Shift in Revenue Models Forecast 130 Million Mobile Video Calling Users by 2018

Thanks to technological advancements in Voice over IP (VoIP), Voice over LTE (VoLTE), along with the continuing global deployment of 4G LTE networks, data streams are becoming faster and users are increasing their data usage.

One area in particular that has been able to take advantage of the improvements in the technology is video. In the past, watching a video on a mobile device, or having a video call, usually resulted in a choppy effect as the data needed to be buffered. The increase in LTE coverage has led to faster video streaming, which in turn has led to much higher quality video on mobile devices.

This is leading to a significant growth in the over-the-top (OTT) space. According to a new report entitled “Future Voice Strategies: mVoIP, Carrier OTT and Mobile Video Calling 2014-2018,” the forecast is that there will be over 130 million users in mobile video calling services by 2018.

This report comes to us from research provider Juniper Research, who prepares analytical services to the global hi-tech communications sector. An observation of the report shows that only a small proportion of mobile video calling users pay for OTT services.

Over-the-top content (OTT) refers to the delivery of video, audio and other media over the Internet without a multiple system operator being involved in the control or distribution of the content. The provider may be aware of the contents of the Internet Protocol packets but is not responsible for, nor able to control, the viewing abilities, copyrights and/or other redistribution of the content.

One of the reasons that people use OTT services such as Skype is because it is a free service. This brings up the question as to whether mobile video calling will be able to generate revenues in its own right. Developers have been steadily increasing services to run parallel to their video calling features.

The author of Juniper’s report is Anthony Cox. He said the following, "The role of mobile video calling is becoming clearer. With a number of OTT players having gained a critical mass of users through the provision of free video services, those players are now introducing an array of premium products or creating revenue-share partnerships to create a viable revenue stream."

Some of the findings of the report include:

• With the arrival of 4G, most MNOs will adopt VoLTE, increasing their network efficiency, though direct revenues will be limited
• Specialists such as Kineto and Amdocs have found a niche in creating OTT monetization strategies for multinational operators
• MNOs and rival OTT carriers are collaborating on creating advanced "carrier OTT" voice services, potentially representing the most important change in the voice market since the advent of VoIP itself

The report also found that new standards such as WebRTC (Real-Time Communication) will improve integration of mobile VoIP functionality into web sites and mobile apps. This will pave the way for the development of new services. Is this where the revenue stream will develop from?