How much revenue does the world carrier share with content providers?

Carriers use VAS services to increase the time users spend on mobile devices and sell other services to customers.

Carriers need content services to increase revenue

With fierce competition from more and more OTT applications such as Messenger, VoIP and WhatsApp, as well as mobile applications and Internet-connected TVs, carriers cannot differentiate themselves on infrastructure alone. floors and activities. Social media apps, especially Google and Facebook, dominate the media market so people no longer rely on carriers as much as they used to when it comes to communication.

Then, increasing bandwidth requirements with the advent of the Internet of Things, 5G and other technologies led carriers to ensure near-constant upgrades to their infrastructure just to keep up. demand, while that infrastructure is no longer as critical to growth and profitability as it once was. Carriers are unlikely to survive long without 5G adoption in the near future.

At the same time, if digitization is required, all industries must depend on the network’s infrastructure and applications. As traditional telecommunications revenue comes under pressure, carriers need to quickly deploy new digital business models to participate in the global digital transformation. It must first unlock its value through its own digital transformation.

Part of the telecommunications digital transformation is the application of value-added services (VAS) provided by content providers (CPs), to increase profits from new revenue streams and to re-model services. customer experience.

VAS benefits both carriers and their customers. Carriers provide value-added services based on key functions, bringing convenience to customers, helping operators save both time and costs. Carriers use VAS to increase the time users spend on mobile devices, sell more services to customers, create harmony in the services provided by carriers, and create a differentiating factor. attract more customers.

In the 4.0 era, many telcos started to pursue new revenue streams to maintain profitability. For example, Verizon increased its accessibility through the media, Orange SA offers many financial services, mobile banking.

Carriers share up to 70% of revenue for CPs

The ConnecTechAsia Summit 2019 held in Singapore specifically focused on the central role of technology companies and carriers in building user growth, developing better monetization models, and reduce disruption rates for content providers in Asia. The symbiotic relationship that content creators have forged with the region’s telecoms and tech companies has become particularly strong. As the market evolves, revenue sharing business models also increase to help sustain these types of partnerships.

Rohan Tiwary, head of Radio, Media & Entertainment Partnerships at Google Asia Pacific, notes that creating progressive deal models is critical to being able to support the needs of content providers as more choice and control and new genres and formats emerge.

A question arises after focusing on developing content services, how will foreign carriers share revenue with CPs? There are many business models and sharing rates, but normally the CP rate will be 70% and the network operator will collect 30%.

In Japan and Europe, the share ratio is from 65% to 85%, priority is given to VAS service providers. For example, in Japan, network operator NTT Docomo shared 70% of revenue with VAS companies. This will help CPs have enough money to invest in content creation and provide many services to customers. Vodafone India is the only carrier in India that shares 70% of its revenue with VAS – but only for D2C services. The D2C service allows subscribers to use the service directly from the Internet using a smartphone, for example a person can download songs from the Hungama portal on the phone using the Vodafone network.

In China, in 2015, China Mobile adjusted for service providers to hold 85%, only if they self-market and take care of customers related to VAS products. Otherwise, China Mobile will hold between 30 and 50%.

While world carriers are giving better shares to CPs, in Vietnam CPs are receiving an average of about 30%, even some CPs only receive 25% of revenue. Therefore, CPs think that this rate is not enough for CPs to reinvest in attractive new content to provide to network customers. Therefore, many CPs have chosen to leave this game. Therefore, this is posing a risk that the carriers will not have rich content to provide to their customers and also affect the operators’ own revenue, when customers do not use the service. content services, because they are so poor.

Du Lam – Thai Khang