Fast money in telecom

Now it’s time for interesting stories. I have a friend Pete, he is not dilly or anything like that and he knows that to take credits from organisations that are not trustworthy is stupid and dangerous. However, he also has a wife with demands like new shoes, new dress to go to the theatre, vacation somewhere abroad… That made Pete go and take a credit with awfully huge percentage.

Why have I shared this, and what is the connection with the telecom?

And the funniest thing is that there are such Petes among the shareholders and management of telecom operators. Business owners are running around offices promising quick solutions to all problems and endless magic. Sounds fantastic, but no. And I will explain instead of the logo of this bank which gave Pete credit with awfully huge percent imagine the name of any OTT or most of the consulting companies, and you will get an interesting model of an entrepreneur’s voluntary suicide.

Some of the readers will say that it even sounds stupid. Many will recognize themselves and will look for excuses and explanations that some are lucky, not everyone gets there. Maybe there will not be any problems, they promised, but the fact that no guarantees are spelled out in the contract is not scary. Gentlemen take each other’s word for it.

The argument of an honest magician “We will do everything for you, and we will bring you money for it, 30% percent of TV sales (in the case of OTT), give us your base! Do not think anything bad, we are honest, kind, and disinterested, your base will not go to competitors. “ Sounds fabulous!

It will take little from the operator, just a little — to attract his subscribers to another provider for TV services. In words it is simple and free, anyone can attract customers for free.

By the way, in addition to the cost of attracting, 30% of the remuneration also includes payment for renting a network, for promoting someone else’s telecom operator on its own network, as well as technical support and service. Well, no one said that to get money is easy.

Still doubting? Argument number two: “OTT service will only work with you.” And if your subscriber goes from your network to a competitor, but continues to use OTT, then the OTT provider just like you will get upset, and without pleasure will continue to profit from this subscriber, and give 30% to your competitor, or even keep to himself.

Agreements to disconnect a subscriber from OTT services in case of transition to a competitor on the basis of a partnership are met with understanding only in words and very rare. The OTT provider does not prescribe anything like that in the contract. And this is logical — who will dig their own grave or give the keys to the apartment where the money is?

By the way, all OTT providers declare that they work on your network on the terms agreed with you. But how to explain the massive advertising of their services aimed at attracting subscribers directly, regardless of which network the client is on? Maybe even six months for free!

How is it possible? But what about 30%? What about working on agreed terms? Until now there is no effective way for the operator to track the number of subscribers using the OTT service, other than honesty. And the advantage of the integrated offer of IPTV + broadband access disappears and becomes a disadvantage, the subscriber can change networks like gloves without losing modern TV and familiar content. And none of the OTT providers connects an increase in the churn of broadband subscribers with an OTT partnership. Most likely, there is a problem with your network. At the same time, for operators who build their interactive TV solutions, the opposite is true, television is an anchor service.

An OTT operator, as the owner of a customer base, can sell broadband subscribers to competitors. For example, “Bad internet, change your provider, we strongly recommend it”. Some say that the quality of TV drops first (although everything is fine on the network), and then the subscribers change for a competitor, since the same TV channels works well there. Miracles and magic!

At CROS-2019 (telecommunication conference), one operator spoke about this problem, and everyone quietly agreed that yes, it exists! But no one admitted mistakes. At the same time, the majority believes that if there are many subscribers on OTT, then there is a risk of losing everyone if the service is refused. And they seem to be paying some money, but what if it will pass by itself? HUNDRED PERCENTAGE will pass, but — alongside with the base to the competitor. And it’s hard to break free, but uncomfortable on the hook.

There is a scheme of OTT operation which I have not seen it in practice (it is difficult to identify). All OTTs, one way or another, are “friends” with some large network operator, and can give the accurate information about the better place, what direction to choose to evolve. Not to mention the subscriber base and strong recommendations to change the provider.

A curious phenomenon of how OTTs mimic under the IPTV platform (white label) can also be observed, like, “we are not OTT, we are good, just the scheme of work is similar.” They see that people are beginning to understand, and fewer and fewer naive ones can be bred. New schemes are introduced: recommend their equipment with huge discounts. But if you are already “on the needle”, and you are not satisfied with something, you will not be able to change neither the content, nor change the platform or equipment — you will lose everything.

Now we see a boom of so-called “OTT assistants”: ready for anything, will give the equipment at cost price, the content is given as a gift, try it without risk, add at least 1000 subscribers, and then we will give the platform for free and allow any content and equipment. But this is not written in the contract, everything is based on trust. Everything under the guise of imaginary convenience and benefits, so that the operator does not think and does not choose.

An alternative solution for many operators is content aggregator services. Meaning an operator who gives the provider the access to pre-formed packages of TV channels. Yes, it’s like a mortgage loan — there is a minimum price per month, the channel package is standard for everyone. However, it can be changed by adding your own (which have direct contracts). Not everyone can distinguish a true aggregator from a false one, which is represented by an OTT. The key difference is not the way the content is broadcasted (although, of course, the presence of multicast broadcasting suggests that this is a true aggregator; but a true aggregator can deliver content in unicast as well), but the toolkit for working with subscribers. A true aggregator simply does not have mechanisms for taking away “housing” — there is no billing for subscribers, there is no subscriber registration form on its page. Considering everything mentioned above, the minimum payment to the aggregator is still less than working directly with copyright holders, but as the client base grows, the provider can move to direct contracts at any time, and all subscribers will remain in their places.

An operator that forms its own IPTV service with the ability to select unique content, functionality and equipment at any time understands all the disadvantages and risks of promoting a competitor on its own network. It doesn’t matter what the competitor calls himself and what he promises. Dive into what you are doing! Stop believing in fairy tales and bright future, not understanding anything. Many are bred for a bright cover, and the fact that nothing needs to be done. They seem like adults but give away their business (subscriber base) for beads and bright wrappers with no less vivid promises and explanations. And when they understand, feel ashamed and scared to have become led.