Archive by Author | Niek A. van der Horst

Over the top

Last week, Vodafone made an appeal to the government of India should install taxes on over-the-top (OTT) players as WhatsApp, Viber, Hike and Facebook (http://timesofindia.indiatimes.com, 2014).

An over-the-top (OTT) application is any app or service that provides a product over the Internet and bypasses traditional distribution. Services that come over the top are most typically related to media and communication and are generally, if not always, lower in cost than the traditional method of delivery. (http://www.techopedia.com/, 2014)

over the top

Over-the-top applications only pay tax in the country or countries where their headquarters are located. This means they can earn revenues through for example ads without having to pay any taxes to the country where the user was located when clicking that ad.

Vodafone claims there is no level playing field. Vodafone India Managing Director and CEO Marten Pieters says: “We (operators) have to pay taxes, license fee and have to share revenue (with the government). The other guys have a complete free ride.”

Pieters makes an interesting point. Mobile network providers have seen their revenues from SMS text messaging drop to nearly zero because WhatsApp and comparable messaging services. Likewise, Skype and Viber are substitutes to calling over the mobile network of Vodafone and other mobile network providers. The remarkable thing is that these companies, offering substitutes to the services of mobile network providers, are being accessed largely through the networks of these same mobile network providers. The OTT pay no tax, whereas the mobile network provider pays taxes and licencing fees to the local government.

Apps as Skype, Whatsapp and Facebook have clearly radically changed the landscape of mobile network providers and put their revenues under heavy pressure. It can be argued that the OTT applications have an unfair competitive advantage, as they are not taxed whereas the mobile network providers are. What do you think? Do you believe it’s fair to tax OTT apps?

Resources:

http://timesofindia.indiatimes.com/tech/tech-news/Facebook-WhatsApp-must-be-taxed-Vodafone/articleshow/44820006.cms

http://www.entrepreneur.com/article/38912

http://www.techopedia.com/definition/29145/over-the-top-application-ott

Big Data for Big Energy Savings.

Articles on big data and its many implications for the world around us are yet around for a while and numerous. From improving healthcare and optimizing firm performance to fooling terrorists plots by the NSA, big data’s reach touches nearly all imaginable facets of the modern world. The plots and marketing of the hit series House of Cards has even been based by its creators, Netflix, on observations from their 33 million users, a topic various authors discussed on this blog. These are all great examples of the seemingly unlimited applications of big data and the impact it can have on all of us.

Though, what seems to miss in all the buzz around Big Data is what it can do to help up face the probably biggest challenge of our generation; drastically decreasing our energy consumption.

Is this because of the reluctance of the consumer or are the large energy companies to blame?
Either way, the solution may very well lie in the use of Big Data.

If Netflix created House Of Cards success largely by using the known habits, preferences and ratings of its users available to them, why can’t the energy firms come up with personalized advices and energy saving offerings to its customers?

The Tata Consultancy Services 2012/2013 Big Data Study revealed that the Energy sector is one of least advanced sector with regard to the use of Big Data. Whereas in the same study is stated that Energy firms Big Data spending in 2012 resulted in a 60.6% return, the second highest score!

tata

Table from The Tata Consultancy Services 2012/2013 Big Data Study

Energy companies could start right away with using the terabytes of data on past bills and participation in past energy saving initiatives to send out personalized advices on energy saving. Furthermore, they can send personalized offers for energy-saving products and measures. This can greatly increase the engagement of their customer and result in new revenue streams. And effectively face the greatest challenge of our generation.

How would you feel about receiving personalized advices and offerings to reduce your energy consumption from your energy provider, based on your past energy consumption behaviour?

Resources

The Tata Consultancy Services 2012/2013 Big Data Study, 2013, Tata Consultancy Services Limited

Why Big Data Analytics Could Spell Big Energy Savings, 27 February 2013, Spotfire Blogging Team