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Demand for Video Communication via Mobile Networks

According to the latest market study by ABI Research, video communications and online messaging services over mobile networks were used by fewer than 47 million subscribers at the end of 2011, but will grow to reach 390 million users in 2016.

Mobile network operators once regarded video communication as the likely successor to voice communication and a source of potential new revenue, but their expectations are now more realistic.

Free alternative video chat offerings will always be available, which requires the service providers to offer substantive value-added offerings that are likely to generate revenue. That said, challenges remain in the marketplace.

"Only a small minority of consumers are willing to pay a premium price for video calls," says senior analyst Aapo Markkanen at ABI Research.

Video services will be monetized by their bundling with other communication media, promoting premium features to enterprises, and/or delivering advertisements.

But could operators seek an edge by offering a better system than the free over-the-top players? Markkanen is skeptical, pointing to the evidence from voice and text messaging services.

"Traditional mobile services didn't evolve in a practical sense with the operators in the driver seat. I seriously doubt they can reinvent video communication services," he said.

Perhaps the most serious dilemma for the mobile service providers is the lack of interoperability between the separate video ecosystems. Allowing the different ecosystems such as Tango, fring, and Apple's FaceTime -- as well as all the carrier services -- to seamlessly interconnect with each other is a big challenge.

However, if video chat service interoperability can be addressed effectively, then the large-scale adoption of mobile video applications could be closer than expected.

These findings are from ABI's study of services that are provided to consumers either by mobile network operators or by over-the-top (OTT) service providers. Their report covers video telephony, video messaging, and video sharing, as well as Video-on-Demand consumption.

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