OTT substitution to cost operators $104b this year

Operator voice and text revenues will continue to be eroded by competition from OTT messaging services and social media, with the consumer migration to these services costing network operators nearly $104 billion this year, according to Juniper Research.

The impact of OTT substitution will be the equivalent to 12% of operators’ service revenues, the research firm said.

In a new report, Juniper Research said the major success of several platforms have substantially impacted operator margins, noting that WhatsApp alone now generates nearly three times as much daily traffic as SMS.

While the threat to operator revenues posed by OTT substitution is nothing new, the report also notes that OTT messaging platforms are now trialing or incorporating multiple new communications options, such as group voice and video chat. This is likely to ensure continued erosion of traditional telecoms traffic levels in the future.

But Juniper Research said there are a number of measures operators can introduce to stem the decline in core revenues and develop new sources of income.

These include implementing big data and analytics packages for consumer and IoT devices, introducing carrier billing payment options or mobile money services, and developing mobile identity services for consumers.

With operators increasingly deploying mobile as part of a quad-play offering for subscribers, report author Dr Windsor Holden added that it is essential for operators to provide consumers with attractive, original content to differentiate themselves from the competition.

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