Successful apps could be big-opportunity signals for telcos too

Over-the-top providers may have scratched the surface of what telcos could find out to be a gold mine worth tapping into

It has become almost a telecom cliché to say that the future is all about data, as voice is already commoditised. At the same time, the fact remains that growth in data revenues has been hard to come by, even if the traffic has grown multifold.
 
Let’s face it—it amounts to saying that data too is commoditised to a significant extent.
 
In fact, 3G is becoming a double-edged sword for telcos in India. While it is a vehicle that promises to grow the mobile broadband subscribers for telcos, it is also a platform that invites and allows over-the-top (OTT) players to bypass telcos’ networks for gains where it hurts telcos the most—on the communication turf.

 

Historically, voice and messaging have formed the bread-and-butter for telcos, and would remain so even for the next few years to come. At least, that is the way telcos would like it to be.
 
However, there could be a worry that a spurt in the number of OTT messaging apps like WhatsApp and WeChat and their uptake by users would be eating into the SMS revenues of telecom service providers. Similarly, apps like Skype would have the potential to eat into telcos’ voice revenues.
 
The good thing, however, is that telcos are not really panicking. In fact, on the contrary, they are tying up with OTT providers to make their offerings more differentiated than the competition. For example, Vodafone has tied up with Twitter to provide users a three-month access to the microblogging site at zero data charges.

 
Similarly, just over a month ago, Airtel had announced its ‘Free Zone’ service that gave its mobile users access to mobile web search, along with certain other services, in a partnership with Google.
 
If these partnerships are indicative of the shape of future communication services, a new order is set to emerge—one where telecom and Internet platforms converge into new bundled service offerings and where the two sets of providers compete as well as cooperate at the same time.
 
In fact, apps like voice messaging could give telcos the potential opportunity to bring even those users into the messaging fold who could not be benefitted by even the good old SMS. (While a large number of users are not literate, many others are either not text- and tech-savvy or simply not inclined to texting.)

 
So could the apparent threat from OTT providers could actually point at some latent user needs that telcos may benefit from addressing?
 
Quite likely. But then to draw the benefits, telcos will need to expand their 3G footprints to discover newer data needs and opportunities across hitherto unexplored customer segments. Of course, the device ecosystem will need to develop further for telcos to be able to reap the advantages, but then isn’t that a two-way process too!
 
A deeper coverage of 3G, especially a comprehensive one of the semi-urban and rural areas in a given telecom circle, could be a step worth exploring, even better if in partnerships with a select set of OTT players. Of course, building a hypothesis on any latent OTT service needs of users could be a prerequisite and so would be the steps to validate such a hypothesis.

 
There is not much to doubt that the insights could be revealing and the results could be even more rewarding. After all, Facebook is actually working with the hypothesis that the mobile platforms are going to give it the next billion users and that these users would increasingly be coming from emerging markets like India.
 
Now think of Facebook as not just the largest social networking company but also as a big OTT player gunning for the mobile platform and the mobile broadband opportunity would start looking much bigger than it does at present.
 
Deepak Kumar is Founder Analyst at BusinessandMarket.net and specialises in market research and strategic advisory