From Enemies to Friends
“In the broadband era, over-the-top (OTT) companies using broadband networks such as KakaoTalk prosper, while mobile carriers such as KT are threatened,” said KT Chairman Lee Suk-chae at last year’s Mobile World Congress (MWC) at the end of Feb. At that time, many people in the mobile carrier industry appeared to be wary of OTT providers.
OTT providers are companies that generate profits by utilizing the existing telecommunication environment (Internet/broadband connection) rather than their own networks. Messaging apps such as KakaoTalk, Line, WhatsApp, and social networking services (SNS) such as Facebook and Twitter belong to that group.
There was a general consensus among mobile carriers affiliated with the GSM Association (GSMA) — the MWC organizer — that OTT companies were taking advantage of broadband networks without paying. In particular, overseas mobile carriers, which mainly provided voice call services at that time, seemed to be afraid of OTT providers owing to a lack of understanding.
However, GSMA appears to be extending an olive branch to OTT companies at this year’s MWC. Facebook founder and CEO Mark Zuckerberg, KakaoCEO Lee Seok-woo, and WhatsApp CEO Jan Koum were all invited and delivered keynote speeches at MWC 2014.
At his keynote speech, Mark Zuckerberg said that its recently-acquired WhatsApp is worth more than the purchase price of US$19 billion (around 20.39 trillion won).
Jan Koum revealed his plan to feature voice call functions on WhatsApp. This means that the mobile instant-messaging company will enter the voice call market, which is the mobile carriers’ turf.
Despite those remarks, telecommunication operators are seemingly no longer wary of OTT companies. This change of attitude within a year is due to the fact that mobile carriers perceive OTT providers to be partners, rather than free riders.
Kakao’s CEO’s suggestion of closer cooperation between mobile carriers and mobile service providers to create new shared value can be understood in the same context.