Carriers lost. OTT won. Now what?

I think the "war" on OTT from the carriers perspective is more or less lost. It is now more about running down the clock and eking out as much revenue as possible.

A more pressing problem going forward is not the death of SMS or other services exposed to OTT, it is the failure to be open to innovation as well as often times missing out on strategic openings that are much more closely aligned with the carriers strengths than fighting OTT.

Carriers are as organizations uniquely ill qualified to "out-innovate" the OTT crowd. Not only do they not have the culture, organizational speed or even knowledge internally, they are also absolutely blocked from doing so by ARPU focus and quaterly earnings reports. It is just not going to happen.

There is a way forward though for carriers. It means partially embracing the concept of becoming a dumb pipe. Ie, tossing out most of what is not focused on the customer experience which is primarily centered around sales, customer support as well as enhancing the network experience. If this slimmed down block of "old carrier" is coupled with a small, nimble API-like services organization that can quickly integrate OTT or OTT-like services that have been developed externally into the aggregate customer offering, value can again be projected towards customers.

The main problem is not that early stage (who do not yet have 300M users) OTT outfits do not want to engage with carriers, they do, it is that there is no way for them to reliably interface with carriers. Often times there is simply nobody home when they call.

As I mentioned previously, there are also strategic steps that carriers can take to extract more revenue out of existing relationships, especially on the corporate client side which is very under served beyond basic BlackBerry services. This is a significant contributing factor to the drive for BYOD in addition to the rapid development of consumer HW.

Offering competitive plans, device pricing etc is a good first step but there is so much more than that if the carriers want to stay relevant going forward. They have to rethink their business model from the ground up.