Over the top suppliers of mobile voice and messaging services will be earning $166.5 billion in 2016, according to a mobile Squared forecast.
OTT mobile messaging services will cost mobile service providers $4.2 billion in 2012, growing to $12.5 billion by 2016.
Total mobile voice revenue is forecast to fall from $714 billion to $573.51 billion over the 2012 to 2016 forecast period, from a combination of OTT market share shifts and price erosion.
On the other hand, mobileSQUARED forecasts that OTT communications will generate termination and interconnect fee-based revenue for mobile operators of $3.7 billion in 2012, growing to $8.4 billion in 2016.
Off-net messaging traffic is forecast to be worth $2.93 billion in 2012, and $6.4 billion in 2016, OTT-based off-net voice revenue is seen as reaching $805.5 million in 2012, increasing to $1.92 billion in 2016.
So the logical question is whether mobile service providers should embrace or continue to try and resist the OTT challenge. Though significant numbers of mobile service providers simply block access to OTT voice and messaging apps, many believe that is an untenable long-term strategy.
Network effects might be the best weapon mobile service providers have for countering the appeal of over the top mobile voice and messaging apps, a study by mobileSquared, sponsored by Tyntec, argues.
In other words, the big disadvantage for any closed community is that a user cannot be sure “everyone” with whom he or she wishes to communicate with is part of any closed community. The enduring advantage of the public network is ubiquity.
Carrier SMS has value precisely because every mobile device has the ability to send and receive a text message. Carrier voice has value because “every” public network user can be reached.
But you might argue that no matter what mobile service providers do, over the top is going to keep growing. The only issue is how much traffic might shift to over the top app or service providers, or the magnitude of the revenue shifts.
Almost 32 percent of mobile service provider executives surveyed by mobileSquared expect between one percent and 10 percent of revenue will be displaced by over the top services, with 43 percent of operators expecting 11 percent or more revenue shifts. Compared to the answers given in the 2011 survey, the number of service provider executives predicting a revenue shift has grown 169 percent in a 12-month period.
In 2011, 54 percent of mobile operators believed OTT would displace up to 10 percent of operator revenue in the next five to 10 years, with an additional 16 percent believing that the impact would be 11 percent or higher.
Every respondent mobile operator in the 68 countries studied believes voice and text messaging traffic will decline over the next five to 10 years. In the latest study, some 37 percent of mobile service provider executives surveyed believe they will lose up to 20 percent of traffic, while 53 percent of operators expect a 21 percent or greater decline.
Some 46 percent of operators in a 2011 survey conducted by mobileSquared believed trafficlevels would drop up to 20 percent in five to 10 years. About 27 percent are anticipating a traffic decline of 21 percent or more.
In other words, over the last year, the number of executives who now believe their voice and text messaging traffic will decline has doubled over the 2011 levels.
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Edited by Brooke Neuman