmonious. This is because content provider companies, which are mostly Over-The-Top (OTT) companies, gain greater profits than cellular operators as telecommunications network providers. According to Wikipedia, OTT is a service with content in the form of data, information, or multimedia that runs through the internet network.

Today online commerce, advertising, and digital media content are growing very rapidly and have created a new digital industry. This new industry runs on an infrastructure network built by cellular operators. However, cellular operators cannot take full advantage of this new industrial development. It is Over the Top (OTT) companies that have taken most of the benefits of the rapid growth of the digital telecommunications business. Service providers consider OTT companies to make large sums of money through their digital advertising and multimedia content businesses, whereas service providers with telecommunications infrastructure cannot make money on internet data traffic on their networks.

Youtube, skype, Facebook, WhatsApp, Spotify, Viber, and Netflix are examples of several Over-The-Top (OTT) providers whose operations are considered to be detrimental or threatening to telecommunication operators in the world. The fact is like YouTube currently controls about 24% of world internet traffic. Whatsapp together with Facebook and Google + controls most of the messaging system traffic in the world. Netflix already has 30 million subscribers who stream HD and 4K content.

The business of OTT companies is growing rapidly and has begun to enter the business sector, which has been the main source of revenue for cellular operators.