Communications service providers (CSPs) went from having a lock on the market to panic mode in a short period of time. The market disruption created by Over the Top (OTT) services – think Skype and Facebook — threaten the long-term outlook for CSPs unless something is done. Increasingly, this something is marketing partnerships between CSPs and OTTs, a development that was unthinkable even a year ago.
The CMO Council has been monitoring and reporting on the communications industry and noted last year that most CSPs believed OTTs to be a serious threat to their business models. Without rolling out new products and services, CSPs can expect to see $13.8 billion in annual revenue fade away. This shift is happening as consumers give up SMS messaging via their favorite carriers and move to using Facebook or Google to communicate.
At first, CSPs tried to counter industry changes with new pricing models and ad campaigns. When those strategies proved minimally effectively, CSPs began reaching out to OTTs. Currently, 44% of these marketers are looking for partnerships with OTTs. To expand beyond ‘dumb pipe’ services, they’ll use their advantages, including big data, to become more customer-centric at the same time.
These changes signal that the next marketing campaigns that roll out from communications industry are likely to be jointly sponsored by CSPs and OTTs.[Source: Gardner, David. CMOs, New Telecom Partnerships. Cmo.com. 22 Jan. 2012. Web. 5 Feb. 2013]