Ovum: Asian mobile services will need telco – OTT collaboration to grow

At the Mobile World Congress Asia edition in Shanghai in July, Chairman of China Mobile, Xi Guohua, took a bold stand by stating that in order to capture the next wave of the mobile Internet, mobile operators and OTT players must work together.

The view that partnering with OTT players will further the range of digital services and their uptake amongst the consumers was supported by NTT DoCoMo president, Kaoru Kato, as well. This is especially relevant for the Asian market, as it is fast becoming a mobile centric region for content consumption. Asia not only represents a high mobile first market but a large proportion of handsets are manufactured in Asia as well. Meanwhile, Telstra suggested that the dependence on mobile has never been higher in Asia, and to meet growing consumer demand will require collaboration between telcos, regulators, the government and, the wider industry as well.

“Consumer services are increasingly migrating to mobile and this is seeing strong growth particularly in the Asia Pacific region,” says Neha Dharia, Senior Analyst, at Ovum. “ In Ovum’s OTT – Telco partnership Tracker, 31% of all partnerships globally come from Asia Pacific region, with the highest concentration being in the social media category.”

Supporting this, China Mobile is seeing strong growth in the market from Internet- based services, while the growth from mobile voice has been decreasing by 10-15% YoY. As mobile voice declines, it reinforces the need to drive the second mobile growth curve which is centered on data traffic. However, this is a twofold process. On one hand, it requires a solid foundation infrastructure and connectivity, such as 4G. Second, operators must develop or partner on popular customer centric services such as those provided by OTT services.

“Digital services are molding a new economy, and in order for telcos to have a strong foot in this new mobile-based economy they must not think of OTT players as competitors but as collaborators,” Dharia states.

She believes that operators, particularly in Asia, must keep digital services in mind when building their long term strategy. “Not only is it important to work toward 5G connectivity, but it is also important to introduce services such as RCS or work with OTT players to create services for the customer.”

Dharia continued: “As digital services become mainstream, they are connecting the offline and online and creating a range of monetization opportunities that were historically not in the telco domain, such as m-commerce, payments, health, fitness and security. There is the need for greater cross-sector collaboration to build the digital economy.”