Has the OTT threat to telco operators been exaggerated?

What if the over the top (OTT) threat to operator revenue is overstated? What if operators have all the tools they need to transition easily as the dominant players in telco 2.0?

What if?

It seems to be the accepted wisdom that OTT services will dramatically cut into operator revenues not just in the long-run but in the short-term. Think of the effect that WhatsApp had in the Netherlands.

But perhaps this is just an example of disruption in a changing marketplace, one that still favors the operator. We have examined it here before. All but the biggest OTT players face uncertain funding and an unproven revenue model. And despite all the SMS over OTT buzz – including WhatsApp – there is no real answer for the universal interoperability of the simple SMS.

Sure, revenues for voice and texts are going to fall as some minutes and texts go over the top. But bundled with access and bucket plans, voice and SMS can still be an important piece of the revenue puzzle for an operator.

This would all be especially true if operators stop focusing on price as the sole competitive differentiation and start working together to build interoperable services for the next generation. This is an historic strength of the telecom industry and one that should be built on.

There has been a start to this with both the growing adoption of HD voice – which could offset OTT strengths in innovative services – and with the formation of the “Euro-5” group of operators, which announced cooperation on launching Rich Communication Suite (RCS) in February and restated their commitment in November.

This is good sign, regardless of the technology or service.

And maybe if this happens, operators can get as comfortable as Telefónica or France Telecom in playing the OTT game themselves and using OTT to build the brand, not destroy it.

What if?