Telecom Innovations – Services & Products
In most of advanced mobile markets, currently, telcos face a difficult dilemma: how to minimise the impact of OTT messaging apps. One of the possible strategies is a partnership with OTT messaging app providers with revenue sharing agreements for paid contents.
One of the key benefits of this strategy, that we called “sleeping with the enemy”, is that OTT providers already have a significant user base that can be tapped to cross-sell paid OTT content. These OTT providers are in fact already leveraging their customer bases and using them as a springboard to cross-sell other paid OTT content services. An example: LINE is selling stickers or emoticons to its users and earning revenues from its games. KakaoTalk also offers premium emoticons.
Some telcos are actively partnering with specific third-party OTT messaging app providers, banking on these partnerships to make sure they will monetise on the new app service through revenue sharing agreements. Telcos basically host these OTT messaging apps (e.g. through their own app store) and then revenues for app download or premium feature (e.g. stickers, emoticons, etc.) are shared between players.
KDDI, for instance, chose to allow both LINE and KakaoTalk own its app store (au Smart pass) and revenues streams (from paid content) are shared between the content providers and the mobile operator.