Technology | Media | Telecommunications

Tuesday, November 05, 2013

Flipside to Over-the-Top Messaging Service Challengers

For the longest time, text messaging has been a huge cash cow for mobile network service providers. However, the eager acceptance of over-the-top (OTT) mobile device applications is greatly expanding the overall messaging market and comes partly at the expense of legacy text messaging.

According to the latest market study by ABI Research, the deployment of competitive Voice over Long Term Evolution (VoLTE) and Rich Communication Services (RCS) will likely help network operators retain 65 percent of their former messaging market share.

That being said, the many free or low-cost mobile messaging application (app) alternatives available to consumers are still a worrying concern for mobile network operators.

Operators can use VoLTE and RCS services, ultimately to retain their subscribers, and also increase revenues that will come with the many innovations from third party developers.

The quality of services that VoLTE and RCS can provide to their customers will be as table stakes in the mobile device, and may prove compelling to mobile service subscribers -- assuming that some people remain unaware of the free alternatives.

"Operators are the key drivers of RCS. When they adopt VoLTE with RCS enriched services natively embedded into the mobile, they will in time develop competitive advantages. This will also attract and retain customers with the quality and services they provide," said Sabir Rafiq, research analyst at ABI Research.

Not all of the increase in OTT messaging and voice traffic represents lost revenue to operators. Operators still have a commanding share of voice and messaging but the OTTs are increasing their audience, the operator share is decreasing.

ABI Research finds that the leading infrastructure vendors, Ericsson, Alcatel-Lucent, Huawei, and NSN all have RCS solutions. There are also various specialists with RCS-based solutions available for operators.

Companies like, Acision RCS, BroadSoft, Syniverse, Kineto and more also provide the mobile network operators the means to potentially overpower OTTs in the market. But we'll have to wait and see if that actually comes to pass.