Measuring the impact of the OTT on the telecom operators Case Study: MENA operators

Abstract

The economy of the 21st century is digital and has great potential for growth and value creation. To keep up with the insane pace of data explosion, telecom operators (telcos) are investing heavily in their infrastructure, even though their revenues are falling and their margins are shrinking, while “Over The Top” (OTT) applications are booming. These content providers are imposing themselves as formidable predators in the internet ecosystem, jeopardizing the survival of the former masters of telephony. Even with their competitive advantage, telcos, the crucial access providers, are facing serious threats, regardless of their various strategies and Business Models (BM). We propose to understand their BM and modify it, to better resist the new challenges of this digital revolution.
While many studies point to the increasing impact of the “Over the Top” (OTT) players on telcos’ revenues and their continuous need to change their BM, few types of research focus on the relationship between the impact of OTTs and the telcos business models. In this research, we calculate the cost of data according to the BM of some telecom operators in the MENA region, which operate on different market structures. We will analyze their resistance to the tsunami of ‘data’, initiated by the OTT, and then propose, from a two-sided market perspective, some essential measures to lighten the weight of the data invasion. If revenue sharing and continual integration between telcos and content providers are not considered, both parties may lose.