Internet today is the highway and OTTs are the highway stars. Well this statement would not be changing soon unless there is a third digital revolution (Internet of things et al) which will trigger a change so radical that the OTTs would no longer be the highway stars themselves.
Till then, the battle continues...
ISP currently are focussing on getting faster speeds, better quality and with obvious business motive, gain larger customer base. But as the economies of scales is not typically working for the ISPs as the ARPU is consistenly diminishing, the input costs increasing (Spectrum cost, infrastructure cost on the rise) the top line and bottom line are suffering.
To top up, the not so recent entrants like Cheaper Smart devices, Obligation to provide Cheaper Internet and the OTTs have further dented the ISPs.
It would not be incorrect to say that today, the ISPs are nothing but internet pipes, unless they react and react quickly.
The following directives could be adapted
1. Maintain Internet Neutrality. Internet is built on fundamentals which wanted it to be open and impartial to everyone. Impartial to any traffic. The ISPs should respect this and work towards maintaining this.
2. While Internet Neutrality is important, adaptive and intelligent Quality of Service is key. Customer Experience is the key, its no more network performance, its no more service experience, but its all about customer experience now. While the ISP can maintain a basic QoS for the 70% of the subsribers which denote the Mass which are more price sensitive than quality sensitive, the key is to focus on the remaining 30% which can drive the revenues.
For these 30%, which i call the nagging bunch, Internet quality and experience is the key.
ISPs should implement a premium service for them where not only the customer chooses the throtlling of speed and quality, the network itselfs adapts the customer and "adapts" to his/her needs. For example, a premium should see the usage pattern of the subsriber, and provide him maximum speed and quality for Microsoft Outlook at 9am where he/she checks the emails, quicky reprioritize the quality of service for Linkedin at 14:00 when the subscriber is seeking new jobs, throttle Facebook for maximum performace at 19:00 where subscriber is checkin out their social network and throttle Skype to max when the speak to their dear ones in the night, making overseas calls to the US. The throttle then adapts to give youtube the maximum quality for the weekends.
The concept of subscriber tagging QoS is not new but far from being practically implemented.
3. Take a slice of the pie.
OTTs generate their revenues through advertisements. These adverts generate a lot of data. ISPs should build revenues sharing models with the OTTs based on the traffic generated by the advertisements. for example it Facebook advert data riding on Airtel Mobile broadband could be used by Airtel to charge back facebook. This would hence be fare. Remember you may not need to pay toll for the autobahn but you need to pay for the billboards on the highway.
4. Move up the value chain
ISPs need to move up the value chain, They should be customer destination rather than a transit path for the consumer. ISPs need to come up with newer, more attractive services. ISPs can choose to povide newer disruptive services to counter the OTTs. One quick win could be provide Free HD VOIP voice services within or cross operator (VoLTE) seamlessly without a need of an APP like whatsapp/Skype to help retain the customer data within the network.
While, ISPs cannot create a parallel Facebook, but they need to think of more disruptive services to keep the interest of the customer.
I feel in the not so distant future, the distinction between ISP and OTT will diminish further, the hunter would become the hunted which takes me to the next point about internet of things
5. Internet of Things (IoT) to Internet of Everything (IoE) will shape our future. The revolution is already started in many small pockets and quicky becoming the Megatrend. The ISPs should see this a great oppurtunity to fight back and use this to generate more revenue streams. Invest in Home automation, for example, Airtel can spawn a new automation company which uses global IoT/IoE standards to create Home automation systems (modular buses) which will plug into the preffered Airtel Broadband to connect the subcriber's homes to the internet. The time is now and there is no space to be laggards in this field
ISPs can invenst in smarter transportation systems, Intelligent traffic routing, Intelligent cars, the opputunity is their, some needs to grab it.
6. Invest
Lastly, ISPs should aim to invest in OTTs, if possible aquire atleast the new budding services if not the giants them to safeguard thier near future revenue.