Post-Jio Era: An Obituary Note to India’s OTTs
When I was finishing my post-graduation in 2007, my father gifted me a Nokia 1100. I was elated to have the first mobile phone of my life. It used to serve only calling and messaging needs, and of course, that famous Snake game.
The Internet on mobile was not required. There were computer labs in college and cyber-cafés in the neighbourhood that used to address our internet needs.
In the next 5 years, the scenario changed completely. Smartphone became the de-facto form factor and mobile internet became the craze, creating a major revenue stream for the telecom operators.
In simple words, it was a silent revolution. A revolution that brought a change towards a developed India. And, we should be thankful to the Over-the-top (OTT) players to inspire this revolution.
They are the ones who offered us free calling and messages through the internet and motivated us to adopt data plan from the operators. And, helped the operators to build a strong data-focused business.
They also survived the strong resistance from the operators. Instead, they offered operators a relationship that would help the operators to boost their data revenue. Even then, operators complained.
And, this continued until September 1, 2016. This was the day when Reliance Jio announced their entry into telecom space with free calling and SMS, along with free internet.
Many OTTs collapsed, only few could survive.
Who killed OTTs?
Neha Dharia, Senior Analyst, Ovum believes, “It’s not Jio, but too much domination by WhatsApp and Facebook messengers caused the collapse in the OTT space.”
“Though the big ones survived the scare, the smaller ones had to suffer in spite of having a great product. It’s due to not having deeper pockets and also, sometimes a wrong strategy as we have seen in the case of WeChat” said Dharia.
Nanu, an app developed by Singapore-based Gentay Communication, in its short 8-months stint in India has given the operators many sleepless nights. Gentay Communications, in its website, also claims to build a video call app for homegrown messaging company Hike. However, the company shuts its business within a few months of Jio launch.
Martin Nygate, who founded and spearheaded the growth of the app, has a different view altogether. According to him, it’s not Whatsapp or any other app, but the regulator who has killed the space. “A tortoise-speed outlook towards framing industry guidelines and policies, and heavy license fees are good enough reasons for any start-up to shut its business.”
“India was a wrong strategy. We should not have focussed in this market. It killed a great product” laments Nygate.
OTTs and Net Neutrality
Even if the large OTTs working exclusively with an operator, Dharia does not see any conflict with net neutrality. She believes net neutrality can stall the growth in the telecommunication space if it comes in the purest form.
“Net neutrality – it’s still a debate. OTTs and telecom players need to work together keeping net neutrality aside. There is no law as of now, and until it shapes up, industry should continue working in this direction” adds Dharia
New Life, With a New Hope
“The larger OTTS are safe and working closely with operators. The smaller ones are moving away from communications,” says Dharia. This is evident in the global landscape as well. Viber diverted its focus into the e-commerce space post its acquisition by Rakuten. Kakao Talk is gradually becoming an on-demand player.
The story looks similar for Nanu, but with a difference. Martin Nygate changed his strategy and has gone B2B with a virtual PBX solution, Velox utilising the technology built for Nanu.
Nygate is hopeful again, “We deliver better quality than Singtel and deliver better qualities and have the required regulatory permissions.”
Velox is yet to have its first investor. “We have learnt our lessons the hard way. It’s always better to be in the business where customers are willing to pay. It’s good to ride on investor’s money, but you never know when it would dry up,”
“We are looking at funds, but for real growth that shows you money” Nygate looks a more confident entrepreneur this time.
There is always something fishy in the Terms and Conditions document. With all the patience, Rahul loves to read these mysteries. He believes that the truth needs to unfold, hidden in these documents. He earns his living as a communication professional and lives his passion by writing on business mysteries. Follow him on Twitter and network with him on Linkedin