Telecom Italia CEO highlights 'burdens' created by OTT players

BARCELONA, Spain--The CEO of Telecom Italia, Franco Bernabe, used his keynote appearance here at the Mobile World Congress trade show to rally against over-the-top players, arguing that OTT vendors are sucking resources away from wireless operators.


In a presentation that ranged from mobile commerce to cloud services, Bernabe spent the bulk of his stage time discussing the rise of OTT players and their effect on the mobile industry. His comments were given weight by his position as the current chairman of the GSMA, the organization that conducts the MWC conference.

"There's a great difference between operators and OTT" players, Bernabe said, explaining that the relationship between the two sides is both innovative and challenging.

Specifically, Bernabe argued that OTT players hinder competition by relying on non-standardized technologies. He said such players also don't understand mobile, and therefore cause unintended problems like overloading mobile networks with unnecessary signaling.

"This imposes a big burden on mobile operators," Bernabe said, noting that average revenues per user in Europe have decreased from 26 euros in 2006 to 20 euros in 2011--at a time when operators are investing heavily in their networks to deal with traffic generated in part by OTT services.

Though Bernabe didn't name any names, network operators generally consider companies like Facebook, Netflix and other third-party Internet service and content providers as players that provide services "over the top" of the network. While consumers have generally rushed to such services, operators in some cases have lamented the additional traffic OTT players create, and in some cases have argued that OTT companies should share in the cost of network maintenance.

Though Bernabe didn't specifically call for OTT players to provide funds for network upkeep, he did say that the "business models...need to be revisited."

Bernabe's comments are notable in that this year's MWC includes appearances by a number of OTT companies including Google and Facebook. Interestingly, the head of AT&T's technology division, John Donovan, made comments on the topic to the Wall Street Journal. He said the carrier is looking for ways to ensure app developers can pay for the traffic their apps generate.

For more:
- see this FierceMobileContent article
- see this IDG News Service article

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