My Thoughts on Technology and Jamaica: Digicel seeks OTT and Ad Revenue and Why Boosting Postpaid Sales is the Answer


Monday, August 7, 2017

Digicel seeks OTT and Ad Revenue and Why Boosting Postpaid Sales is the Answer

Telecom Providers are seeking to generate more revenue in the countries they operate. This as most of them tend to be heavy on Prepaid Customer and not postpaid

So they want a greater share of OTT and Advertising sales as pointed out by Digicel’s Chairman, Denis O’Brien in the article “Digicel Wants Telecoms To Get A Share Of Internet Revenues”, published Saturday July 22, 2017, The Jamaica Gleaner

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Denis O’Brien made these comments while speaking at the 17th Global Symposium for Regulators in Nassau, Bahamas in early July 2017. Regulators from over 60 countries were in the audience, so his message was clearly pitched towards them.

His view is that telecoms operators need to be given a share of revenues from advertising and over-the-top (OTT) services. OTT is streaming video and audio content such that Netflix that bypasses cable or satellite operators.

His idea is that tapping into the extra markets can fund further expansion of broadband networks in developing countries. After all, the purchase of telecoms licenses, paying for spectrum and then having to pay taxes as a percentage of revenues reduces the funds available to expand as rapidly as they would want to satisfy demand.

But is this the way to go?

Digicel want OTT and Advertising Money - International Regulators might take the bait

It may just be, actually.

Were the International Regulators to allow Telecom Providers to tap into OTT and Advertising, this would be a game-changer for Digicel and FLOW. It could make their 4G LTE Networks profitable, especially FLOW's soon-to-be-launched LTE Network as hinted in my Geezam blog article entitled “FLOW Lyf Increased Free Data for Prepaid & Postpaid heralds Unlimited LTE”.

It would also justify future investments in faster technologies such as 5G which CWC is already testing in Barbuda as noted in my Geezam blog article entitled “CWC first Caribbean LTE-A Pro trial in Antigua heralds 2 to 5 Gbps 5G Networks”.

If this appeal sits well with regional government, we may see streaming of Digicel Play content and Digicel advertisements in our apps.

Revenue from ads and OTT – Focus on Postpaid Sales needed to push new ventures

So Digicel interest in making money from online advertising on phones in the region may be a part of a long-term plan that goes beyond more than just building out bigger Telecom Networks.

It may be the first signs of them transitioning away from being a Mobile company to an Internet based company, building revenue on apps and content rather than just providing service as explained my Geezam blog article entitled “Why Digicel More may woo Jamaican Developers with Advertising partnerships”.

Already Telecom Provider Digicel had blocked Advertising from Search giant Google as reported in my Geezam blog article entitled “Why Digicel blocking Google ads may be the rise of Digicel App World”. 

As for making more money from OTT, it would help their Digicel Play Network to expand beyond the Caribbean, as they could launch in countries around the world, increasing their current numbers as noted in my Geezam blog article entitled “Digicel Play has 35,000 customers as FLOW Jamaica Horizon fails to impress”.

Still, both Telecom Providers need to boost sales for Postpaid services on Mobile, which is non-existent in both companies. If there is no love for Postpaid services, then they will have little uptake for Postpaid OTT services and advertising in app, especially as Jamaicans and Caribbean Nationals hardly download apps anyway. 

Focus on Sales to boost Postpaid services, and everything else will fall into place.

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