Telcos Now See OTT Players as Opportunity, not Threat

PALO ALTO, CA - Marketers in the $1.3 trillion global telecommunications industry are being both challenged and enabled by free over-the-top (OTT) communications service providers, such as Google, Skype and Facebook. A new Chief Marketing Officer (CMO) Council study, “Profitability From Subscriber Acuity,” conducted in partnership with HP, shows that while these companies are supplying customers with sophisticated web-based features that are competing with fixed and mobile operators, OTT players are also being courted for partnerships and revenue-sharing opportunities by traditional communications services providers (CSPs).

Besides the legacy local and long-distance wire line phone services, the CSP sector also includes wireless communications, Internet services, fiber optics networks, cable TV networks and commercial satellite communications.

Converting Threat to Opportunity
Some 44 percent of telco marketers who participated in the CMO Council’s study during the second to fourth quarters of 2012 are actively exploring OTT partnerships and revenue-sharing opportunities. In addition, 31 percent are identifying potential revenue streams from new products or services that can be offered to OTT players, including subscriber analytics and behavioral insights. This represents a significant shift in the mindset of telco marketers. Just one year ago, a CMO Council study dubbed “Dexterity From Subscriber Complexity” reported that OTT represented a threat, not an opportunity. In that study, 88 percent of executives considered OTT innovators as competitors, and only 6 percent were actively forging partnerships.

“This shift tracks with marketing’s role of leading the charge for new market and revenue opportunities,” said Liz Miller, vice president of programs for the CMO Council. “What is clear from this study is that marketing has been tasked with owning the customer experience and driving bottom-line revenue improvements. Considering that research has put the potential revenue loss from OTT starting at $13.8 billion in 2011 alone, it is not surprising that telco marketers see OTT as an opportunity to exploit.”

Need for Greater Visibility into Customer Experience
While 222 CSP marketers participating in the study have oversight across the majority of customer touchpoints that most impact customer experience, they are still seeking deeper views into key front-line areas like customer support, in-store strategy and channel management. To facilitate the flow of information and processes across these areas, marketing is also taking a more active role in identifying key technology platforms and solutions as 38 percent of respondents serve as the key decision makers while an additional 38 percent serve as key influencers in the technology selection process.

But despite the significant commitment to advancing the customer experience, marketers are being stymied by a lack of visibility and insight into critical areas of intelligence and analytics. Only 5 percent of marketers have access to an automated solution that leverages data and intelligence to enable improved decisions or personalize individual engagements.