Initially, simple internet access and telephony sufficed for end users, allowing telecom operators to generate revenues from these services. However, as technology evolved and customer needs changed, OTT providers emerged. These companies started making money without significant network investments, attracting the operators’ subscribers. The entire telecom market shifted, making it impossible for operators to rely solely on traditional services.

As usual, OTT providers generate substantial revenues by offering concrete services or products such as streaming platforms, messaging apps, business phone systems, etc. Competing with these players, operators face the two main challenges:

Even though OTT players hold an edge in marketing and innovation, telecom operators have assets that should allow them to participate at nearly all levels of the OTT landscape. However, operators’ success hinges largely on their capacity to strengthen their existing business and channel their strengths towards areas where they have genuine opportunities to make headway.

It might seem like telecom operators aren't strong enough to compete with OTT players, but that's not true. In reality, operators have distinct advantages that competitors can only dream of. Here are a few of them:

Each of the advantages outlined above provides a foundation for specific strategies you can employ to maintain market competitiveness. Now, let's delve into the practical aspects.

To develop a successful strategic response to the rise of OTT competitors, telecom operators should first assess their significant assets and capabilities. Determining how to leverage these resources to compete with or collaborate with OTT players is crucial. Let’s discuss the most effective strategies further.

Telecom operators have access to vast amounts of data that OTT providers can hardly achieve. Such data can be monetized in different ways. For example, telcos can create data marketplaces where anonymized and aggregated data is sold to third-party companies. This option is especially interesting for the following sectors: healthcare, retail, and automotive. Naturally, data privacy regulations vary by location.

Another example of data monetization is the operators’ potential role as the platform for IoT. Network operators could be the backbone for the complex data flow, linking machine sensors to back-end services like analytics or cybersecurity. This approach is especially desirable as machine-to-machine revenues are growing. Using such opportunities will definitely help you stand out from the OTT offerings.

Here’s a smart strategy: a telecom operator can also become an OTT provider by finding an experienced vendor. For example, you can launch a white-label telecom service like a cloud PBX. This option allows you to customize the vendor’s platform with a logo and corporate colors, ensuring subscribers associate the service with your reputation.

In other words, telecom operators can launch services that will not be worse than those of OTT players. Some vendors offer marketing, sales, and technical support, allowing you to compete successfully with niche providers. Your subscriber base is a huge advantage you can use to promote new services.

Starting a cloud PBX business from scratch and building your own telecom service requires investments and expertise in the dedicated field. This point underscores the importance of an experienced vendor offering a RevShare model, which eliminates the risk of wasting resources in vain due to the unpredictable consequences of an unknown service launch.

The OTT industry offers plenty of space and revenue for telecom operators and third parties. Consequently, some players choose collaboration over competition to expand their value chains. For instance, Deutsche Telekom Group is expanding its partnership with Netflix across multiple new European countries. Another example is the partnership between BT, a major telecom operator in the UK, and Amazon Prime Video.

This collaborative approach is likely the most beneficial for everyone involved, as consumer preferences are clear: 51% of consumers wish they could pay one monthly fee to access all their content, regardless of its source. Additionally, 50% hope that all the programming they want will eventually be available in one place.

Despite the success of OTT providers on the market, telecom operators still have advantages and strategies to stay competitive. As a rule, telecom operators deeply understand their customers and can offer them additional opportunities, so don’t miss the chance to stop losing your subscriber base. For example, you can monetize data, launch new services, and partner with some OTT platforms to stand out. As for services, you can find a professional vendor that will allow you to launch a white-label cloud PBX, UCaaS, CPaaS, or other communication solutions.