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Mar 14, 2014 / 10:44

Mobile network operators move noisily to OTT service market

MobiFone has announced it will develop OTT apps itself, while the military telecom group Viettel reportedly considers buying South Korean Kakao Talk.

A Ministry of Information and Communication’s (MIC) report showed that one of its key tasks in March is considering licensing MobiFone to provide OTT services (free messaging, voice chatting on Internet). However, further details have not been revealed.
If MIC gives the go-ahead to MobiFone, it would become the first mobile network operator in Vietnam that develops OTT apps of its own, according to VnExpress.
Prior to that, the representative of MobiFone once revealed its intention of joining the OTT app market. However, he mentioned the possibility of cooperating with existing OTT firms instead of developing OTT app itself.
Viettel and VinaPhone, the other two of the three biggest mobile network operators in Vietnam, still keep silent about their business plans. However, analysts believe that both the mobile network operators, which sees the turnover and profits down day by day, might have started developing OTT apps already .
Local newspapers in January 2014 quoted a Viettel’s senior executive as saying that the military telecom group has thought of buying OTT firms in order to impulse the creativeness and renovation of the group.
“If we do this (buying OTT firms – reporter), we will put the firms outside Viettel telecom as independent units, which would be a hard pressure on ourselves, because we have to get ready to compete with many other OTT apps,” the senior executive said.
Analysts commented that it would be a wise move for mobile network operators to cooperate with OTT firms. This would allow them to save the investment costs, development sources, while they can enjoy the advantages from the existing service platform.
There were rumors of Viettel’s plan to buy Viber, which was believed to be the most popular OTT app in Vietnam with 8 million users, as a part of the group’s strategy on joining the OTT app market.
However, Viettel has denied the deal. “Viettel never thinks of buying Viber,” said a senior executive of Viettel.
Viettel’s CEO Nguyen Manh Hung, when answering the local press’ questions, emphasized many times that Viettel is willing to cooperate with OTT app firms for mutual benefits. His words may be interpreted that besides the definitive purchase deals, the cooperation with existing OTT firms would be on priority.
Joining hands for the development is the way many telecom groups want to follow. The groups have even thought of launching the 3G service packages specifically designed for OTT. The cooperation would help mobile network operators save big sums of money they would have to spend if they buy OTT firms.
VTC News has quoted its sources as saying that Viettel is negotiating to buy Kakao Talk, also a popular OTT app in Vietnam. The affair, in the eyes of analysts, is very likely to succeed, because Kakao Talk once cooperated with a Vietnamese digital content service provider in the past.