HomeTelecomsWhy don’t device manufacturers complain about ‘Over The Top’ ?


Why don’t device manufacturers complain about ‘Over The Top’ ? — 2 Comments

  1. Richard,

    1) the chart is disingenuous as to scale and so the reality cuts against your headline. The chart makes the $530 billion appear to be ~40%, whereas the actual ratio is ~16%.

    2) the real problems with the mobile (and comms in general) ecosystem are:
    a) the vertically integrated business models of the service providers (which are creating inefficiencies elsewhere in the stack), and
    b) the lack of bilateral or balanced settlements both north/south as well as east/west in the model.

    We (the trade and capital markets) need to address both issues simultaneously.

    3) Demand is created from the core, not the edge. Today’s model of settlement free IP networks has resulted in:
    a) balkanized endpoints and islands,
    b) inability to upgrade technologies ubiquitously and evently (IPv6, etc…)
    c) wholesale insecurity
    d) (re)silo-ization
    e) a growing digital divide

    The growth we’ve witnessed over the past 30 years (wireless and packet based) is as much a “catch-up” to technology innovation that had been occurring before “open access” satisfying latent demand, as well as new technologies and demand models.

    4) As we look to a future (all possible at scale today) of 4K VoD, 2-way HD collaboration, mobile first, and IoT trends we see that the current (vertical) business models at the edge access boundaries and policy (lack of ubiquitous, mandated equal access at the edge, particularly wireless) are not conducive to efficient service creation.


  2. Hi Michael. Thanks for the comments.

    You are right that the chart is not to scale. However, the revenues are not all end-user spend either – there is a value chain issue here so that (for example) the $230B revenues of site operations are a cost to the $1T mobile operator business. So I think we *can* compare $530B of ‘OTT’ against $1T of ‘MNO’ end-user spend.

    That said, your points are an excellent commentary on where the business model elements are failing. My point was exactly that: the “OTT complaints” are a symptom of a failed business model.

    Thanks again.

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