Telecoms stand to gain from the OTT revolution through superfast broadband revenues, a recent report suggests.
The report from Arthur D. Little and Exane BNP Paribas, ‘How to ride the OTT wave’, suggests that telecoms could offer value-added services to both traditional and emerging players in order to capitalise on the competition.
The report comments: "telcos can create value through an "enabler" role, monetising their network assets…turning the growing strains on networks into an opportunity."
This could be achieved by charging customers for better speeds and data traffic and charging the OTT providers for quality delivery.
It also suggested that the telecoms providers could generate revenues as direct players in the online video or pay-TV markets, depending on the telco’s scale and specific market contexts.
The report predicted telco revenue decline would halt in 2016 and the sector would return to growth from 2017, seeing 1 percent growth per year in the longer term and a +0.6% CAGR from 2016-2020.
"While in the short-term, we believe that traditional players will be ready to meet the challenge posed by OTTs, a select number of OTTs could reach the scale necessary to compete with pay-TV on premium content," says Bertrand Grau, Principal at Arthur D. Little in Paris and author of the report.
He added: "However, there is a window of opportunity for traditional media to partner with telcos to improve their respective position vs. pure play OTTs."
"For the first time in three years, optimism has returned to telecom executives across Europe, with a majority expecting the sector to return to revenue growth. We expect a progressive stabilisation by 2016, and then a return to growth from 2017 – at a rate of approximately 1% per year," says Antoine Pradayrol, analyst at Exane BNP Paribas and principal contributor to the report.
The report surveyed over 110 industry executives from 17 countries.