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In my previous blog, I wrote about how OTT providers, like Uber, challenge and even limit social sovereignty. This is also true of OTT providers, like Skype and Whatsapp. If we look at what they are doing in our telecommunications industry, there are surprising parallels to the situation with Uber.

Local governments and authorities, like the Bundesnetzargentur in Germany or Oftel in the UK regulate local communications providers – but generally not OTT providers – in regards to:

  • Security:

    Local providers have to secure network infrastructure, e.g. against call tapping, data theft, even natural disasters. They also have to support legal intercept for law enforcement as well as emergency calling. And of course data protection laws ensure that our call data records are not shared with or sold to third parties, while providers must save CDR’s for a limited time and make them available to law enforcement upon court order.  Calls cannot be recorded without our permission. This list of regulations of telecommunications goes on and on, to the benefit of consumers and society as a whole.But who regulates and inspects OTT providers using data centers outside the country?

  • Quality:

    Everyone has experienced how OTT have much lower standards in regards to call completion, sound quality, message delivery, etc. Although in many countries, unsolicited, nuisance calls are forbidden by law, they’re coming back via untraceable OTT providers. We also have all read about how terrorists, hate propagators, and foreign governments have misused OTT services and we’re seeing local authorities struggling to regain control of communications services in their countries.

  • Underlying infrastructure:

    OTT services use the local mobile and broadband networks, PSTN telephone numbers, the last mile, etc. but make no contribution to the maintenance of this infrastructure. They generally don’t even pay local taxes. They push the costs for the underlying data transmission and required infrastructure onto their competitors and of course the end customers.

  • Fair wages and prices:

    OTT claim often sell their services at extremely low prices or give them away “for free”. But there’s no free lunch: many are collecting our data, analyzing it using profiling, selling it to third parties, manipulating us with unwanted advertising, and who knows what else.It’s kind of ironic. The Internet started out as something accessible only to those who could afford it, but now those who are wealthier avoid Internet profiling and advertising by using more expensive, secure and better quality alternatives to OTT products and services, while lower income people do not have this option.

    And of course most OTT are not taxed locally and have as few local employees as possible, circumventing and undermining the local costs of doing business, an unfair advantage over local providers.

In our telecommunications industry and indeed in many other industries, we as a society have to now decide what degree of local sovereignty needs to be maintained (or regained), especially for essential services such as telecommunications.

Although you get what you pay for and regulation can be costly, there might still be a way to retain some of the most valued aspects of OTT providers without all the aforementioned problems.

It seems to me this is exactly what Uber is doing in Germany: having failed to receive a license based on using private drivers and cars, they have now decided instead to cooperate with official taxi and car rental companies. Other companies, like MyTaxi, are already doing this successfully.

So what can you do as a classical communications provider whose business is threatened by OTT services? Of course, you can and should fight for the legislation of a level playing ground, as being considered right now by the EU.

But you can do more.

We have been helping communication providers implement WebRTC in their own network. With this technology, you can offer your customers Internet and smartphone apps that allow them to use voice and video calling, recording, conferencing, instant messaging, multiple phone numbers, etc. from any device anywhere in the world. Your customers should have the functional advantages of OTT services integrated in your regulated, secure and local network – and thus without many of the disadvantages of global OTT’s.

As always, let me know what you think. We should all watch this hot topic and not only see, but influence how it develops.

Want to know more about us and our solutions in 2021? Let’s schedule a meeting.
Marshall E. Kavesh

Marshall E. Kavesh

Marshall E. Kavesh, born in 1960 in the Unites States, received his MA in Germanic Languages and Literatures at The University of Pennsylvania and his Ph.D. in Social Systems Sciences at the Wharton School of Business, continuing with postdoctoral studies Mathematical Logic at the Ludwig-Maximilian University in Munich. Prior to ECT, Marshall worked eight years in the telecommunications industry as a subcontractor for Siemens. Together with the other two company officers, Hans Huber and Walter Rott, Marshall founded ECT in 1998 and is a principle shareholder in the company. As CEO, Marshall is responsible for general management, sales, marketing and finances.

One Comment

  • blank Ricardo Camarena Ramos says:

    While I cannot say no to the arguments you describe and even I have been working on Telecom or VAS vendor, I think OTT have been successful because of three aspects:
    1. the innovation they have shown and agility to implement new business models versus the slowly incumbent responses
    2. the lack of governments to understand and anticipate a proper regulation which ensures creativity is not vanished and customers obtain the benefits/protection they deserve at the same time.
    3. the wall garden policies implemented by many telecoms trying to retain customers not because of good services but making harder to switch. This model has proved to be wrong (see BB messenger). The good news is they are moving to providing more value instead which I think is the correct path.

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