Telstra leading the global telco move towards the OTT model
It is interesting to see what has happened since Telstra took the decision to embrace structural separation, and to close down the PSTN (Public Switched Telephone Network) in order to move to an NGN (Next-Generation Network) environment.
This heralds fundamental changes to the way telecoms infrastructure operates – something that so far is not well understood by many operators around the world, simply because of their monopolistic way of thinking. Because of the Australian government’s decision to establish a nationwide utilities-based wholesale-only NGN infrastructure the telcos inAustraliaare no longer constrained by business models based on the delivery of the infrastructure.
Following its fundamental change of direction Telstra swiftly announced investments in cloud computing and it has now launched its first OTT (Over-the-Top) model – using Facebook to let customers prepay their mobile subscriptions. It is the first telco in the world to do this. It is, in fact, using Facebook as a service provider (telco), which is, of course, an enormous variation on its traditional business model. It faced up to the reality that it could not catch up with the OTT players and is now joining them – very smart indeed.
It also recognised that, like it or not, a massive displacement is taking place, from old voice and messaging services to OTT-based models.
The unshackling of the old model gives Telstra the chance to start exploring totally new business models based on OTT. Nobody knows where this will lead, but it most certainly is one of the key avenues towards the new telco future.
Embracing the OTT model also opens the way for telcos to start offering certain services internationally; with the OTT model the world becomes their marketplace. Many of the OTT services already have an international character and there will obviously be fewer players who will be able to take on a significant role in the global market. It is not too late for telcos to move in this direction, but if the 30 years of telco history – stopping innovation and competition in order to protect their monopoly – is any indication, the majority will fail to take up this opportunity.
With more mobile operators providing these OTT prepaid services around the globe (something Apple is going to facilitate in its next iPhone), enabling people to use prepaid services within an international competitive model – just imagine what this is going to do to the business model of mobile operators!
Once telcos start to understand the business opportunities in the OTT model it will also become much clearer to them how important the quality of the network is in the delivery of those OTT services. And this could create a better business model for them to start looking far more seriously at FttH upgrades, perhaps together with other OTT suppliers.
Look at Google, which is building an FttH network inKansas City. It most certainly understands the need for an FttH network to secure its future.
Telstra and Google are two of the small number of leading companies that are pointing to the new telco future. They are setting an example for others around the world.
Paul Budde
We invite your comments: Please click here to comment
Tagged in: Australia, Cloud computing, Cloud telephony, Global, Mobile, Mobile Broadband, Mobile Data, National Broadband Network, NBN, OTT
