Telcos and content providers should look to collaborate in a similar fashion to PC hardware and software vendors, in order to grow both business sectors, according to Huawei’s CTO for its fixed network business unit, Daniel Tang.
Speaking to delegates at Broadband World Forum in Amsterdam, Tang said that in 2012, popular shopping website Alibaba managed to pocket $3bn in sales during China’s ‘Singles Day’ – a holiday which saw the country’s 500 million internet users take advantage of sales and promotions online. Instead of the high street it was the country’s communications networks that bore the brunt of the strain and Tang said that in order for Alibaba to handle such significant demand, the shopping site collaborated with China’s telcos to ensure that the networks were up to the task.
Tang warned that both operators and content providers or OTT players face similar challenges in the future and telcos often want to invest in their networks but don’t generate enough profit to justify investment. Whereas content providers feel that the important services are provided over the top of the networks and need operators to invest in order to improve user experience.
“The PC model would have collapsed if it did not address similar concerns in the past, but instead the likes of Microsoft and Intel chose to collaborate. Microsoft was able to make better usage of CPU power and the hardware enabled growth in software and in turn software enabled growth in hardware.
“But there is not enough such collaboration between telcos and content providers; it is sporadic. The term “over the top” (OTT) means to bypass the network operator and customers streaming video services over networks don’t get high definition content. It may claim to be 1080p, but the sharpness is not there. So the ecosystem needs to collaborate to optimise the user experience, sharing revenue among content providers, consumer electronics manufacturers, and broadband providers,” he said.
“It’s not about who should be paying in this partnership, they should be creating value for the consumer so that the consumer pays for an improved user experience, and telcos and content providers can share those benefits together.”