Editor comment: The discussion around Joyn market presence/ evolution, OTT and the competition between mobile operators has been on the TOP board. Could these news be the beginning of a larger partnership !? Like Deutsche Telekom and Spotify !? Should Joyn and OTT have the same level of QoS if the a partnership is created !?
Over-the-top services like Skype voice calls or Viber messaging sap
carrier revenues. But Talmon Marco said users are just going where the
Carriers love to bash companies like Skype and WhatsApp that provide
services on top of their mobile networks at the Mobile World Congress
trade show. But one thing was different this year: Viber Media founder
and Chief Executive Talmon Marco entered the lion's den to defend the
Viber's free messaging service, which
competes directly with carriers' own high-profit services for text- and
multimedia-messaging services, is a prime example of the despised
over-the-top (OTT) approach. Marco showed no remorse for sapping telco
revenues and argued that users are just moving to where the innovative,
useful services are taking place.
"There's no difference between the SMS of 1993 and 2013," Marco said,
whereas in the two years since its launch, Viber has added group
messaging, delivery confirmation, indicators that the other person is
typing, location sharing, and high-quality photos. "We delight our users
with cool new features." He backed up his case with the example of Monaco, 90 percent of whose
35,000 population uses Viber -- even though SMS is free in the country.
Marco spoke immediately after two telco chief executives, Deutsche
Telekom's Rene Obermann and KT's Suk-Chae Lee, told of their unhappiness
with OTT services. Carriers are held back by regulations that don't
apply to OTT providers, for example. Obermann described how OTT companies see their relationship to carriers:
"You invest, we take the profit." He and his peers have been saying
this for years at this show and others, but he thinks sooner or later
something has to give.
"It's not sustainable that the network makes all the investments and others just get a free ride," he said.
Lee said OTT services are bleeding away the business of KT, the largest
mobile operator in South Korea, because it must invest more and more
into its infrastructure but it doesn't reap the rewards.
"In the last four years, KT revenue has stagnated, but capex [capital
expenditure spending] has increased to $4 billion from $3 billion
before," he said. "The builders of this cyberspace, the telcos, may have
to watch the space be dominated by the giant Internet players or the
That's a stark contrast to Viber's business. "Our whole infrastructure costs under $200,000 a month," Marco said. Marco suggested a path to reconciliation, though: partnership. He said
he won't pay the telcos for free services, but he's willing to share
revenue for paid services.
"We're definitely prepared to share revenues when we charge users," Marco said.
Already Viber pays a percentage of its revenue to the app stores that
distribute his company's app, but a carrier could step in and do the
distribution, too. "That's 30 percent of our future revenues up for
grabs by carrier. Come and take it," Marco said. Obermann seemed open to the idea, pointing to a partnership Deutsche Telekom has with music-streaming service Spotify. "We have a revenue share," Obermann said. "Users love it, and we have growing number of subscribers." Lee sounded more skeptical. OTT companies, in the long run, hurt economies that are increasingly dependent on the Internet. "Nobody can stop OTT," he said. "The question is, if it creates an
economic cost burden to society, then somebody must take the burden."