Telecom operator revenue to dip by $104 bn due to OTT in 2017

Should telecoms care about OTTConsumer migration from operator voice and text services to OTT (Over the Top) messaging services and social media will cost network operators nearly $104 billion this year, equivalent to 12 percent of their service revenues.

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Analysing the scale of operator traffic decline together with the uptake of OTT VoIP and message services, the research pointed out that the success of several platforms had substantially impacted on operator margins.

WhatsApp – owned by Facebook — alone generates nearly three times as much daily traffic as SMS.

WhatsApp customers in India exchanged 14 billion messages on New Year’s Eve, 32 percent of which were in some form of media. WhatsApp said the number of messages shared on the platform on New Year’s Eve is even higher than the last record set during Diwali when eight billion messages were sent in one day.

Indian customers of WhatsApp shared 3.1 billion images, 700 million GIFs and 610 million videos on the occasion. WhatsApp has more than 160 million monthly active users in India.

Despite concerns related to OTT services, Reliance Jio, a new telecom operator in India, added over 52 million Internet and voice customers since starting its free 4G service in September. “In the first three months, Jio has grown faster than Facebook, Whatsapp or Skype,” RIL chairman Mukesh Ambani said in December 2016.

On an average a Jio customer was using 25 times more data than the average Indian broadband user. Jio has signed up more than 6 lakh customers every single day in the last three months.

With most leading OTT messaging platforms now incorporating or trialing multiple communication options, including group voice or video chat, telecom operators would see continued erosion of traffic levels in the future.

Telecom operators could introduce the following options both to arrest the decline in core revenues and to develop new sources of income.

# Big data and analytics packages for both consumer and IoT (Internet of Things) devices

# Carrier billing payment options

# Mobile money services

# Mobile identity services

Telecom operators need to provide attractive, original content to differentiate from the competition since mobile increasingly deployed within the context of a quad-play offering.

“With mobile devices regularly used for primary consumption of video content as well as snacking, operators providing popular film, drama and exclusive sports events over multiple channels are at a distinct advantage,” said Windsor Holden of Juniper Research.

Baburajan K
editor@telecomlead.com