As use of over-the-top (OTT) communications services continues to grow, demand for wireless data has soared. Today’s mobile network operators, while making infrastructure investments to meet this demand, also face declining messaging volumes and revenue due to the popularity of these third-party OTT alternatives.
At the same time, voice revenue is at risk due to the growing number of IP-based options that bypass operator-provided cellular voice plans.
How should operators respond? A growing number are concluding that they can be more than just data providers through which third parties off er their subscribers IP-based services. By introducing Rich Communication Services (RCS), the GSMA-backed answer to the OTT threat, operators can provide their own compelling communication features that meet subscribers’ demand for advanced voice and messaging services.
The OTT Impact
The number of OTT apps available to mobile subscribers is sizeable, with options ranging from established services like Blackberry Messenger, Facebook Messenger, and Skype to smaller startups such as WhatsApp, Viber, Tango, and Snapchat. Offering mobile subscribers innovative – and typically free – communication options, these services deliver features that operators’ legacy services cannot. Though many operators initially dismissed the potential impact of OTT competitors, it’s now clear that this new form of competition is having a dramatic effect on traditional operator provided services. In third quarter 2012, U.S. operators saw a decline in both messaging volume and revenue for the first time, according to Cheetan Sharma, which attributed the decline to OTT messaging alternatives.
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