ScreenHunter_354 Feb. 09 09.06Telecommunications companies need to unlock the value in over-the-top services

By Kathy Gibson

By hesitating to provide over-the-top services, mobile telecommunications operators in Africa could be missing a valuable business opportunity.

Pierre Cloete, head of TV, media for engagement practices for sub-Saharan Africa at Ericsson, points out that while the operators don’t specifically offer content services, their users are finding other ways of getting the data they want.

“It’s my opinion that the ,” he says. “But if you look at an analysis of network usage, they are already serving huge amounts of data, mainly YouTube, BitTorrent or pirated content. So video is being used, we know it is, but the operators haven’t come in line with the full value chain and content chain.”

Cloete offers an analogy of a car: “They have built the engine, but someone else is driving the car. They are missing a huge amount of value that is sitting in the content space. Companies like YouTube and Netflix have been successful because they have unlocked that value.”

The problem is that many operators still consider content to be an expense, instead of treating it like a commodity with its own value. “People buy the cold drink, not the bottle,” Cloete points out. “And content is the product that people want to consume.”

While operators are obviously protective of their revenue streams – which currently derive from providing connectivity – Cloete warns that data is going to become cheaper anyway. In other parts of the world, content is what’s driving revenue for operators, with data revenues having come right down.

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