In a bid to survive the ever-growing video on demand (VOD) space, OTT service provider Disney+ doubled its spending over the last five years to acquire content from various media to feed its 26.5 million subscribers. With leaders such as Netflix and Amazon riding the roost, in 2020, the global video streaming market size was valued at $50.11 billion and it is expected to expand at a compound annual growth rate (CAGR) of 21.0% from 2021 to 2028.
According to experts, this massive content-guzzling trend, in addition to the initiatives and innovations to provide the best digital experiences of high-quality content are things that are here to stay for the long haul.
This is a space where telcos must continuously transform themselves and innovate to stay ahead of customer and market requirements. Telcos remain central in helping people connect to faster and better internet, support businesses in their digital transformation, and add new services in sectors like health, education, retail, manufacturing, etc. To stay relevant, telcos must up their ante in investments in upcoming technologies and constantly look ahead for prospects.
Not surprisingly, the demand for better connectivity, better transmission, and better delivery has led analyst firm Dell’Oro Group to predict that the global 5G core and RAN Capex will exceed $20 billion in 2021. Conversely, the heavy traffic in video and content sharing is valid proof for the growth in investment in technology such as massive MIMO for greater indoors connectivity which is expected to surpass $10 billion by end of this year. In addition, there are already talks of the evolution of 5G to 5G Advance and 6G to reach the market by 2030.
Ebbing of traditional services
Thanks to the Covid-19 pandemic, the lifestyle and behavior patterns of consumers around the world have fundamentally changed. The way we connect and interact with colleagues, companies, and services is not as it used to be during pre-pandemic times and it will never be the same again. With 5G, AI, and the Internet of Things (IoT) vendors are compelled to offer different products and services and telcos need to align with these developments to stay ahead of the curve.
Meanwhile, vendors in all environments need to expand their offerings, going beyond the basics of voice, to deliver everything from SMS to video. Internet messaging, VoIP and other cloud-based technologies are taking over the industry. Even smartphone traffic is predicted to move away from WiFi connectivity with the gradual penetration of indoor 5G, resulting from increased use of video/audio streaming, AR applications and cloud gaming. This only means that businesses of all sizes and sectors need to consider how best to evolve their service packages to suit the new cloud-focused community.
Conversely, with the need to find efficient ways to geographically connect workers and devices, organizations these days are increasingly implementing Unified Communications and Collaboration (UC&C) solutions to ensure that their technology functions smoothly and securely as one unit for near real-time collaboration. Service providers and carriers must be agile and apt to support UC&C integrated communication tools, such as voice, IP telephony calls, instant messaging, desktop sharing, web, audio, and video conferencing for seamless virtual interactions.
Demand for innovative ideas
The changing internet traffic trends of users are pushing the capacity limits of operators’ networks. As the demand for higher bandwidth grows, IP networks that carry this broadband traffic need to scale up to support uninterrupted connectivity. Moreover, with the infinite possibilities of advanced technology, consumers are expecting solutions that will address their needs and deliver exceptional results.
New technologies such as OpenRAN are increasingly being seen as workable solutions to help operators cut the cost of developing mobile networks. By easing access to work with new vendors by de-coupling hardware and software components, the technology offers an innovative alternative to efficiently manage the networks. For technology to keep up with today’s demands, networks must be self-driven.
The time has come for telcos to move from being network-centric to become customer-centric. They need to be creative in finding new takers with a fresh and occasional relook at their potential consumers. For instance, as part of its innovation to keep connected with their consumers, Etisalat recently launched the “Hello Russia” TV pack in collaboration with UAE-based content licensing management company, covering a wide range of genres from premium movies, general entertainment, kids, documentary, sports to comedy, music and more.
By doing so, Etisalat has tapped into its Russian-speaking customers as UAE is home to the largest Russian-speaking community in the region, comprising about 1.5 million residents and tourists.
In another instance, as part of Abu Dhabi government’s Ghadan 21 accelerator programme, UAE-bred Starzplay, a leading subscription video-on-demand service, is collaborating with Abu Dhabi Investment Office (ADIO) in AED2 billion ($545 million) Innovation Programme to set up Starzplay headquarter in Abu Dhabi to offer exclusive content to customers. With such ongoing trends, other fully managed and turnkey over-the-top (OTT) solutions will come up with their offerings and thus generate a thriving market for content consumption. Network providers and system integrators should look for ways to benefit from this huge untapped source of potential revenue.
Moreover, the Middle East region is the fastest growing online gaming population in the world, holding 25% of the gaming audience, followed by Latin America 13.9%, Asia Pacific 9.2%, Western Europe 4.8% and North America 4%.
As per a report prepared by Orient Planet Group, the Middle East region’s mobile gaming segment is expected to reach a projected value of USD 4.4 billion by 2022, which tripled in growth from the $1.06 billion posted in 2016.
With such ongoings, carriers can capitalize on bundling various streaming and gaming services in their tariff plans. Consumers prefer a single provider to meet all their content needs and operators are well placed to do that. They can deliver value and convenience to consumers by offering them access to wanted OTT service with a single login and a single bill.
In conclusion, with all things said and done, there is no one way for telcos and OTTs to benefit from their mutual partnership. As technologies evolve, so will the needs and demands of consumers and the methods of delivering them. However, at this point, it’s best to summarize it with a recent quote from an industry expert: “It’s not about competing with Disney and Netflix to take the last dollar from the consumer wallet, it’s much more about positively disrupting every other sector,” says Alex Sinclair, CTO GSMA.