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Operators see more opportunity in IoT than OTT PDF Print E-mail
Tuesday, 02 February 2016

Risk management and analytics expert Neural Technologies has found that more operators perceive the Internet of Things (IoT) as a driver of potential ARPU growth than Over the Top (OTT) services. 

According to academic research, the total number of connected devices in use globally is projected to grow from 10 billion in 2013 to between 19-40 billion by 2019. The total global impact of IoT technologies could generate anywhere from $2.7 trillion to $14.4 trillion in value by 2025.

Neural Technologies has just published its Global Risk Management Survey 2016 and the findings show that 74% of respondents saw IoT as an overall opportunity to increase their company’s ARPU, compared to 50% for OTT. Reasons given for seeing the IoT as an opportunity included increased use of data via bundling, ability to offer additional services and subscriptions and increasing ARPU by selling M2M and other similar services. 86% of respondents in Latin America saw IoT as an opportunity, the highest proportion globally, whilst only 58% of North American respondents saw the same opportunity.

When asked about OTT, 42% of respondents considered OTT more of a threat than an opportunity, citing the increasing trend of OTT Bypass fraud and customer distrust of Over the Top services as reasons. 50% saw opportunities to increase ARPU through OTT by offering OTT apps, on-demand services (including TV, movies and sports add-ons) and broadening product offerings. The remaining 8% saw OTT as both a threat and an opportunity. Globally, the regions have very different perspectives: only 17% of North American respondents saw OTT as an overall opportunity, compared to 75% of Central Asian respondents.

Luke Taylor, CCO for Neural Technologies commented: “Technology opportunities and threats often come in pairs, so we expected to see some differences of opinion, but were surprised that so many respondents thought that IoT will drive up revenues per user. The scale of potential new revenues will obviously vary from company to company, as different operators are working on different business models, but it is encouraging to see so many operators recognising the opportunities in both IoT and OTT. Emerging markets were also the most optimistic about these opportunities, with CALA and Central Asia leading the pack. It will be interesting to see how these developing economies use the Internet of Things and Over the Top services as their markets evolve.

“Both IoT and OTT present their own challenges in terms of risk management and Neural is continually investing to offer our customers security and adaptability as the technological environment continues to evolve.”
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