Boston, MA 05/05/2014 (wallstreetpr) – Telecom Italia SPA (ADR) (NYSE:TI) is among the telecom operators around that world that are feeling pinched by the growing over-the-top (OTT) services. However, instead of just sitting back and mourning the loss of revenue in voice and text services that are now provided almost free of charge over the Internet, the company feels it is time to work with the people behind that revenue loss.
The company announced it would seek to work closely with Facebook Inc (NASDAQ:FB) and Amazon.com Inc (NASDAQ:AMZN) among other OTT providers. According to CEO Marco Patuano, beyond competition there are better things in partnering with OTT players.
Citing the two major OTT players, Telecom Italia SPA (ADR) (NYSE:TI) believes its customers can benefit a great deal from the vast infrastructure of Facebook and the rich app menu of Amazon. Telecom Italia is already in business arrangements with Amazon whereby in December the companies agreed to preload Amazon app for Android on TIM devices.
If you can beat them join them
It seems Telecom Italia has come to the realization that competition with OTT players is not only expensive, but also yields very little compared to embracing their services to enhance customer experience on mobile devices.
The cooperation between OTT and telecom operators is growing around the world. Facebook for instance has entered into agreements with various carriers to allow free Facebook access on mobile devices. The strategy not only allows widespread Internet access especially to regions that are underserved, but also enables Facebook to get more people to its network.
Telecom Italia shakes management
Telecom Italia SPA (ADR) (NYSE:TI) recently undertook a management shakeup in which a new board of directors was put in place and Marcos Patuano confirmed as CEO of the company. The confirmation of Mr. Patuano followed the exit of Mr. Franco Bernabe who resigned under pressure after growing unpopular with a section of top shareholders.
Mr. Patuano, 49, and a 24-year veteran of the company seeks to forge strategic partnerships, upgrade networks and divest underperforming assets to cut debts that create value for the shareholders. The move to work with OTT players is part of the CEO’s efforts to restore the company as a profit-making machine.
