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January 10, 2017

Study: Telcos Losing Big to OTT

We all know that over-the-top providers have really done a number on the telcos. Once fat and happy, collecting big money for their text and voice services, the telcos were hit hard when the newcomers came along a few years ago with their more affordable OTT offerings.

Well, the hits just keep coming.

According to a recently released study from Juniper Research, network operators are likely to lose nearly $104 billion this year as consumers continue their move from operator-provided text and voice services to OTT messaging and social media solutions. That’s 12 percent of the network operators’ revenues, Juniper notes.

In fact, WhatsApp alone now generates nearly three times the daily traffic of SMS, according to the firm. And many top OTT messaging platforms are now offering or trialing multiple communication options, such as group voice and video chat, which could mean even more problems for the network operators in the future, Juniper adds.

Meanwhile, a February article by Revector talks about the threat of OTT bypass call termination to mobile network providers.

“OTT bypass happens when OTT app providers terminate calls through an OTT app that have begun life as a normal fixed or mobile telephone call,” wrote Revector, which says it has identified huge global levels of OTT bypass, causing telco revenue losses of tens of millions of dollars.

“Whilst OTT to OTT calls are fair competition to telecommunications networks, there is an increasing trend for voice over IP apps to divert calls away from the telecommunications networks and to terminate them within their apps,” Revector continued. “When this happens the OTT app providers receive fees for connecting the call that would otherwise be collected by the telecommunications network.”

However, Juniper Research suggests that there are some things the network operators can do to stop the bleeding due to OTT migration. That includes introducing big data analytics solutions for consumer and Internet of Things devices, offering carrier billing payment options, and delivering mobile identity services and mobile money services.

“With mobile devices now regularly used for primary consumption of video content as well as snacking,” said Juniper Research author Windsor Holden, “operators providing popular film, drama and exclusive sports events over multiple channels are at a distinct advantage.”

Edited by Alicia Young

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