Why Re-Invent the Wheel?!

OTTIn my previous blog regarding OTT applications & revenue, a lot of peers have messaged me agreeing, commenting, or offering their services. I read all the comments (most preferred not being published) and several were from vendors regarding MNO’s developing their own OTT applications (through their companies). This has always been a tricky dilemma for me: “Why re-invent the wheel!”

Several MNO’s are developing their own OTT applications (VoIP, IM, multimedia chat, etc) in a move that they believe is best for them.  Although it might be from their own point of view, I believe it is not for different reasons. Before we discuss why this is not the way, let us consider why these MNO’s believe it is the way:

  • Control over the traffic
  • Control over the customers
  • Ownership of customer & traffic
  • Termination of calls over VoIP
  • Revenue generation
  • Innovation & technology advancement (they can build on it)

With all the above and maybe several other specific reasons, these MNO’s are spending millions to develop and implement applications similar to whatsapp, tango, skype, viber, chaton, …etc. The applications are proprietary for the MNO’s and are customized to be used only on their networks. Such applications are believed to be the right way to move forward & build on by these MNO’s. I believe it is not the right way!

Instead of spending millions, dedicate resources, waste months, and re-invent the wheel, MNO’s can go down a different path for the below reasons:

  • Application providers & handset vendors have already spent a lot of money, time, & resources developing and advancing such applications (OTT Apps).
  • These applications are either OS, handset, technology based. None is network based.
  • These applications work on both mobile & internet (wifi, broadband, ADSL, etc) connections
  • Mobile network technology will come with new applications that will make OTT applications obsolete or will develop them even more in the future.
  • Handset built-in applications such as i-message & chaton will develop as handsets develop and will work on all networks.
  • MNO applications are restricted to the MNO’s users and this is a barrier for penetration & adoption for such applications.

The path I am talking about that MNO’s should be going in order not to waste time & money on developing these apps include the following steps:

  • MNO’s can adopt these OTT applications and even with some applications be resellers for such applications.
  • MNO’s can sell access rights to subscribers for these applications (some already are doing so): open port for subscribers to use OTT’s for small fee.
  • MNO can use OTT to generate money: viber out
  • MNO’s are benefiting of OTT’s through data packages (increasing every year)
  • Subscribers have their way of bypassing proprietary applications that MNO’s might force them to use.

With all what is mentioned above, I guess MNO’s should not try to re-invent the wheel. They should use what is available out there!

One thought on “Why Re-Invent the Wheel?!

  1. Steven

    Hi Sameer,
    Interesting perspective.
    I believe MNOs are rightly worried about “intermediation” by third party OTT applications, such as WhatsApp, Viber and Skype. First-hand relationships with customers are key to valuation, as demonstrated by Facebook’s $19bn acquisition of WhatsApp. The don’t want to become data pipes, which is a race to the bottom, and they don’t want to yield all applications to other vendors. Who knows what other opportunities they will lose later if they turn into dumb-pipes now. Nobody wants to be a pure utility.

    S

    Reply

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