Displaying items by tag: overthetop
It’s no secret that telecom operators have struggled against the popularity of over-the-top (OTT) applications like WhatsApp and Skype, who have challenged traditional voice and SMS revenue streams. Some operators have called for regulators to subject OTTs to legacy telecommunications regulations in order to even the playing field. But such suggestions are misguided, according to the ITU.
Telecom operators are stuck in a predicament regarding OTT services who utilize their networks. They have little control over the growth of OTTs because users should be free to use the internet as they please. The network carrier only carries the IP packets from source to destination. They might be aware of the packets and their contents, but cannot do much about it. Carriers have had to roll with the punches and figure out how to adapt.
Ultimately, using VoIP (voice-over-IP) is a cheaper alternative to making expensive phone calls because the user doesn’t have to pay to use the dedicated phone line and instead utilizes an internet connection without any extra costs. As is the case with most VoIP services, calls made using the internet are often free while calls made to a cellular network require a payment. The advanced communication functions of modern smartphones have played a role in the rapid growth of OTT services.
The question is: what can network carriers do about it? Telecom carriers have lost hundreds of millions of dollars of revenue to VoIP services, statistics show. Some network carriers reacted, of course, by imposing restrictions on VoIP services. AT&T did this when Apple released its iPhone and the US telecom operator didn’t want its network being used for VoIP calling. AT&T lifted the block in 2009 after pressure from the Federal Communications Commission (FCC).
AT&T had an agreement with Apple to ban apps that would enable iPhone users to make phone calls using a wireless data connection. The scandal was revealed when the FCC requested that the companies explain why Google’s Voice app was rejected for the iPhone app store. The FCC was led to investigate if AT&T and Apple were colluding to prevent competition, sparking the beginning of a sour relationship between telecom providers and OTTs.
Can telcos come out on top?
For decades, telecom operators had free reign to charge rates for voice, data and SMS largely in excess of their marginal cost, which created a market ripe with innovation. The International Telecommunications Union’s (ITU) recent report ‘The State of Broadband 2017’ highlights the struggle telecom operators have faced since that period began to wane, as online applications became increasingly popular with consumers around the world who wished to interact in ways not possible through traditional communications channels.
Communication has been transformed by the likes of Facebook, Instagram, Skype, WeChat, Google, WhatsApp and Viber. These OTT services have “transformed the way people build communities and search for information, and made valuable contributions to health, education, finance and entertainment,” ITU claims in the report. “Online applications now generate a significant proportion of the socioeconomic impact of digitization and utilization of the internet itself.”
The demand for OTT services has driven the telecom industry to a new era, and some telecom operators – in defense of their traditional revenues – have sought to “handicap” the growth of OTT players, the report suggests. It’s important to note, however, that these OTT services, however disruptive they may be, are driving demand for telecom operators’ broadband services. Without the content and services that OTTs provide, consumers would be less willing to pay operators for internet access, ITU claims.
“The operators’ complaints make as much sense as cable operators that sell access to cable channels complaining that people are watching too much TV, driving up the demand for their own services,” the report says, “Or a restaurant complaining that too many people want to eat its food driving up food costs. Operators sell access – not content – but people only want that access to use online content.”
Telecom operators, according to the report, claim they cannot invest in their networks because online OTT services have limited their ability to generate revenue. The ITU says this is “inaccurate” and “misguided”.
Some telecom operators have called upon regulators to apply the “same rules for the same service” by encouraging authorities to subject all online OTT services to legacy telecommunications regulations. ITU rejects this, emphasizing that OTTs don’t offer the “same service” as telecom operators, and that subjecting them to the same rules would be “entirely inappropriate”.
OTT services like Facebook and Google, for example, don’t provide equivalent services as telecom operators, the report points out. Operators provide access to the internet and some vertically integrated services that take advantage of, and are bundled with, general access. Online OTTs, on the other hand, provide interactive experiences for internet users that go beyond traditional voice and SMS, including payment services, chat services and photo/video sharing.
The fundamental differences between the telecom sector and online OTT services has led to the establishment of different rules, the report highlights. For instance, telecom regulations are intended to ensure that established operators – who own network infrastructure with high barriers to entry and face limited competition – do not use these privileges to the disadvantage of consumers. OTT services, by contrast, don’t control network infrastructure and must compete fiercely to retain customers who could easily be swayed.
There’s also the perception that OTT payers get a “free ride” on telecom network infrastructure which is financed by operators. But in truth, OTT players invest billions of dollars annually in a combination of physical facilities, according to the ITU, including data centers, fiber networks, servers and routers, which form an “essential part of the physical fabric of the internet”. In fact, according to the report, online OTT players invested an average of US$33 billion per year in infrastructure from 2011-2013.
ITU argues that telecom operators should recognize how much online OTT players drive consumers’ willingness to pay for internet access, which then provides more opportunities to generate revenue and finance new infrastructure. According to the report, consumers who demand the most data tend to spend more money on mobile contracts that feature high-speed data – revenue that goes directly to the telecom operators.
“Regulatory authorities do not have to choose directly between the interests of online application providers and telecom operators,” the ITU report concludes with. The most important aspects of internet usage that regulatory authorities should focus on, the report suggests, are adhering to customer needs, ensuring that the internet is widely available, and prioritizing connectivity, competition and innovation.
Asia Pacific OTT (over-the-top) revenues from TV episodes and movies on platforms such as Netflix will reach $24.41 billion by 2022, according to Digital TV Research, which is triple the $8.27 billion recorded in 2016. The total will increase by nearly $3 billion in 2017 alone, the report says.
China will command half of the OTT revenues for the 22 countries covered in the Asia Pacific OTT TV and Video Forecasts report by 2022, increasing from just over a third of the 2016 total. China and Japan together will account for two-thirds of the region’s total revenues by 2022.
Advertizing revenues on OTT sites and SVOD (subscription video on demand) revenues are running neck-to-neck, the report says. SVOD will be the leader in 2017 and 2018, but AVOD (ad-based video on demand) will regain the crown from 2019, it claims. China will supply 61 percent of the region’s AVOD revenues by 2022 – or $7.27 billion.
Asia Pacific SVOD revenues will increase from $3,388 million in 2016 to 9,090 million in 2022, the report says. China will overtake Japan to become the SVOD revenue leader in 2017.
Digital TV Research forecasts 234 million SVOD subs by 2022, up from 91 million in 2016. China will have 139 million SVOD subs (59 percent of the region’s total) in 2022. India and Japan will together account for another 50 million, leaving only 44 million divided between the remaining 19 countries.
The report concludes: A quarter of the region’s TV households will subscribe to an SVOD package by 2022, up from just over a tenth at end-2016.
Thaicom Public Company Limited, a provider of satellite communications services on an end-to-end basis, announced that it has signed a memorandum of understanding (MOU) with Huawei Technologies (Thailand) Co., Ltd. and Starcor Media Technologies Limited for the development of an OTT (Over-the-Top) platform in Thailand.
The companies have partnered to create value-added services for the next generation OTT platform for enterprise, educational, government and telecom sectors in Thailand. Under the agreement the companies agreed to develop content-rich OTT ecosystem services, including TV streaming and video on demand.
The creation of this joint OTT ecosystem will benefit telecom operators in Thailand, who will be able to seamlessly integrate the OTT services with their products and deliver their contents to multi-screen devices such as smart TVs, smart phones, tablets and notebooks.
“We would like to thank Huawei and Starcor for their trust in us to provide the satellite capacity and infrastructure needed to deploy OTT services in the near future in Thailand,“ said Patompob Suwansiri, Chief Commercial Officer of Thaicom Public Company Limited. “We are confident that the partnership with Huawei and Starcor will enable us to continue to provide the satellite capacity needed to fuel the new digital TV ecosystem. The OTT platform represents a new service for Thaicom; it will complement our existing satellite platform and carry it into the new digital era.“
Robin Lu, Director of Enterprise Business, Huawei Technologies (Thailand) Co., Ltd. Said: "This partnership with Thaicom and Starcor is an example of Huawei’s determination to champion OTT-as-a-service platform on a worldwide scale in cloud and big data era. Satellite technology serves as an enabler to unlock the digital ecosystem for new market opportunities such as OTT. Our goal is to equip our customers with the advanced industrial cloud and big data technologies, to provide a powerful, best-in-class OTTaaS platform which combines fast speed and rich media resources with the renowned reliability of Thaicom’s satellite technology.“
And in turn it will empower Huawei to create a powerful entertainment and educational OTTaaS platform value proposition in Thailand.
Ivan Zhang, President and CEO, Starcor Media Technologies Limited, said: "We are proud to be involved in the development of Thailand’s future digital TV and content ecosystem. Through the cooperation with leading telecom service provider Huawei and leading satellite operator Thaicom, Starcor is able to deliver an unparalleled new entertainment experience."
Under the MOU, Thaicom shall provide the network connectivity and data center services for Huawei and Starcor. While Huawei will provide the Infrastructure as a Service (IaaS)—cloud computing that provides virtualized computing resources over the internet—Starcor will contribute the OTT as a Service (aaS) platforms, and integrate third party media and content management platforms.
The MOU comes at a time when OTT content continues to grow in popularity among viewers in Thailand. The collaboration will enable the companies to help customers seize new opportunities in a rapidly changing media environment, by creating an offering tailored to their needs.
Marc Halbfinger, PCCW Global CEO, was present at this year’s BroadcastAsia event held in conjunction with CommunicAsia and EnterpriseIT in Singapore. Speaking to Active Telecoms, he discussed PCCW Global’s international activities, and its unique role in enabling service providers and content providers with flexible approaches to capital infrastructure and quality of service (QoS).
Hong Kong-based PCCW Global offers the latest video, voice and data solutions to multi-national enterprises and communication service providers. With a portfolio spanning cloud computing, security services, network, unified communications and media, PCCW Global has developed into a leading provider for best in class performance based on leading edge, next-generation network design, and software management tools that facilitate flexible usage.
Speaking about the company’s involvement at the BroadcastAsia event, Marc said that PCCW Global has showcased at CommunicAsia and BroadcastAsia for many years. Even when service providers have chosen not to attend in the past, Marc said his company always felt that the event is an important forum to attend. He said: “It is nice to see resurgence this year of application providers in this media-anchored environment.”
“We think it is a critical junction point for buyers of new technology, and there are certainly many people here at this years’ show looking at new technology, particularly surrounding OTT media, where we believe we have value and an advantage because of our history in this space in Hong Kong and around the world since 2003,” said Marc. “We continue to make various investments in this space that have assisted to raise our profile and to assure that we have a meaningful portfolio to anyone interested in providing content services. For us, this is a natural place to be every year.”
PCCW Global holds a strong presence in Asia. Hong Kong and Singapore, as well as South Korea and Japan, have emerged as leaders of digital advancement in Asia, and PCCW Global has built strong ties with these technology and finance leading markets.
Marc believes that the undersea cable capacity bridge between Singapore and Hong Kong acts as the gateway between Southeast Asia and North Asia. He said that when you look at any network infrastructure that is developed regionally, you will often see a three-point infrastructure capability that will focus on Hong Kong, Singapore and Japan, and PCCW Global has always invested significantly in these locations to make sure that its network resilience in Asia (whether north, south, east, or west) is being provisioned correctly.
“Our core network connectivity out of Singapore is very similar to that of Hong Kong; in fact, we have a license here in Singapore, whereby we are able to offer a range of services,” said Marc, adding: “We do a large amount of work assisting media players, service providers, and network infrastructure for players in Southeast Asian countries. I think for us, Singapore is one of the natural locations for us to be on a regular basis.”
Solutions for media and OTTs
When asked about PCCW Global’s role with Over-The-Top services (OTTs), Marc said you first have to define an OTT. He defines OTTs as applications, content, or any type of element that is attractive to an end-user delivered freely through a variable fee that is sitting on top of the capitalized fixed-network that is usually built by service providers. He said PCCW Global invests in core infrastructure, but also develops software-based tools to provide its end-users (whether consumers, content providers, service providers, or enterprisers) with the applications that get delivered over it. “Arguably, we are both a service provider and an OTT player,” he said.
“In the enterprise space, companies that are providing hosting services or any type of storage service online, or cloud-based infrastructure, are considered the enterprise-focused cloud-based OTTs,” said the CEO. “We work with these cloud providers cooperatively, and at the same time we provide services which may appear similar to them, but we are focused on assuring that not only can we provide the cloud-based application which might be referred to as OTT, but also provide the capitalized fixed infrastructure that assures the content will be delivered with measurable quality of service (QoS).”
Marc stressed the importance of quality of service. He said that delivering quality, end-to-end, is something that OTTs may not see as a core offering, and that is something that he feels is necessary to do. “We can be both OTT, and also QoS (Quality of Service),” he said.
PCCW Global has a range of services under the umbrella name of ‘Global Media’, which Marc said ranges from transcoding capability of content, to CDN delivery of infrastructure, content management systems, software tools that are necessary for the business-support systems of the revenue line for OTT content, operations support systems that are necessary for anything that has to happen in the editing of content, digital rights management, and most of the IT tools that sit on top of traditional network infrastructure capability as these move on more software optimized environments.
“We believe it is significant to facilitate a mobile operator or any other service provider, to enter the OTT space knowing that we can provide them every component that is necessary from beginning to end in delivering a set of monetizing content services,” said Marc. “At the same time, if a content provider such as a linear television channel in New Zealand, or the United States, or the Middle East, wanted to offer their linear broadcast services direct to an end-user (over-the-top) we are able to facilitate them to do that as well.”
He said that one of the major challenges of content providers today is that they have the content and own the rights to it, but may not have yet ascertained how they can get that content over-the-top efficiently and direct to an end-user, because they often don’t have the IT tools necessary to bill a customer directly, or may not have the analytics to measure which users are watching what content and under what conditions. PCCW Global can facilitate broadcast channels to go over-the-top of any network in any location around the world, provided the company has the rights capable to do it.
“Software tools, hardware development, and global transport: we are able to do all of this, and we are able to do it as a holistic offering, or as sometimes might be preferred to breakdown those components into their sub-layers, which we are able to do as well,” said Marc. “Sometimes you’ll find a service provider or a content provider that doesn’t really need the transcoding capability, but they need the IT tools to be able to bill a customer that they have never dealt with before in a distant market. We help content providers become service providers, and also help service providers enter the game of delivering content.”
Basically, it’s PCCW Global’s job to facilitate companies who want to build a brand beyond their local capability, and to give them all of the toolsets, including IT, hardware, and infrastructure to get to where they want to be.
International projects and future aspirations
Covering a wide range of services, PCCW Global has ventured out into various projects this year, including collaboration with Keppel Data Centers Holding, and singing an international MoU to contribute to develop the Africa-1 subsea cable system.
PCCW Global’s announced collaboration with Keppel to develop an International Carrier Exchange in Hong Kong was shared in April. Marc says the collaboration works because PCCW Global brings a “certain customer knowledge that combines familiarity with the data center space,” adding, “Keppel are a well-known name both at the wholesale level and retail level of building very power-efficient data centers that are attractive to large-scale users.”
“Keppel today are distributed globally, and interestingly enough, despite their Asia pedigree, they had not really invested in the Hong Kong area,” Marc added. “We felt that the relationship with them both from an infrastructure management and a joint relationship around commercial sales and delivery made sense for both of us. We visit them often and have a history with them in other areas, making it a very natural interaction for us.”
Marc also commented on the international MoU PCCW Global recently signed to connect the Middle East to Africa and Europe by means of collaboration among MTN Group, Saudi Telecom Company (STC), Telecom Egypt, and Telkom South Africa, to construct the new Africa-1 subsea cable system. The organizations named in the MoU represent a wealth of experience and expertise in deploying major cable systems, and they are expected to be joined in the consortium by other carriers seeking to contribute to and to share, in Africa-1’s success.
“We felt that it is necessary today to continue building out capacity capability to and from East Africa,” said Marc. “We also see natural connections to the AAE1 system (Asia-Africa-Europe). Our relationships today with both TE and with STC are very positive, and also with the other carriers named in the MoU. The ability to collaborate on what we believe is important infrastructure that would reduce the cost basis of bringing a high performance capacity from all over the world into East African markets is a very important element in our global network development.”
With large-scale projects underway and an ever-increasing profile, looking ahead, Marc said that PCCW Global’s ability to provide applications capabilities to service providers and content providers around the world that sit on top of the company’s physical network infrastructure, that delivers a global transmission backbone, was a sensible way to go, adding that the company is taking steps to also increase its human infrastructure in this space.
Marc concluded by saying: “We are becoming increasingly diverse in assuring that we provide not just the connectivity, but also the IT-based application elements of service that go on top of the connectivity layer, and finding the ways to interface with others who do the same as this is what is so critical today.”