Over-the-Top (OTT) services have historically disrupted the global telecommunications ecosystem by delivering voice, messaging, multimedia, and content services over the Internet. Regulatory responses traditionally focused on protecting Telecom Service Providers (TSPs) from revenue erosion, asymmetric obligations, and network congestion attributed to OTT competition.

However, the competitive landscape is now undergoing a fundamental shift. TSPs are deploying Rich Communication Services (RCS) and integrated digital communication platforms that directly compete with established OTT services at the application layer. This reversal introduces a new form of market dominance risk: ensuring fair competition, network neutrality, open access, and innovation when network operators leverage control over infrastructure, quality of service (QoS), identity, and subscriber relationships to compete with independent application providers.

This article examines this paradigm shift, explores its global market and regulatory implications, and highlights potential policy interventions—particularly the renewed relevance of network neutrality, functional neutrality, and more precise, risk-aligned regulatory design approaches—to preserve innovation, consumer choice, and a level playing field in ICT services.

Introduction

OTT services have long relied on TSP networks to deliver voice, messaging, video, and digital content. Historically, OTTs were perceived as disruptive entrants operating outside traditional telecom regulatory frameworks. Regulators focused on safeguarding operator revenues, ensuring network investment incentives, enforcing lawful access obligations, and addressing perceived regulatory asymmetry.

Today, this dynamic is changing. Licensed TSPs are increasingly moving up the value chain by deploying RCS and other advanced ICT platforms that replicate or extend traditional OTT functionalities, including:

• Rich chat, group messaging, and secure file sharing
• High-quality voice and video communications
• Business messaging, verified identities, and brand engagement

By leveraging network ownership, subscriber identity, billing relationships, default service integration, and brand trust, TSPs gain structural advantages that independent OTTs cannot easily replicate. This raises critical questions for global digital markets:

• Should TSPs face new constraints to prevent anti-competitive conduct when competing at the application layer?
• How can regulatory frameworks uphold network neutrality and fair competition when operators become application providers?

The paradigm has shifted: OTTs—once market challengers—may now require regulatory safeguards to ensure they can compete fairly against vertically integrated operators.

The Rise of RCS and Operator-Led OTT Competition

Rich Communication Services (RCS) enable operators to:

• Compete directly with OTT messaging and communication platforms
• Integrate messaging, voice, file transfer, and video services into core mobile offerings
• Provide trusted, branded, and enterprise-grade communication services

Unlike OTT providers, operators can influence reachability, default activation, identity verification, spam filtering, traffic prioritization, and QoS guarantees. Without appropriate safeguards, these capabilities risk undermining core network neutrality principles, which require that network traffic and services be treated without unjustified discrimination.

Network Neutrality in the Application-Layer Era

Network neutrality—originally conceived to prevent discriminatory traffic management—takes on renewed importance as operators move into application-layer competition.

Modern neutrality risks extend beyond packet prioritization and include:

• Preferential treatment of operator-owned services
• Zero-rating and bundling practices that distort competition
• Default service placement and deep system integration
• Limitations on interoperability and cross-platform reachability

In this environment, neutrality must evolve into a broader principle of functional and competitive neutrality, ensuring operators do not exploit control over networks, identity, or user experience to foreclose competition.

Regulatory Evolution and Emerging Approaches

Historically, regulatory scrutiny centered on OTTs as disruptive, lightly regulated actors. With RCS and integrated operator platforms, attention is shifting toward operator conduct in adjacent digital markets.

Emerging regulatory responses include:

1. Functional Regulation – Intervention where operators leverage network control to disadvantage competing services.
2. Network and Platform Neutrality – Extending neutrality obligations to integration, defaults, and commercial practices.
3. Open Standards and Interoperability – Preventing ecosystem lock-in.
4. Risk-Sensitive Regulatory Design – Translating high-level policy objectives into technically precise and proportionate obligations, an approach increasingly discussed under the concept of granular regulation.

This evolution reflects convergence between telecom regulation, competition law, and digital platform governance.

Shifting Regulatory Paradigm

Principles for a New Regulatory Approach

A future-oriented ICT regulatory framework should be guided by the following principles:

1. Functional Neutrality – Regulate based on service impact, not provider type.
2. Network Neutrality – Prevent discriminatory traffic management and service privileging.
3. Proportionality – Apply obligations only where market power or public interest risks exist.
4. Interoperability & Open Standards – Enable cross-platform communication.
5. Consumer Choice Protection – Safeguard users’ freedom to select services.
6. Innovation Safeguarding – Prevent dominance-driven innovation suppression.
7. Adaptive Regulation – Use calibrated, technically informed rules—consistent with the logic of granular regulation—to address evolving ICT services without over-regulation.

Conclusion

The ICT services landscape has entered a new phase. Telecom operators are no longer merely connectivity providers; through RCS and integrated platforms, they are direct competitors to OTT services at the application layer.

This shift reverses long-standing regulatory assumptions and reinforces the importance of network neutrality, functional neutrality, and carefully calibrated regulatory intervention. Regulators must strike a careful balance: enabling operator innovation while preventing the misuse of network control that can distort markets, restrict consumer choice, or suppress independent innovation.

A principle-based, proportionate, and technically informed regulatory approach—aligned with global best practices and supported by selective, risk-based rulemaking—will be essential to sustain a competitive and innovative ICT ecosystem in the era of RCS and beyond.