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Monday, May 8, 2017

MyTechieGuy Question Of The Day - What is OTT and why is it a big deal?

I decided to start "MyTechieGuy Question Of The Day" series mainly because of one thing, and that is:-

“We Learn . . .
10% of what we read
20% of what we hear
30% of what we see
50% of what we see and hear
70% of what we discuss
80% of what we experience
95% of what we teach others.”

Because of the above, i get to hear, read, discuss and sometimes teach so i can fully benefit from this learning process.

Today's hot word is OTT and its significance in the world of telecommunications.

Telecommunications engineers love to use acronyms and if you are part of the telecom industry you will realize that there are millions of acronyms and many more new ones coming out each day as technology evolves.

The first time i heard about the word OTT was used with another word APP to form a sentence OTT app(Yes "APP" has now become a dictionary word to mean "application").

app an application, especially as downloaded by a user to a mobile device.

OTT - simply stands for "Over The Top"

An OTT app is simply a multimedia(Voice, Video, audio, images, text, animations and interactive content) application on your mobile device or PC and surely you interact with OTT apps everyday. 
Examples of OTT apps include; Skype, Viber, WhatsApp, YouTube, FaceTime ... i could go on and on, the list is endless.

So, now that we know that OTT app is simply a multimedia app on your phone, the big question is; "why the name OTT?" and "why is it a big deal?"

Well if you ask me, the name OTT is biased because it was defined from the telecom operator perspective and here is the reason as to why?

Traditionally, multimedia services were provided by the telecom operators a.k.a service providers as value added services, you will recall MMS(Multimedia Messaging Services), the legacy voice and SMS. But with the evolution of telecommunications technology(2G, 3G, and now 4G), the legacy multimedia services have been replaced with the OTT apps and this has caused a major financial concern to the telecommunications operators hence the name "Over The Top".

The telecommunication operators own the actual physical infrastructure over which these new multimedia services apps are delivered. In the past telecom operators used to earn big from multimedia services and it was fair enough because they own the infrastructure but now all this revenue has since shifted to the OTT apps providers and that's how they got their name "Over The Top!!"

In summary OTT App is a multimedia app that is not provided by your telecom service provider, but by a third party company.
So from the telecom provider's perspective, the OTT services are delivered over their physical infrastructure and this reduces their role to a mere pipe or conduit for delivering these services without any control on revenue. 
Over The Top Services Platforms
In a research conducted by IDATE DigiWorld in 2013, it's estimated that the OTT services market will overtake the Telco services market by the year 2021. In other words the OTT service provider giants (Google, Facebook, Apple, Amazon etc) will overtake the Telcos giants like AT&T, Verizon in terms of turnover.

OTT Markets Forecast
Credits: LTE Magazine
Telecom providers have now found a way to leverage on the OTT storm instead of sitting back and crying foul.

So instead of being mere pipes and conduits, they have added components in their network to make it more content aware and to be able to offer differentiated services.

You will realize that on top of some telcos launching their own versions of OTT apps to compete with the OTT giants, they have gone ahead to create data plans and tariffs that are content based for example; Social media data bundles and plans/tariffs(WhatsApp, Facebook, Twitter), Video data bundles and plans/tariffs(YouTube, Netflix), and much more billing and marketing innovation is now centered around multimedia data services.

Telecom providers have been able to achieve this with the help of powerful DPI(Deep Packet Inspection) network tools integrated in their EPC(Evolved Packet Core) network solutions but i guess this will be a discussion for another time.

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The writer is a telecommunications professional and enthusiast
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