Bharti Airtel’s top executive has called for a change in the business model for direct-to-consumer OTT content players, saying that many of them will perish without modification – and without help from telcos.
Airtel CEO Gopal Vittal said during an industry event that business models need to keep pace and change.
“Most content companies use subscriptions and advertising to drive revenue. But the direct-to-customer model that the OTT industry works with is where the business model will have to change. Either many of these 40 platforms will perish, or they’ll allay. They have to break the problem of the distribution and monetisation challenges,” Vittal said, according to the Economic Times.
He added that OTT players will need to partner with telcos to address that distribution challenge. “We have 330 million users and can help solve the distribution problems.”
TRAI seeks level playing field for content delivery
During the same event, Telecom Regulatory Authority of India (TRAI) chairman PD Vaghela said there should be a level playing field for licensing across different content delivery technologies, including OTT platform applications.
He added that while OTTs currently do not require a license to operate, TRAI is undertaking research on the matter. “We’ll see (once the research is over) whether we want to issue a consultation paper and make recommendations to the government,” Vaghela said.
Currently, there are different regulations for different content delivery, be it cable, DTH or streaming applications.
The OTT ecosystem is behind the curve
Meanwhile, Vittal also said that 5G monetisation and resulting ARPU growth will only happen with tariff hikes, because apps that can make leverage the power of 5G still haven’t arrived, marking the first time the software, IT and content ecosystem hasn’t kept pace with the telecom industry.
“5G will take about 12-18 months to roll out. Customer expectations are rising daily, and we are remembered 1-1.5% of the time we fail. It will be a different game when 5G is completely rolled out. But it must be remembered that customers don’t need 5G for daily usage, and 4G is completely sufficient,” he said.
“This is why the only application is speed. If you have a supercomputer in your pocket and you’re just using Excel or a Word document, one doesn’t need it. Most of us don’t even know we’re on 5G if we’re just browsing or playing videos on the network. 4G is more than adequate for these functions. So the ecosystem needs to come together.”
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