MANILA, Philippines — Telecom firm Philippine Long Distance Telephone Co. (PLDT) may be facing very stiff competition in the local telco industry, but its chairman admitted that their business is also under attack by non-telco players abroad.
Citing the threat posed by what is known as over-the-top (OTT) players like social networking sites Facebook and video-sharing site YouTube, PLDT Chairman Manuel V. Pangilinan said the company is currently skating on thin ice as it struggles to stay relevant to customers amid fast technological changes.
OTT players are companies and technologies that ride on telcos’ network infrastructure but do not necessarily contribute to the latter’s revenue.
In his keynote speech at the 2012 Internet and Mobile Marketing Association of the Philippines (IMMAP) Summit at Rockwell Powerplant Mall, Pangilinan stressed how they are casting “a careful eye” on OTT players as they can quickly snatch away the telco’s core business.
“To ignore them is perilous; but to surrender their space is unsafe,” the PLDT chairman said. “We must therefore find a balance where we can partner with OTT suppliers and evolve our business model in an independent yet cooperative way.”
“We might as well move into their space now, because we could easily get obsolete by a combination like that. That is why we invested in media,” he added.
Pangilinan said the capability of Facebook to acquire a telecom business such as Verizon in the US is “not too far-fetched,” reiterating how a potential merger between an OTT player and a telco is very likely to happen.
Pangilinan may not have to wait long to see such a thing happen, as Google is already in its advanced stages of testing an ultra-fast Internet service called Google Fiber, unveiled in Kansas City, Missouri, in late July.
Delivering up to 100 Mbps of download speeds, Google Fiber is the search company’s “next frontier” in technology, executives said.
Alternatively, telco executives in the Philippines have in the past admitted that SMS and call revenues have been continuously eroded by messaging services such as Twitter and video-calling apps such as Skype in recent years.
But instead of going into direct competition with OTT players, Pangilinan stressed how partnering with the likes of Facebook and YouTube would be a better approach for telcos here and abroad.
“OTT players actually generate more demand for network bandwidth and capacity. PLDT stands to benefit from greater requirement for broadband services, and if we actually provide OTT services to our customers, we realize additional revenues as well,” he explained.
To cope and stay afloat with what is now called as a “digital tsunami,” PLDT’s strategy is to embrace, rather than resist, these services as the world of telecoms, Internet, and media begin converging.
“We want to be at the heart of that convergence,” he said, adding: “Because that is precisely the space where new and exciting opportunities lie.”
“If we can supply streaming services universally: local playlists, local music, local video – great! This is an OTT service which can change the business model of TV5 itself,” he added.
As chairman of Philippine Long Distance Telephone Company, Smart Communications, and the Manila Electric Co., among others, Pangilinan also chairs the ABC Development Corp., which operates TV5.
InterAksyon is the online news portal of TV5.
source: interaksyon.com
