Myriad Group

Helping operators address revenue cannibalisation from OTT communication services

Mark Watts-Jones

Director of Social Mobile

June 2012

@MWJ+44 7073 963539

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Emerging Markets

Developed Markets

Myriad Group has over 100 operator and 25 OEM relationships globally

@MWJ #fwic

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Fact: Consumers communications needs are evolving leading to increased use of OTT services

FROM:

Basic devices

Voice and text only

Operator services

Smartphones increasing

Data increasing

Consumers have greater

choice for their communication

services impacting operator revenues

@MWJ #fwic

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Forecast: As OTT services gain a foothold operators core voice/text revenues are at risk

Lower SMS use = lower SMS revenue

Lower demand for SMS = Lower plan/tariff revenue as customers move to lower value plans

Operators become ‘pipes’ as OTT services become primary means of communications

Operators cannot monetise their position as trusted, mass market consumer brands

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2

3 Lose customer relationship

Lower SMS revenue

Lower plan/tariff revenue

Future voice, messaging and VAS revenues at risk

OTT messaging starts to substitute SMS

@MWJ #fwic Ref: Ovum, 2012, Counteracting the social messaging threat

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Problem: As Bob Dylan said the times are a changin’

“They’re using our network to do whaaattttt?!!!”

Own the network

Own the spectrum

Own the brands

Universal, interconnected

Control the device

Provide the services

Determine the price

Compete with each other

FROMOperator-centric

TOService centric

@MWJ #fwic

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…but OTT services aren’t playing the same game as mobile operators

Cool, exciting

Creative, new

‘Free’

Very viral

The users friend

Fast, dynamic

Challenging

Close to end users

Don’t care about operators

Performance or security issues tolerated

Happy to pivot

@MWJ #fwic

USER PERCEPTION: OPERATOR PERCEPTION:

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Ok we hear you…

…but what do we do?

@MWJ #fwic

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Millions of paying customers

Cash

Mass market consumer brands

Customer relationships

Ability to bundle

Large (often IP) networks

Cost advantage

Skills, experience

Distribution, support networks

Well to start with operators have assets that OTT services can only dream of

@MWJ #fwic

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And plenty of possible strategies. For example operators could do one or all of…

Operator assets

Focus on the network

Differentiate through brand, marketing, distribution or support

Services

Partner with OTT services

Create copycats

Innovate new services

Use all of that big data

@MWJ #fwic

Pricing

Create extra consumer value

Lower costs

Customers

Do what customers want!

Get them before your competitors do

Target nichesTechnology

Open up, work in new ecosystems

Differentiate by QoS

Support industry initiatives e.g. RCS

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Erm, ok, but you’ve still not told us what to do.

Well…that depends on…

@MWJ #fwic

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…what the most important people in all of this want – the end users

@MWJ #fwic

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They’re in different life stages, with

different experience,

skills, expectations

and willingness to do things

Understand the needs of your customers. They’re all different and all special!

@MWJ #fwic

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To illustrate this point

…who here today…?

@MWJ #fwic

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Owns a Nokia?

@MWJ #fwic

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Has heard of Textfromdog.tumblr.com?

@MWJ #fwic

16 @MWJ #fwic www.youtube.com/watch?v=C_S5cXbXe-4

Watched the OMG Cat?

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Wears a suit?

@MWJ #fwic

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Any idea what icanhascheezburger.com is?

@MWJ #fwic

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Actually used Instagram.com? No, really.

@MWJ #fwic

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Or Pinterest.com?

@MWJ #fwic

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The answer is the ‘Do something’ scenario

@MWJ #fwic

• Know your customer – who they are and what they need - and relentlessly target them

• Do something, anything

• Identify niches and grow with them

• Be confident! Try, fail, try again

• Increase value to offset the perceived benefit of OTT services

• Engage customers early before they become OTT users

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Which could be summarised as…

Be quick

Be creative

Be committed

Be great for the end user

@MWJ #fwic

23 11/04/2023 Confidential & Proprietary © Myriad Group AG 2012