Tata cedes immunity to growing OTT threat

06 August 2012 | Kavit Majithia


Global carrier Tata Communications has admitted that its traditional wholesale model is under threat as over-the-top (OTT) players continue to invest in network and data centre capabilities.

Allan Chan, president, global carrier solutions, told Capacity that great strides by companies such as Apple and Google in making the convergence to IP easier and quicker, were now directly threatening Tata’s traditional business model.

The comments will come as a shock to analysts who have long believed that Tata’s focus on emerging markets like South Africa and India would effectively immunise the carrier from the OTT threat that hangs heavy over European and US markets.

Chan’s warning will put other global carriers operating in the emerging markets on alert at the growing threat of OTT, which is set to expand on a global scale.

“OTT players continue to expand their services globally, meaning they are increasingly investing in networks and data centres,” Chan said. “They have a particular focus on end user adoption to end-to-end OTT voice services. Are they now posing a direct threat to Tata? Yes.”

In recent months, Google has significantly ramped up its data centre operations. Social media giant Facebook, meanwhile, launched a new data centre in Sweden at the end of last year.

While noting the threat, Chan also said there is great opportunity in carriers like Tata to adapt operations and work with OTT players. “Opportunities exist for us to interconnect OTT through content providers, network operators with IPX and application enablement solutions,” he said. “There is an opportunity for us to serve OTT players similarly through our connectivity, data centre operations, voice and mobility solutions.”

Chan is one of many senior executives to raise concerns in the past month over the increasing threat posed by OTT operators. Huawei’s Mike McDonald spoke at a conference in Asia last month warning operators that they face being disenfranchised unless they move quickly to understand what OTT operators want from the networks they are using.