Futurecom 2016: blurring the OTT line

Tuesday, October 18, 2016

The lines separating over the top (OTT) internet players from telecom operators are getting increasingly blurred.

Once seen as a threat, carriers are now focused on learning from the success of OTT.

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This is a trend that is intensifying and, as some figures seem to indicate, it may already be paying off.

At Brazil's Telefónica subsidiary Vivo, more than 1bn reais (US$309mn) of first and second quarter revenues came from digital services and applications, growing at a double-digit pace year-on-year.

According to Christian Gebara, chief revenues officer at the carrier, more than 40mn of Vivo's customer base now consume at least one of its digital services, which comprises 80 services.

Telefónica Brasil launched on Monday yet another digital service during the Futurecom IT and telecom event in São Paulo.

In partnership with French media group Vivendi and French entertainment company Canal +, the operator unveiled what it claims to be the first set of studio-quality series that are tailor-made to cell phones. The series have episodes of up to 10 minutes with international cast and production.

The platform is available for postpaid clients at a small monthly fee while prepaid clients can access the service through a weekly fee.

"This has the power to become the 'Netflix' of cell phones," said Vivo CEO Amos Genish at the announcement.

Named Studio+, the app will be launched first in Latin America and then in the European and US markets.

Telefónica will next week take the app to Argentina through its Movistar unit, and then continue with launches via the Movistar units in Chile, Peru, Colombia and Uruguay.

Vivendi and Canal + have a three-year exclusivity agreement with Telefónica.

The initiative is not an isolated move. Telefónica has openly stated that its objective is to become a "digital telco", moving away from the old stigmas that telcos had of being a "dumb pipe". During a keynote on Tuesday, Genish said that Vivo will soon launch game streaming and new financial services, among others, to its digital portfolio.


During Futurecom, Brazil's Oi also launched a smart home appliance kit that, while it is not essentially a digital entertainment service, it shows how carriers are thinking outside the box. 

The IoT platform allows for remote monitoring, via Wi-Fi networks, of homes and small enterprises, and can be managed from tablets or smartphones. 

The launch follows others recently made by Oi. The carrier launched in August the platform Oi Livre, a customer service app aimed at mobile prepaid clients. The launches also included new features on the Oi Mais Empresas app, which is focused on the corporate segment.

Oi's director of strategy and business transformation, Maurício Vergani, said at the launch that the carrier aims to raise the contribution from its digital channels in the sales of plans and services to 20% from 4%.


TIM, which earlier in October announced a content partnership with Netflix, had on big data and IoT its main bet to be "more than just a telco".

At a Futurecom press conference, Luis Minoru, head of strategy and innovation at TIM Brasil, said the company process 6bn daily operations of clients, which offers a strong potential to extract value and insights.

The strategy is in line with TIM's plans to double the number of cities covered with LTE in 2017 to 2,000, making use of the 700MHz spectrum bands where possible and available, and reach 98% of the population covered.

Minoru also said the operator would be intensifying partnerships with digital innovation and startups communities, similar to its recent support of the Cubo coworking space in São Paulo.