Over-the-top players

The emergence of over-the-top service providers as a hugely important force in the communications industry changes the game for traditional network operators. There are many new opportunities up for grabs for those operators that can add value to the use of over-the-top services.

People are interested in services, not networks, and it’s the companies that provide services on top of existing networks that are driving much of the innovation that we see in today’s communications market. The popularity of the services that over-the-top (OTT) providers deliver is undeniable, and they are creating tremendous growth within the industry. Nevertheless, their increasing dominance presents new challenges for more traditional operators.
Unlike conventional operator businesses, where the services and infrastructure are linked and network operators control the value chain, OTT services are delivered without any affiliation with the network. OTT providers today wield immense power in the market and include household names in content (YouTube, Netflix), advertising (Google), communications (Skype and Facebook), commerce (Amazon and eBay) and device platforms (Apple, Microsoft).
There are huge rewards at stake. For example, Facebook has more than 500 million subscribers and already reaches more than half of the online population in many countries. Skype’s VoIP service increased its share of international call minutes from 8% to 13% between 2008 and 20091. Results like these mean that revenues for over-the-top service providers are predicted to grow by more than 40% between 2010 and 20152.