Telecoms: The Impact of Over-the-Top Content
by Zhong Wang on April 10, 2014
It’s Chinese New Year – Year of Horse. This used to be one of the best business time of the year for Telecom operators, in China for example.
Traditionally, Chinese people took this time for family gathering, friendship bonding, just like westerners at Christmas. Being a “connection-oriented” society – meaning whom you know and what kind of relationship you have play much important roles in social life and business – people used to make trips house by house in the old days, which was a rather tying task. Nowadays modern technology has helped by means of landline telephone, cell phone and messaging. Imagine at Chinese New Year’s Eve, when more than 1.1 billion mobile phone users in China, each sending at least a few messages to his/her relatives/friends/co-workers/bosses … and each message costs 0.1 Chinese Yuan. Messaging alone, hundreds of millions in revenues were made on a single night, by Telecom operators.
Not any more.
With the advent of Over-The-Top (OTT) content – audio and video delivery over the Internet without system operator involved – mobile text and voice messaging communication service applications such as WeChat are eating into the big chunk of pie of revenues of incumbent Telecom operators: WeChat, within 3 years of existence, attracting 300 million users in China and 100 million world-wide, provides text, audio, and now video delivery for users, for free, which essentially threatens to replace all those cash cows of Telecom operators such as voice and messaging, all running on top of Telecom operators’ network, which cost them millions and millions to build and maintain.
So what can Telecom operators do about it?
Although some of them argue that this new service could help increase their data usage thus increasing their revenue from data, how much positive impact it may have? Or for those arguing for a negative impact, how much would that be? If Telecom operators want to negotiate with service providers to share this revenue, which a number of them now intend to do or already start doing, they need to at least have some concrete data and statistics such as traffic volume, positive/negative impact on the network from these services (such as short but frequent heart-beat traffic ) to support their claims on the negotiation table.
Application Classification can help with that.
With Application-Classification-enabled FlowView product from AppNeta, which by the way, can classify traffic from WeChat as Heart Beat, Login, Media, Message and Update, this impact could potentially be quantified and statistics could be collected. How to use them and to which extent they can be used are up to the Telecom operators.
Looking ahead, Application Classification and FlowView can continuously help Telecom operators to actively monitor their network activities, spot new market/network disrupting applications and services, streamline their operations and keep the costs down and revenue/profit up.