African Journal of Science, Technology, Innovation and

Development

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Battle for digital customer ownership between the

Telcos and Over-the-Top (OTT) players: Emerging
markets perspective

Adeolu Dairo & Krisztián Szűcs

To cite this article: Adeolu Dairo & Krisztián Szűcs (2022) Battle for digital customer
ownership between the Telcos and Over-the-Top (OTT) players: Emerging markets perspective,
African Journal of Science, Technology, Innovation and Development, 14:2, 556-563, DOI:
10.1080/20421338.2020.1866147

To link to this article: https://doi.org/10.1080/20421338.2020.1866147

Published online: 03 Feb 2021.

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African Journal of Science, Technology, Innovation and Development, 2022
Vol. 14, No. 2, 556–563, https://doi.org/10.1080/20421338.2020.1866147
© 2021 African Journal of Science, Technology, Innovation and Development

Battle for digital customer ownership between the Telcos and Over-the-Top (OTT) players:
Emerging markets perspective
Adeolu Dairo * and Krisztián Szűcs

Faculty of Business and Economics, University of Pecs, Pecs, Hungary

*Corresponding author email: [email protected]

Today’s Telcos are confronted with digital evolution and innovation that are forcing them to rethink their traditional
business models. In many domains, the global Over-the-Top (OTT) players have established scales across their
business models, thereby putting enormous pressure on the Telcos. This paper proposes a framework for the major
stakeholders within the Telco space to manage the excesses and threats that are posed by the global OTT players upon
the industry. Using a deep packet inspection (DPI) through the service control gateway (SCG) of an emerging mobile
operator, the study quantifies the significance of the threat and the penetration of the OTT providers within the Telco
landscape. From an emerging market perspective, a comprehensive framework that can protect Telco investments and
the host economies from the global OTT players is provided.

Keywords: telecommunication, OTT player, digital consumer, mobile services, regulatory body

Introduction OTT players such as Skype, WhatsApp, and Snapchat

Who owns the digital mobile customers? Could it be the have taken a position within the digital communication
licensed telecommunication service providers (Telcos) space that raises many questions as to the status of the
that have invested in telecommunication infrastructure Telco in the digital customer ownership of mobile custo-
and various network elements or the Over-the-Top mers. OTT players have already changed the dynamic of
(OTT) players that distribute video content over a the core business of the Telco, which is voice, data, and
public network? OTT players such as WhatsApp, text messages (Stork, Esselaar, and Chair 2017). The tele-
Skype, and Facebook own innovative applications and communication industry is witnessing a shift from con-
platforms that dominate and drive the engagement of nectivity to content, which is driven by OTT players.
digital mobile customers (Nator 2019; Tura, Kutvonen, Device evolution, coupled with the consumer growing
and Ritala 2018). appetite of OTT content consumption, is driving the
This study is in two parts. First, a strategic framework growing pressure for telecommunication network expan-
is proposed along with a way forward for Telcos and sion (Park 2017). Also, demand for improved customer
industry regulators on how to manage the threat of OTT experience by digital consumers, tight regulatory environ-
players to protect the value and stakeholders of the tele- ment, and digital disruption due to the complex ecosystem
communication industry. Second is an exploration of the are critical shifts in the industry landscape. Moreover, cost
activities of the OTT players within a typical telecommu- control and operational efficiency on the part of the Telcos
nication network environment in an emerging market. To have characterized the industry whose value chain is
understand the relationship between the consumers’ be- increasingly fragmented due to the innovation and
haviour and the OTT services, this study carries out a digital evolution that is driven by the global OTT
deep packet inspection (DPI) analysis that reveals the sig- players (Deloitte 2018; Dwyer et al. 2018; Kim, Nam,
nificance of threat that is posed by the OTT activities and Ryu 2019).
within the Telco space in emerging economies if not This paper assesses the potential risk that OTT
well regulated. players pose on the survival of the telecommunication
As the digital evolution and increasing connectivity industry by exploring the OTT activities within the
continue to drive the number of connected devices and Telco ecosystem. In exploring this battle between the
terminals, Markets and Markets (2020) projected the Telcos and OTT players within the telecommunication
global OTT service market value at $156.9 billion by space, this study also examines the activities of digital
2024 from $81.60 billion in 2019. Also, the role of mobile customers on their connected mobile devices.
mobile devices continues to extend beyond communi- In doing so, the entire digital protocol service of a cel-
cation and impact every facet of consumer lifestyle (Var- lular provider in an emerging mobile market is explored
adarajan 2018). While over half of the world population to quantify and analyze the digital behaviour of mobile
as of today do not own a mobile phone, the number of customers to OTT applications. This study reveals the
connected devices and terminals is more than the world enormous danger that is posed by OTT players to the
population (Sinha 2018). Beyond the mobile phones and stakeholders of the industry for the under-regulation
connected smart devices, there is a rapid expansion in that characterized their activities in emerging econom-
connected wearables, automobiles, home appliances, ies. While these dangers are imminent, for many
and many more. Therefore, Telco’s position as an infra- mobile consumers, OTT content is the main reason
structure and network provider is no longer sustainable why they are connected (Stork, Esselaar, and Chair
(Sujata et al. 2015; Winseck 2017). 2017).

African Journal of Science, Technology, Innovation and Development is co-published by NISC Pty (Ltd) and Informa Limited (trading as Taylor & Francis Group)
 African Journal of Science, Technology, Innovation and Development 557

Conceptual background networks such as interconnection and termination are

OTT players cut across messaging, voice, digital media, well regulated across the markets, OTT activities and
and cloud services (Jin 2017). WhatsApp and WeChat other digital players should also be well regulated consid-
are examples of key players in the instant messaging ering their recent growth within the last decade (CIPESA
segment. In the voice segment, Skype, WhatsApp, and 2018; Deloitte 2018).
Viber are known brands. However, within the digital The pressure the OTT players put on the telecommu-
media space, Facebook and YouTube are key players, nication industry is coming from different areas. Right
while Google and OneDrive are examples of OTT in the from how the OTT applications and their associated tech-
cloud segment. Also, the live streaming segment is nology are delivered (Heeks and Stanforth 2015; Winseck
becoming very significant with rapid potential within 2017). Telcos need to continue to invest in network infra-
OTT services (Fitzgerald 2019; Hu, Zhang, and Wang structure to provide satisfactory customer experience to
2017; Ramachandran 2016). The authenticity and open- mobile customers. How long can the Telcos survive con-
ness that characterize the live streaming user-generated tinuous network expansion towards the delivery of an
and professional content make it consumer engaging. acceptable level of mobile experience due to the OTT
YouTube and Facebook are leaders in this segment. On technology delivery and innovation without a correspond-
all these frontiers, OTT encroaches the Telco core func- ing growth in Telcos’ bottom line? Therefore, Telcos must
tions and thereby, threatening the industry’s survival find a strategy to monetize these capital expenditures
(Eberhard and Heuermann 2019). (CAPEX) investments and diversify their business very
quickly before they become a connectivity pipe of com-
OTT players put pressure on Telcos moditized infrastructure.
In the developed telecommunication markets, where Recent studies have stressed the need for more
smartphone penetration is over 90%, the impact of the research despite researchers growing interest in OTT ser-
OTT players on Telco’s voice revenue is marginal vices (Green, Cluley, and Gasparin 2020; Hiller 2017;
(GSMA 2018). One of the reasons for this is because Kim et al. 2017). Many studies seem to have focused on
the data revenue may compensate for the declining the platform’s nature of the OTT services concerning
voice traffic due to the Voice-over-IP (VoIP) calls from their impact on various areas within the digital space.
OTT players. However, this is not the case in emerging Also, case studies, business strategies, and modelling
mobile markets, where smartphone penetration is about techniques have been suggested to unravel the OTT struc-
40% (GSMA 2018). The increase in data revenue due to tures and their associated services (Hiller 2017). Different
increasing consumption of digital content is yet to com- services of the OTT players and their strategies have been
pensate for the declining voice revenue, which still studies (Sanson and Steirere 2019; Wayne 2018). More-
accounts for about 65% of the Telco’s revenue in these over, local, and global OTT players have been studies to
markets (Stork, Esselaar, and Chair 2017). understand the dynamics of competition among their ser-
Nearly a decade ago, SMS (short message service) vices (Dwyer et al. 2018; Kim et al. 2017). However, the
revenue was a considerable component of the revenue support that the global OTT players receive from their
line items of the mobile service providers. That revenue countries, especially the United States, with regards to
line is no more in their books due to the proliferation of their global market power and activities hurts Telcos in
OTT applications within the digital space. Currently, the emerging economies. This impact on incumbent players
voice revenue is under enormous threat due to the Voice within the Telco ecosystem has been described as a ven-
over Internet Protocol (VoIP) capability of the OTT geance return of media imperialism (Fitzgerald 2019).
players such as WhatsApp calls. Telco revenue and
network infrastructure are under pressure as the next gen- Regulation
eration OTT players are globally building scales along Many of the OTT players are multinational firms that
with their sophisticated business models. These models operate across the world without a physical presence in
are not only a threat to the Telco but other stakeholders the countries where they generate millions of dollars in
within the Telco’s space (Buzdar, Janjua, and Khurshid digital advertising revenue. For example, Twitter, Face-
2016). book, and Google do not need clearance from ports or
According to Regina (2017), allowing OTT players to borders of any country where they have users, and they
operate freely on Telco’s similar services within the generate revenue across the world. However, the industry
Telco’s infrastructure while imposing strict regulations regulators in many countries have started to realize that
on telecommunication providers in many markets raises OTT players need to compensate for the declining value
questions as to the understanding of regulators on the their OTT activities pose to the Telcos, especially in the
magnitude of OTT threat. Hence, the introduction of a developing economies (Buzdar, Janjua, and Khurshid
traffic conveyance levies was suggested at the wholesale 2016; CIPESA 2018; Regina 2017). The digital evolution,
level (Kearney 2010). However, few studies have along with its associated technologies, is moving faster
argued in favour of the OTT, along with their investment than the regulators and their regulations in most of the
and infrastructure. Also, the discussion on a need for regu- emerging mobile markets (Richard 2013). For example,
lated Internet Protocol (IP) interconnection that will the tax regime for UK and France for digital enterprise
connect OTT players and the Telco persists (Lee, Choi, are expected to take effect anytime soon (European Com-
and Kim 2019; Regina 2017). Some studies have argued mission 2015). On the digital advertising transactions,
that while the activities of the mobile operators across taxes and levies are being introduced by countries like
558 Dairo and Szűcs

Italy and Hungary. Pending a robust and easy to Telco redefinition of business model
implement framework, the European Union (EU) propo- OTT services have indeed helped in the dramatic uptake
sal of a 3% tax on digital advertising is already on the of internet services in emerging economies. Their emer-
table for discussion (Cafaggi 2014; European Commis- gence has also helped the local business to efficiently
sion 2015). operate their businesses (Buzdar, Janjua, and Khurshid
However, in solving the regulatory challenges of OTT 2016; Winseck 2017). Moreover, Telco has also benefited
players, the creator of the value and where value resides in from the evolution of OTT services. Additionally, some
the OTT entire digital space need to be defined. In emer- strong OTT players such as Facebook and Google are
ging markets, some countries recently adjusted their tax even playing in the infrastructure ecosystem. This, too,
acts and policies to capture fast-changing technologies is posing so much threat to the future of the telecommuni-
and emerging business models. For example, Nigeria cation industry (Schmitz, Stummer, and Gerke 2019). If a
recently changed its Finance Act to capture OTT considerable number of mobile customers are carrying
players and digital-related activities of the likes of Face- mobile phones because of the OTT services, when OTT
book, WhatsApp, and YouTube (Markets and Markets players become core infrastructure providers, what own-
2020; Park 2017). However, a framework that will ership can mobile operators claim concerning mobile
enable the implementation of the Act is still a big chal- customers?
lenge. Some countries have a different approach to the Over 80% of recent transatlantic cable investments are
monetization of the activities of OTT players. For driven by Facebook and google (Cunningham and Craig
example, in 2018, Uganda, Zambia and Benin abandoned 2016). What is now left for the global players behind
their move on new taxes on OTT users after a wide the OTT services to run a telecommunication service suc-
protest. Rather than for these regulators to define a way cessfully would be the core network elements. Even the
of receiving levies from the global OTT players, they core network elements are already at their disposal as
attempted to pass the taxes to the consumers because they have already integrated so many technologies such
the OTT players are not physically present in these as a software-defined network (SDN) with the operators’
countries. The regulatory argument was that Telco core telecommunication equipment (Cunningham and
needed to be protected from the competition of foreign Craig 2016; Vonderau 2016). Clearly, Telcos need to
OTT players (Farooq and Raju 2019; Yeboah-Asiamah, fast track the redefinition of their digital entity within
Narteh, and Mahmoud 2018). the digital marketplace for them to continue to claim
In Uganda, a tax of 200 Shillings (0.53 USD) was their share of mobile customer ownership. The next
introduced in 2018 directly to any consumer that section discusses the framework for the management of
wishes to use any of the identified 58 OTT applications the activities of the OTT players within the Telco
on a day (CIPESA 2018). This did not only reduce the ecosystem.
data revenue of the mobile operators, but the number
of consumers that were connected to the internet also Telco protection from OTT – a framework
dropped drastically (Regina 2017). It was evident that In addressing the OTT threats while protecting the
transferring the taxes and levies that are due to the reg- Telco’s stakeholder value, several strategies have been
ulators from the global OTT players to consumers is adopted across different markets (Buzdar, Janjua, and
not the right way to go. OTT applications to most Khurshid 2016; Farooq and Raju 2019; Sujata et al.
digital consumers in emerging markets are beyond chat- 2015; Trabucchi, Buganza, and Pellizzoni 2017). This
ting with friends; it has become critical platforms for paper classifies these strategies into two – offensive
information, communication, and engagement in emer- and defensive (see Figure 1). Offensive strategy for
ging markets. Millions of the consumers in these the management of OTT activities call for Telco to
markets rely on these applications and platforms for put on their innovative caps. For Telcos to monetize
their businesses, local information, news, and help in OTT activities and address the OTT value erosion ten-
times of emergencies. For many of them, Facebook, dencies, innovation is required on the part of the tele-
WhatsApp, and others are what they recognize as the communication service providers. Telco must explore
internet (Regina 2017; Yeboah-Asiamah, Narteh, and innovation in the delivery of their products and services
Mahmoud 2018). to either leverage OTT services or compete with OTT
Another example is the Zambian government that providers.
imposed a daily fee of 30 ngwee ($0.03) on all Voice The defensive strategy against the OTT threats is
over Internet Protocol (VoIP) calls (CIPESA 2018). Not- classified into three segments. They are regulation invol-
withstanding the protest from all civil societies and every- vement, Telco cooperation, and OTT partnership.
one across the country, the government refused to reverse
the tax regime. The regulator argued that the regime Regulatory involvement
would increase government revenue, sustain telecommu- As already seen in some markets, the regulatory interven-
nication capital investment of network infrastructure, tion can assist the Telco to manage the effect of OTT pro-
and keep jobs within the Telco ecosystem. This view is viders, particularly given Telco’s critical and sectorial
widely considered in the continent on foreign-owned contribution to the economy (Richard 2013; Sampath
OTT platforms, which have already captured the market 2014.). Regulators have more than enough reasons to
and gradually disrupting the Telco business models regulate OTT players and their activities within the
(Park 2017). markets. In the area of trade, OTT players trade with
 African Journal of Science, Technology, Innovation and Development 559

Figure 1: OTT threat management framework overview.

global players rather than the local entities. Their actions players. Also, in the past, we have seen OTT players
may lower government and regulatory revenue due to the being blocked when offering voice services. An
reduction of income from Telco. Also, the lack of a tax example is the UAE, where voice protocols of WhatsApp
framework that can generate revenue from global OTT and other VoIP services have been blocked, leaving then
players, which can compensate for OTT impact on with only the chat protocol (Cafaggi 2014; European
Telco revenue, is non-existence. In the area of local Commission 2015).
content, it is difficult for traditional and local companies
to compete with global OTT players (Cafaggi 2014; Euro-
pean Commission 2015). Telco cooperation and OTT partnership
Moreover, global OTT players have lower costs of Cooperation between the telecommunication service pro-
content storage, hosting, and better negotiation of viders within the same market can also pose an effective
content deals (Waters, Kuchler, and Shannon 2018). strategy in defending their core operations by jointly
On the security and privacy threats, it is challenging defining and implementing terms of activities with OTT
for regulators to monitor the collection of private infor- providers (Sujata et al. 2015). Operators within the
mation for commercial gain by OTT for targeted adver- same market can come together and take a decisive pos-
tisement (Richard 2013; Waters, Kuchler, and Shannon ition on OTT players and seek regulatory buy-in for
2018). Little or no visibility exists on the part of regula- implementation. This option seems imperative in a
tors on safety controls or standards for applications that market where regulatory action is prolonged (Ritala and
could pose a potential threat to hardware or networks Sainio 2014; Varadarajan 2018).
within their countries. Besides, location-based apps Lastly, Telco can partner and collaborate with major
could increase financial and physical crimes while mal- OTT players for effective management of the threats
icious software may use OTT applications as a pipe to from the OTT services. This partnership can help the
harm critical infrastructure (Waters, Kuchler, and mobile service providers to generate extra revenue not
Shannon 2018). only from data services but other alternative revenue
An example of where regulations have been used in streams (e.g. service subscription and mobile advertising)
this way is Indonesia. In 2016, the Indonesian government (Sinha 2018). For the Telco, this option can protect their
released a law requiring foreign OTT players to acquire traditional service revenue, thereby creating a win-win
operating licenses in the country (Kim et al. 2017). situation. While a single or hybrid approach of this pro-
They were also required to register as a local entity with posed framework can be deployed, market characteristics
sole ownership or established a joint venture with local and the peculiarity of an individual market must drive the
partners. This move was aimed at protecting the Telco adopted strategy of combating the OTT threats (Farooq
as well as encouraging the development of local OTT and Raju 2019).
560 Dairo and Szűcs

Digital customer – OTT consumption behaviour types, time on the network and data usage of the entire
In a bid to demonstrate the significance of the OTT customer base. These are smartphone users who have
players within the Telco and digital landscape, and how been on the network for at least 12 months with consistent
vital the OTT content and services are to the mobile con- data service subscriptions for the last six months before
sumers, this study explores the database of a mobile the exploration. Being on the network at least for 12
service provider in an emerging market. This service months is vital so that the mobile customer would have
control gateway (SCG) experiment through a deep downloaded or installed and used any OTT application
packet inspection (DPI) is to determine the following: or service of their choice within the period. For this
sample, the study inspects all their data consumption
. Quantify the OTT providers that exist on a typical tele-
usage along with all the possible data protocols on the
communication network along with their activities by
network. All the data activities on the network are classi-
using a mobile network with millions of customer
fied into 21 different protocols. The implication of this is
base as a case.
.
that whatever data consumption activities a mobile consu-
Access the top OTT players’ activities across the
mer carries out on the network will fall under one of these
primary services of the Telco – data and voice services.
21 categories. The consumption of the 1000 sample cus-
. Understand the consumer–OTT behaviour along with
tomers is ranked along with their total data usage (see
the major protocols such as streaming, web browsing,
Table 3).
social networks, and among others.
In Table 4, the study considered the top classified pro-
tocols and tried to understand OTT activities that drove
Methodology the traffic and the behaviour of these digital mobile
This study considers a telecommunication service provi- consumers.
der within an emerging mobile market as a case. The
service provider has millions of mobile customers with
the general characteristics of smartphone penetration Results and analysis
across emerging markets that vary within the neighbour- The analysis of the OTT services on the network of the
hood of 50% (GSMA 2018). Through a deep packet mobile service provider reveals the consumption pattern
inspection, all the OTT service protocols on the mobile of the OTT services. It also reveals insights into the
network are identified. The top 20 OTT players are OTT contribution to key network metrics of the Telcos.
ranked along with their contribution to the total data con- Over 121 unique OTT players were seen with traffic on
sumption of the OTT services across the network within a the network within the 14 days. This means that at least
period of 14 days (Table 1). Second, analysis of the top 20 one customer from the entire customer base drives voice
OTT players across the network is presented. This is pre- or data traffic on any of the 121 OTT services within 14
sented in Table 2 along with the Voice over the Internet days. VoIP as the total traffic contributed 7% to the
Protocol (VoIP) traffic usage contribution of individual overall voice traffic of the operator in two weeks. What-
OTT player to the total VoIP traffic on the network sApp added 62.8% to the total VoIP traffic, while Skype
within the same 14 days period. and True Caller application followed with 13.8% and
To understand the digital mobile consumer behaviour 6.9%, respectively (see Table 2). On the data flux con-
with OTT services, a random selection of 1000 customers sumption by the OTT services, WhatsApp remains the
from the customer base of the case network is carried out. number one OTT service, with 41.6% of the total data
The selection cuts across customer value segments, device traffic on the network. Skype was displaced by a more

Table 1: Top 20 OTT players by data flux.

OTT Player % Contribution to total OTT data flux

WhatsApp 41.6%
IMO 12.8%
Skype 9.6%
Facebook Messenger 8.1%
FaceTime 7.3%
VoIP data 5.4%
WeiXin 3.5%
Viber 3.0%
Telegram 2.9%
Hangouts 1.1%
Tango 1.0%
QQ 1.0%
Line 0.6%
YY 0.4%
BetaMax 0.2%
ICQ 0.2%
SIP 0.2%
Vonage 0.1%
Yahoo Messenger 0.1%
MyChat 0.05%
 African Journal of Science, Technology, Innovation and Development 561

Table 2: Top 20 OTT players by VoIP (voice) traffic.

OTT player % Contribution to total VoIP (voice) traffic

WhatsApp 62.8%
Skype 13.8%
True Caller 6.9%
IMO 3.4%
Telegram 3.0%
VoIP Data 2.0%
Line 2.0%
Viber 1.7%
FaceTime 1.6%
ICQ 1.1%
SIP 0.8%
Vonage 0.7%
Tango 0.6%
BetaMax 0.4%
QQ 0.2%
WeiXin 0.2%
True phone 0.2%
Zello 0.1%
Nimbuss 0.1%
Yahoo Messenger 0.03%

Table 3: Protocol classification with data flux usage (N = 1000).

Protocol classification Data flux (GB) Data flux (%)

Web browsing 1317.60 48.80%
Embedded video 326.70 12.10%
Streaming 291.60 10.80%
Social networking 159.30 5.90%
VoIP 82.35 3.05%
Email 70.20 2.60%
File sharing 70.10 2.60%
Software updates 76.50 2.50%
Tunneling 56.70 2.10%
AppStore 54.00 2.00%
Torrent download 48.60 1.80%
Net storage 40.50 1.50%
Instant messaging 40.50 1.50%
Wireless 29.70 1.10%
Torrent video 24.30 0.90%
Net admin 16.20 0.60%
Gaming 2.70 0.10%
E-commerce 1.35 0.05%
VPN 0.00 0.00%
Database 0.00 0.00%
Stock 0.00 0.00%

data-driven OTT application, which is commonly referred contributes to 12.1%. However, when the classified proto-
to as IMO (Table 1). cols were simplified to see exactly the events of the cus-
Also, looking at the data behaviour of the 1000 tomers further, the top OTT players still featured in web
samples of the digital customers in Table 3, web browsing browsing and across the top protocol classifications
activities account for 48.8%, while embedded video (Table 4). Facebook activities, for example, cut across

Table 4: Top 5 Protocol classification and embedded top five traffic-driven OTT protocols (N = 1000).

Data traffic
distribution
Protocols (round-up to 100%) Top 5 traffic-driven protocols
Web browsing 60.5% Https – 15%; Google – 14%; Facebook – 13%; YouTube – 10%; Operamini – 3%;
Streaming 15.0% YouTube – 50%; Facebook – 26%; X-videos – 7%; Https – 4%;
Social network 13.4% Facebook – 58%; Instagram – 28%; Twitter – 8%; Snapchat – 4%; LinkedIn – 1%
Instant 7.0% Facebook – 88%; Facebook – 3%; Viber – 2%; Google Hangout – 2%; Badoo – 1%;
messaging Facebook Messenger – 1%
VoIP 3.8% WhatsApp – 60%; Skype – 9%; True Caller – 7%; IMO – 5%; Facebook – 4%;
562 Dairo and Szűcs

web browsing, streaming, social network, instant messa- Through a robust data packet inspection analysis, activi-
ging, and even VoIP. Also, for YouTube, it can be seen ties of the OTT services on a typical mobile network
both in web browsing and streaming. YouTube and Face- environment are explored, which quantified and generated
book dominate the embedded video protocol, which is insights into the OTT activities on a typical network.
omitted in Table 4 to accommodate instant messaging. The proposed framework provides the governments
The mobile consumer behaviour and usage consumption with a directional focus that regulators cannot continue
of the OTT services reveal the reason, while in some to impose digital taxes and levies on consumers in order
emerging markets, many customers perceive WhatsApp to monetize the activities of the global OTT players in
and Facebook to be the internet (Regina 2017; Yeboah- their economies. Regulators need to study the digital eco-
Asiamah, Narteh, and Mahmoud 2018). This is because system and develop a robust and implementable frame-
there are no other activities upon which they leverage work that will enable OTT players to remit the
internet connectivity than to use the global OTT services. necessary taxes on digital advertising revenue they
make within their regulatory geographical boundaries.
Managerial lessons While it is inevitable that some customer behavioural
As digital traffic continues to grow, Telco will continue to change due to OTT activities could hurt the Telcos,
be under immense pressure to increase capacity to meet public policy should respond to the OTT threats with a
the customer data appetite, demand, and growth in custo- view of protecting the investments of stakeholders. On
mer experience expectation (Sinha 2018). How Telco the part of the Telco, they cannot afford to wait for the reg-
managers can monetize the threats that are posed by the ulators. As shown in the deep packet inspection (DPI)
global OTT players and deliver an acceptable level of ser- analysis of the OTT activities and consumer behaviour,
vices to their digital customers is one of the questions this these aspects of the mobile consumption behaviour
study tries to answer. OTT services are here to stay, and cannot be neglected by the Telcos. They need to be
Telco should expect to see more of them latching and more innovative. In emerging markets, for example,
gaining traffic share on the network as digital technology some of the Telcos’ brands have operations across many
and innovation continue to rise. However, the growth of markets. What stops such operators from having their
these OTT services presents significant opportunities to own OTT services that will compete favourably with the
the Telco. While some of the recommendations in this like of WhatsApp? After all, these brands can quickly
study would require the regulatory buy-in for implemen- drive adoption with enhanced features by giving incen-
tation by the Telcos, there are quick-win scenarios for the tives for download through their other traditional services.
Telcos. For example, the offensive strategy of being inno- While this study opens a lot of opportunities for future
vative to compete with OTT players is an option. Nobody research, it provides insights for policymakers to have a
knows the mobile customers than Telcos. Telcos can also second look at the impact of the global OTT players on
leverage their traditional services to drive the adoption of their economies.
an application on their network. The pressure on the Telco for infrastructure expansion
Also, Telco must take the responsibility of educating because of increased traffic should be monetized and not
the stakeholders such as regulators and tax authorities allow only global OTT players to benefit from this capital
on framework and approach to tackle the threats of the expenditure on network expansion. As digital technology
global OTT. Telcos cannot leave this to their governments and innovation continue to evolve, new services will
and regulators because their method, as we have seen, is emerge, which will continue to disrupt the Telco business
simple – and that is to put the burden of taxation on the models. To survive this challenge, Telcos cannot be stag-
consumer, which will have a serious implication for the nant from the point of innovation and structure. They need
Telcos. Pending the arrival of a robust framework that to look beyond and begin to form groups and partnerships
will be favourable to all the stakeholders in any market, so that they do not end up as a mere connectivity pipe of
the option of the partnership should be carefully explored commoditized infrastructure.
by the Telco managers. While the singular objective of
collaboration on the part of global OTT would be the Acknowledgments
growth of service adoption, which will later translate The authors wish to thank the University of Pecs under the
into digital advertising revenue, Telco’s aim should be Higher Education Institution Excellence Program of the Minis-
try of Innovation and Technology in Hungary within the frame-
the monetization of the OTT adoption and activities on work of the 4th Thematic Program – ‘Enhancing the Role of
their networks. Domestic Companies in the Re-industrialization of Hungary.’

Conclusion Disclosure statement

This paper presents an extensive examination of the OTT No potential conflict of interest was reported by the
players and their services along with mobile service pro- authors.
viders’ businesses within the entire Telco ecosystem. The
roles of critical stakeholders in the ecosystem are con- ORCID iD
sidered, and the study presents a framework that captures Adeolu Dairo http://orcid.org/0000-0003-4350-1115
how the threats that are posed by the global OTT players
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