Over-the-top (OTT) media services are growing rapidly in global markets, fueled by increasing mobile device penetration and increased adoption of cloud-based services in key sectors. These include finance, e-commerce, health, education, gaming and sports. North America remains the largest regional market for OTT by revenues, where deployment of advanced broadband networks is a key driver. But higher numbers of smart devices are pushing dramatic growth in OTT services in emerging markets like the Middle East, Northern Africa and some less obvious areas in APAC.
In addition to streaming, gaming platforms, SaaS cloud services and content delivery networks are transforming what have traditionally been Tier 2 OTT markets. Combined, increased mobile device penetration and improvements to streaming services are driving impressive growth, with compound annual growth rates of 72% in the MEA region, 59% in Latin America and 58% in Asia-Pacific.
Emerging markets continue to face challenges. Penetration rates are low in MEA countries, especially in Sub-Saharan Africa. As new technologies like 5G are adopted, OTT consumption will see another boom tracking with rising per capita income and internet speeds.
To prepare, the leading OTT players are looking for capacity to get closer to new customers.
The in-region advantage
OTT services need solid performance, but APAC and MENA are hard to reach. Where the infrastructure means slower internet, performance demands providers be in the region. Geopolitical factors can make it challenging and time-consuming to simply build new routes.
Gaming, SaaS and OTT content delivery thrive on user experience. This means the content must live in-region to avoid latency and network congestion. Providers are now looking to existing neutral networks for capacity solutions. This may be a bridge strategy as new cables wait on approvals or it may be a longer-term play in areas where approval processes may be lengthy or simply not possible.
Systems with connectivity into high-growth markets in Qatar, Kuwait, India, Korea, Taiwan and Japan are gaining renewed interest where new cable construction is lagging behind OTT interest, for a variety of reasons, including geopolitical.
It’s in the platform
Network providers with existing assets in select regions are exploring three- to four-year contracts under terms that allow OTT services into places they otherwise are unable to reach anytime soon. Operators can provide near-term access to cable landing stations, IP peering capabilities, data center infrastructure and other resources for OTT providers to gain proximity and improve performance in hard-to-reach, high-growth parts of the world.
OTT using Amazon’s Outpost, which is basically AWS in a box, to support content needs persistent connectivity back to the two main AWS regions within certain latencies and tolerances to make it work effectively. When you combine that with reliable existing capabilities in the right places, you start to see a platform OTT providers can work with today, without the uncertainty and CAPEX of trying to build in there yourself.
This is one example of how fresh thinking can bring some great solutions to bear when approaches that worked in Europe and North America aren’t getting you there.
Enduring value
This growth in OTT is one more factor pointing to the lasting value that remains in what we once thought of only as aging subsea systems. There is capacity and capability out there. In many emerging markets experiencing dramatic growth for OTT, these assets represent renewed opportunity.
Couple these new deals coming in with improved O&M and life extension initiatives and the industry is increasingly looking at legacy systems through a new lens of enduring value.
