Telecom: Bundling OTT Services Is Key To Increasing Spends, Winning New Customers, And Retaining Them

Airtel and Vodafone Idea are in a perplexing state of affairs that threaten its existence for sure; it is also a distraction on their path to growth and future investments in areas such as 5G.

Even as Indian telecom companies are in the throes of SC-mandated AGR repayment, customers are having it good with a slew of OTT services. They are even spending more with their service providers, though it is not enough for the service providers to tide over the accumulated financial liabilities. 

Airtel and Vodafone Idea are in a perplexing state of affairs that threaten its existence for sure; it is also a distraction on their path to growth and future investments in areas such as 5G. OTT services are the key to increasing revenues from existing customers on 4G/LTE and it is also the key to returns on investment in 5G. Jio is the only service provider that has the least pain from AGR and stands to get the most benefit from OTT services.  

Nonetheless, it is interesting to understand customer attitudes towards OTT services and its usage patterns. A recent study by Ovum, commissioned by Amdocs, reveals data that should be music to the ears of Indian SPs. The research found that OTT services have a triple effect: carrier-bundled OTT media services make users spend more on their mobile and home broadband bills, users are more loyal to a carrier if provided with the right media offer, and Indians are the most likely in the region to subscribe to multiple paid OTT video streaming services. 

Some India-specific data points from the report

Carrier-bundled media services drive consumers to spend more and maintain loyalty to service providers: 44 per cent of Indian respondents said that bundling media services with their telecom plan was the main reason they were willing to spend more on their mobile and fixed broadband bills. 47 per cent said access to such a service made them less likely to switch providers, while 30 per cent said they might switch in the absence of bundled offers by their current provider. 

Consumers want multiple OTT media service options in their bundle: 56 per cent of Indian digital consumers already subscribe to more than one paid online video service. More than half of these consumers say they subscribe to more than one service to meet the needs of different household members, while 42 per cent said no single service provider offers all the content they want – a reflection, perhaps, of the strong demand for local content in India.  

The pay-per-use model looks more promising for India than monthly subscriptions: 69 per cent of Indians would pay one-time passes for specific content, or short-term access to content, to avoid paying a full subscription. In fact, the average online video subscription (Rs 306) is too expensive for nearly 60 per cent of consumers. The maximum consumers would willingly pay for a monthly online video subscription ranges from Rs 50 to Rs 800.  

Discounting and free trials can hook more consumers: 50 per cent are willing to pay for premium media services via their carrier bill if offered at a discount or with an extended free trial, but only if offered by their existing provider.  

In light of these findings, the recommendation from Ovum is that service providers who can quickly integrate and on-board multiple OTT media partners, offer innovative bundled plans to meet different consumer segments’ needs and deliver a seamless billing and user experience will be the ones who are most likely to reduce churn and grow profitably. 



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