Coopetition: The New World Order of Communications Services

Lastly, voice is the arena in which OTT offerings have arguably made the biggest impact. While there are several players, there is no understating the significance of Skype--it is quite simply the world's largest international voice carrier. Besides all manner of smart phones, tablets, laptops, and desktops, Skype can be used on a wide variety of WiFi enabled and mobile devices, from a Windows Phone, to the XBOX, to internet-enabled televisions. Skype brought video calling from the periphery to the mainstream, and commands a user base of more than half a billion subscribers. 

Messaging

Text messaging has given way to social messaging ... or has it? Ovum Research recently estimated that global CSPs lost more than $13 billion in service revenues due to social messaging alone. But when I spoke with Aram Krol, director of messaging product marketing, Acision, at Mobile World Congress this year, he disputed these numbers. He's in a good position to know; Acision processes 45 percent of the world's text messages. In terms of the messaging market, “for carriers, it's still growing; volumes are growing, revenues are growing,” Krol said. Plus, think about the user base: 5.7 billion people use text messaging. It's a massive ecosystem, and can be leveraged in innovative ways as part of new service experiences. As a universally deployed service, text messaging can immediately be used for coupons, transactions, healthcare, and other unique services that, say, Facebook messaging simply cannot. Messaging isn't going away, or being replaced by OTT and social media, it's simply evolving.

Coopetition in Action

Coopetition represents a shift in strategy; it's about creating and monetizing bundled content ecosystems mined from multiple service communities. Trying to compete directly with OTT players has been the wrong approach, historically speaking. “Leading operators and leading OTT are actively in discussions at the moment. It's not a matter of one or the other, but more of a question of integrating those communities...[this way] operators can ensure their continued relevance, even if they don't control everything that goes on,” Terry McCabe, CTO, Mavenir Systems said. McCabe added he's encouraged by the changes he's seen in the past six months, as the industry has moved from a purely competitive stance to a renewed focus on addressability and interconnect; defining traits of telecommunications.

Not only does it make more sense to find new ways of combining existing service communities versus building new ones, consumer behavior reflects an openness to this new shift. Take video, for example. "Video is increasingly being watched on different platforms and in different places, yet these emerging video services still generally act as complements to traditional television viewing and services rather than as substitutes," said Leichtman.

So while Comcast is going over the top by offering free text messaging to Xfinity customers, it also partnered with Verizon at the tail end of 2011 to sell Verizon wireless products in four markets. Comcast has also recently made its Xfinity On-Demand content available to TiVo Premiere and XBOX subscribers last month.

If we look at video calling, the technology has existed for a long time, but video calling didn't reach a critical mass until Skype, and arguably FaceTime, hit the scene. Now there's a real “potential of video calling as a mass market service,” Terry McCabe explained. “What better way to introduce people to video calling than tap into video-calling-aware subscribers?”

Verizon was the first major carrier in the states to create an alliance with Skype, and others soon followed. Even Apple, the notorious proponent of a walled-garden approach, opened its iOS to a Skype app. The installed user base of Skype is simply too massive to ignore. Instead of trying to fight the inevitable, carriers are looking at ways to leverage such existing communities, identify potential use models that exist within those communities, and bring those communities to mobile devices. In this way, it seems the fight to capture the lion's share of services has shifted to partnerships to reach broader audiences.