Skip to main content

Outlook for Over-the-Top Mobile Communication Apps

There's been a growing concern about the impact of Over-the-Top (OTT) mobile communication software applications -- such as WhatsApp, LINE, WeChat and Skype -- on the Mobile Network Operator (MNO) business model. The negative threat is somewhat obvious, but there is also the potential for market collaboration and business partnerships.

While the majority of OTT communications providers concentrate on growing their community and exploring new business models, this market development also provides an opportunity for MNOs to play an integral role -- and thereby re-emerge as a positive force in the monetization process of OTT communications.

Findings from a new worldwide survey show MNOs are dramatically changing their strategy and plans to partner with the OTT players. The annual survey by Mobilesquared, revealed that by the end of 2014, 55 percent of MNOs have already formed or expect to form a relationship with an OTT partner compared to only 36 percent in 2013.

Most notable, the number of MNOs yet to identify any benefits from OTT partnerships plummeted from 36 to just 4 percent during the last twelve months. Clearly, they're moving beyond the prior denial of this advancing trend, and now embracing the apparent market disruption.

Eighty percent of MNOs currently cite their most pressing concern as declining revenue on traditional voice calls and P2P (Person-to-Person) messages, directly attributed to the increasing pressure of OTT services.

This year, 40 percent of mobile operators said that OTT services attributed to a decrease in revenues over the last 12 months with 33 percent of MNOs seeing up to a 10 percent revenue decline in the period.

With only 21 percent of respondents citing a similar impact in 2013, it is clear that the impact of OTTs on MNO revenues is growing. Mobilesquared forecasts that the global mobile network operator opportunity for OTT communication will be worth $42.9 billion in 2018.

"OTT communications has always been about growing a multi-million user base and market capitalization. But we’re now seeing the maturation of the OTT communications space and the need to monetize the user base. The quickest route to monetization for the majority of OTT communications providers will be to seek out partnerships with mobile operators to capitalize on their end-user relationship and billing functionality," said Nick Lane, chief insight analyst at Mobilesquared.

Survey results from previous years showed that imposing surcharges, charging for data or blocking access to OTT services are no longer seen as viable business models to help MNOs stand up to financial pressure from OTTs.

The number of MNOs offering their own messaging applications fell from 43 percent in 2013 to just 5 percent in 2014. A further 10 percent of MNOs blocked OTT services in 2012, but now this practice is not done at all.

Moreover, 71 percent MNOs believe an increase in customer loyalty is the predominant benefit of forming an OTT business partnership. Consequently, 45 percent of those surveyed saw opportunities to monetize OTT services through the inclusion of data as part of the standard data bundle.

While MNOs are now actively looking to build partnerships with OTTs, many still have questions surrounding the logistics and literal implementation. As an example, 64 percent of mobile operators said that business reasons were the primary motive for not forging a partnership with an OTT provider, followed by infrastructure complexities (26 percent) and regulatory issues (23 percent).

Not only are there challenges, according to Mobilesquared assessment, but mobile operators have also expressed their concerns of entering a collaborative model with an OTT provider. Almost one-third of mobile operators said that they would have no idea what the contractual agreements would look like.

Popular posts from this blog

Digital Identity Verification Market to Reach $16.7B

As more enterprise organizations embrace the ongoing transition to digital business transformation, CIOs and CTOs are adopting new technologies that enable the secure identification of individuals within their key stakeholder communities. A "digital identity" is a unique representation of a person. It enables individuals to prove their physical identity during transactions. Moreover, a digital identity is a set of validated digital attributes and credentials for online interactions -- similar to a person's identity within the physical world. Individuals can use a 'digital ID' to be verified through an authorized digital channel. Usually issued or regulated by a national ID scheme, a digital identity serves to identify a unique person online or offline. Digital Identity Systems Market Development Complementary to more traditional forms of identification, digital identity verification systems can enhance the authenticity, security, confidentiality, and efficiency of

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente

Global Pandemic Accelerates the Evolution of Transportation

Given the current trends across the globe, organizations that depend upon the continued growth of personal vehicle ownership will need to consider a plan-B scenario. While some companies will be able to adapt, others may find that their traditional business model has been totally disrupted. According to the latest worldwide market study by Juniper Research, Mobility-as-a-Service (MaaS) will displace over 2.2 billion private car journeys by 2025 -- that's rising from 471 million in 2021. Juniper believes that for MaaS to enjoy widespread adoption, subscription or on-the-go packages need to offer a strong combination of transport modes along with feasible infrastructure changes, high potential for data collection and low barriers to MaaS deployments. Mobility-as-a-Service Market Development The concept of MaaS involves the provision of multi-modal end-to-end travel services through a single platform by which users can determine the best route and price according to real-time traffic