The Zimbabwean telecommunication industry’s revenues which is backed by money accrued from voice calls has been on the decline with these network operators laying the blame on the influx of Over The Top Services or Over The Top Communications (OTT) in the country.
We often hear in the local media that mobile network operators are crying foul over the emergence of OTTS saying they affect revenue flows. What are OTTs? Read On.
What is OTT?
These are services that bypass traditional network distribution approaches and run over, or on top of, core Internet networks. Facebook, WhatsApp, Twitter, YouTube, Netflix, Skype to mention but these few for instance, do not own the communications infrastructure that delivers their Instant Messaging,VoIP and video services—they operate over the top of telecom carriers such as Econet Wireless Zimbabwe, Telecel Zimbabwe and NetOne.
To better understand the concept here is an example, Most Zimbabwean mobile subscribers have 3G plans with a view having 4G on their smartphones and with which you have GSM calls and SMS service.Then, you use WhatsApp to send and share videos, audios, images and documents as well as using the 3G network. WhatsApp here is referred to as the OTT service.
The OTT Revolution
The new OTT apps, with free or lower-cost models, are forcing the well-established telcos to respond. Whether that response is more aggressive pricing, or pushing the greater reliability, security, performance (backed by quality of service and sometimes SLAs), and feature sets of incumbent offerings.
Overcoming the Downside of OTT
OTT has offered tremendous innovation, but not all is perfect. Because OTT app makers don’t have full control over the networks they run on top of, quality can suffer. Poor voice quality for VoIP, jittery or lagging video, and glitchy network strengths.
Simpler apps such as text and IM have fewer performance complaints since the data transferred is so small. In demanding corporate settings, unreliable performance isn’t always acceptable and more robust communications solutions are sought and procured.
The local telecom industry has had to deal with a continuously changing business and technology environment more than most other industries over the past half century.
The International Telecommunications Union (ITU) noted with concern the rise of OTTs. With the advent of this new player on the telco market, local MNOs which are widely affected by this phenomenon have been forced to re-think their business models to adapt to a new digital era. While they are adapting these questions arise:
- Will they focus on their core connectivity business?
- On providing digital services?
- On finding new revenue streams?
- Will they have the Resources to Invest in all these segments?
In Zimbabwe, MNOs have been grappling with the incursion of these OTTs saying they affect their revenue flow While MNOs have been known to get their income from voice calls, they have come up with alternatives streams to get their income.They fortunately have managed to attend to the above questions.
Local mobile carriers introduced daily, weekly and monthly social media bundles and broadband data bundles.
NetOne has WhatsApp, Facebook and Twitter bundles. The state controlled MNO also introduced the One Fusion which combines Facebook, Twitter and WhatsApp data coupled with capped broadband data, calls and SMSes.
Econet has its Social media bundles which offers capped OTTs bundles. It has the WhatsApp, Facebook ‘Light’ and ‘Extra’ bundles where monthly ‘Light’ bundles cost $3 with the ‘Extra’ costing twice as much..
Telecel Zimbabwe also has its monthly OTT bundles which are charged $2, 85.