Over the Top (OTT) voice providers such as Skype and WhatsApp are disrupting the traditional telecommunications space, and encouraging operators to ‘fight back’, according to a new study from Juniper Research.
The study found that OTT voice providers are expected to see an increase in their service revenues by 2020, reaching over $10 billion and representing a fivefold increase over the next five years.
The study argued that OTT application providers would experience a significant rise in traffic and revenue potential as 4G network rollouts accelerate, thereby increasing their capability to offer high-quality VoIP calls.
Most mobile VoIP services are offered as a free or low cost service, and only a small minority of OTT players have generated a significant revenues from the service, the study shows.
Instead, the more successful service providers have developed indirect or adjacent revenues on the back of the core voice offerings, with a number offering in-app purchases or a social networking platform, according to Juniper Networks.
Meanwhile, the research observed that with traditional operators’ voice revenues in sharp decline as a result of OTT voice activity, a number of operators have adopted new business models mimicking those of OTT players.
These include directly offering functionality such as VoLTE (Voice over LTE) and Wi-Fi calling through the handset.
The research also argued that ‘white label’ OTT services are becoming increasingly important in helping operators compete with the OTT business model.
However, Juniper says such initiatives have historically had mixed results, with various services having been discontinued.
Other key findings from the report include:
- VoLTE will see widespread adoption among MNOs, with operator billed VoLTE revenues approaching $100 billion by 2020, representing 12% of the global operator billed service revenue including voice and data services.
- HD voice adoption has been steadily rising since 2009, with over 130 operators worldwide offering Mobile HD Voice.