Discussion of the Competitive Strategies of Telecom Operators and Over-the-Top Service Providers from the Perspective of Evolutionary Game Theory

Abstract

Over-the-top (OTT) service refers to content included in basic telecommunications subscriptions without the additional features provided by telecom operators. The booming OTT business has had a huge impact on traditional telecommunications businesses such as voice and short message services, and the sense of crisis among telecommunications operators shows that the channeling trend has become more and more obvious. Faced with competition on the distribution of interests between channels and contents, telecommunications operators and OTT service providers are engaged in a fierce competition and cooperation game. To explore this competition relationship, this paper first establishes an evolutionary model, discussing the competition and cooperation behaviors of telecommunications operators and OTT service providers, and then conducts research on the degree of the effects of cooperation in terms of the combination of strategic factors, including cooperation cost sharing, the benefits distribution mechanism, research and development benefits, spillover effect, and network externality. Additionally, a replicator dynamic system is developed to study the influence of related strategic factors on evolutionary equilibrium. Finally, to verify the theoretical results, a simulation experiment is conducted to further clarify the meaning of the model and obtain meaningful results. The evolutionary game model and method provided in this paper are expected to help both parties make better decisions for future operating strategies.