Technology decisions ‘dramatically influence’ OTT business modelsJoseph O'Halloran ©RapidTVNews | 29-01-2012
Just when operators may have thought that making money from over the top services was all about business, a new report from choice of technology ’dramatically influences’ the business model that operators can adopt to keep their core networks profitable.
The reportprovides a business-case comparison of different network architectures to enable operators to make an informed decision regarding the optimum techno-economic strategy and calculates that), for the same capex investment.
In the analyst’s eyes the challenge is now that the core network has become a commodity asset, and the goal for operators is a ‘relentless’ pursuit of a strategy and architecture that takes all of the cost out of that network, while making sure that it remains flexible enough to handle all the diverse traffic types it has to carry, and also meets or exceeds any quality-of-service and service-level agreements in place with customers.
Making this more difficult is the increasing unpredictability of traffic, in terms of the amount being carried on their networks, its source and its destination.
“The traditional operator’s business model is being challenged, primarily because of the de-integration of the traditional ‘service-network’ vertical model, which is forcing network service providers and network operators to carry an ever-increasing amount of traffic over the top (OTT)” explained Franck Chevalier, Manager at Analysys Mason, and main author of the report. “Yet, service providers have to carry this OTT traffic without extracting any additional income, as all the service revenue goes to the owner of the content.”
The report considers three possible strategies for handling growth in packet-switched traffic while maintaining service quality and suggests that a packet-switched MPLS network is both a more cost effective and more flexible technology than an OTN circuit-switched infrastructure based.
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