European operators missing out on €2.2bn OTT profit opportunity

  • Posted by NeonDrum News
  • September 24, 2014 3:22 PM BST
  • 992 views

Cambridge, UK, 24th September 2014 – Western European operators are potentially missing out on more than €2bn in gross profits according to independent research commissioned by AsiaInfo – China’s largest telecommunications software and services company.

Undertaken by respected mobile communications consultancy firm Northstream, the research highlights that an open platform approach to collaborating with the so-­called Over-­The-­Top (OTT) community could unlock significant revenues as well as slash related operational costs.

Northstream’s investigation concentrated on 60 operators across 16 Western European countries. The research identified that the current individual, essentially manual, approach to OTT collaboration normally undertaken on a case-­by-­case basis can be expected to generate a modest gross profit of around €160m over the next three years.

However, an approach based on deploying an open collaboration platform, providing OTT partners with direct but controlled access to the operator’s IT assets coupled with the possibility to leverage end-­user context, would not only substantially reduce operating costs per partnership, it would also enable operators to add more partners, deliver more value and increase revenues from each collaboration. The net result is an eye-­catching 15-­fold increase in gross profits to €2.2bn across the 16 countries.

Commenting on the research findings, AsiaInfo’s VP of product marketing Dr Andy Tiller said: “This is a huge wake-­up call. We know from earlier research that 90 per cent of operators recognise the need to partner with the OTT community, but many are still sceptical about the business case – particularly the costs involved and the revenue return. What this new research from Northstream shows is that deploying an open collaboration platform can unlock a net revenue stream that is far bigger and more profitable than many had imagined.”

Northstream’s research identified three key drivers to profitability: a collaboration platform enables operators to grow the numbers of partners, increase the variety of partnership scenarios, and boost subscriber take-­up of partner-­based offers.

“It is quite simple,” said Northstream’s CEO, Bengt Nordström. “Our modelling shows that the potential lies in the operators’ ability to achieve the economies of scale required and quickly add and manage partnerships across those three growth criteria. As long as a manual or case-­by-­case model is adopted costs remain high and growth remains limited.

“However, it is not just about the automation,” he added. “It is also about speed of introduction and the appeal of partner-based offers to end subscribers, as well as the commercial attractiveness of the partnership to the OTT community. Those operators that adopt an open platform approach will attract more partners and deliver faster returns and greater profits to both parties.”

The potential shown through the study suggests the need for a mind set adjustment from operators, away from purely marketing relationships towards innovative direct revenue-­generating partnerships enabled by open collaboration platforms.

Ends

Note to editors:
A whitepaper outlining the research findings in detail is available at www.asiainfo.com/OTT
The white paper, infographic and all relevant background material can be found on the USB stick you have been provided with.

For further information or to arrange a detailed briefing, please contact:
Nicky Denovan: nicky.denovan@standingtallcomms.com, or
Kevin Taylor: kevin.taylor@standingtallcomms.com

About AsiaInfo, Inc.
AsiaInfo, Inc. is a leading provider of internet-­based systems and software to the telecommunications industry. Headquartered in Beijing, we employ more than 11,500 professionals worldwide.

AsiaInfo provides a full suite of business and operations support systems and professional services to solve the business challenges of the future. Through our innovative BSS/OSS, Big Data, and security software products, AsiaInfo is driving the transformation of the telecoms industry into the new Business Internet era.

Our core Veris™ product suite includes billing and customer care systems that serve nearly a billion subscribers globally, plus business intelligence, network management, network security, and OTT and cross-­vertical collaboration solutions. Veris is the cornerstone of our growing ecosystem to support the transformation to the Business Internet.

Our customers work with us to converge large­scale pre-­and post-­paid mobile operations; improve time to market for new products and services; and develop cost-­effective new business models. In China we have more than 50% market share in Billing, CRM and Business Intelligence through our longstanding partnerships with China Mobile, China Unicom and China Telecom. We have deployed our BSS solutions with leading operators throughout Asia, and our expansion into Europe has already resulted in a major contract with Telenor Group.

For more information about the research study, please visit: www.asiainfo.com/OTT

About Veris O²P:
The Veris™ Open Operational Platform (O²P) is a B2B collaboration environment which enables operators to boost revenues by converging their products with those of OTTs and other Digital Service Providers, and enables OTTs to benefit from the operator’s advanced back-­office IT capabilities.

About Northstream:
The independent research was executed by Northstream. For more details of the context and assumptions behind this research, please refer to the AsiaInfo white paper. Northstream is a management consulting firm providing strategic business and technology advice to businesses in the global telecommunications industry. They help clients through independent and objective analysis, advice, problem-­solving and support that are tailor-­made to clients’ unique situation, based on the right combination of innovation, industry best practices and Northstream methodologies.
 

Distributed on behalf of Standing Tall Communications by NeonDrum news distribution service (http://www.neondrum.com)

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