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In the LTE Latin America 2015 event, it was clear that the telco/OTT partnership was one of the topics that generated a lot of interest among the participants. Viber, among others, is trying to build partnerships with operators across the region and operators are starting to open up to having conversations with OTT providers. Meanwhile, Google is moving towards innovative connectivity projects, showing how the convergence and competitive landscape is changing very quickly.

Innovation and new ideas are needed in the OTT/telco partnership arena

In the LTE Latin America 2015 event, the OTT/telco partnership was one of the main topics that generated interest among the attendees.

Viber, which presented itself at the event as the world’s second messaging application after WhatsApp, highlighted that its customers come mostly from Asia and developed countries, knowing that WhatsApp is, by far, the main communication application in the region. However, Viber does not position itself as a competitor to the operators; on the contrary, it is trying to build partnerships. It is evolving from a communication application to social media platform. Viber said that, at the moment, its main revenue comes from gaming and stickers. It mentioned that it had some deals with some Asian operators, mainly in cobranding, and wants to expand by finding new ways of working together with operators.

Another OTT provider, Truecaller, which helps to identify calls with Caller ID and blocks unwanted spam and scam calls, was also trying to make agreements in the region.

On the telco side, Claro commented that, while it is developing its own OTT services like Claro Video and Claro Musica, it is also interested in working with OTT providers. Considering that most of the Latin American market is prepaid and the population is mainly unbanked, Claro considers payments and authentication as the natural areas to start looking for partnerships. However, its proposition for the initial stage appeared to be “come and offer me a business,” simply expanding the current revenue-sharing agreements that it has with infotainment, horoscope, and other third parties, which, in our view, is a very limited outlook.

On the other hand, Google, which participated in the event from the audience, was very active asking about innovative infrastructure issues, particularly in innovative aerial radio networks such as launching an aerial wireless network using solar-powered drones. Google has already conducted trials in Latin America of Project Loon, the aerial wireless network that uses high-altitude balloons to provide Internet service to users in underserved and rural areas. In fact, the company has announced several initiatives in the connectivity area recently: It has made an investment backing O3b's medium-earth orbit satellites that aim to provide low-latency and low-cost Internet connectivity; it recently acquired Titan Aerospace, a company that develops ultra-lightweight, solar-powered drones; and has just announced Project Fi, a mobile service, which will use publicly available Wi-Fi and the mobile networks of T-Mobile and Sprint to offer best available wireless access to subscribers. All of these moves indicate Google’s interest in disrupting the connectivity market.

While Google’s plans to conquer the stratosphere to provide Internet may sound like a dream, it is a clear indication that connectivity is still the main concern. Operators and the challenging OTT providers must start to think “outside the box” with innovative ideas and be prepared to do business in ways that have never been seen before. Old methods for new services will not be enough.


Further reading

Telco–OTT Partnership Tracker: 4Q14, TE0003-000827 (February 2015)

OTT Communications Tracker: 4Q14, TE0003-000845 (March 2015)

“Video, music, and social media dominate telco–OTT partnership deals”, TE0003-000829 (February 2015)

Telco–OTT Partnership Series: Netflix and Pay-TV Operators, TE0003-000805 (October 2014)

Telco–OTT Partnership Series: Sprint and Spotify, TE0003-000785 (August 2014)

Music-bundle management, ME0002-000523 (July 2014)


Sonia Agnese, Senior Analyst, Latin America

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