It’s no secret that applications from over-the-top players are draining telco revenues. But you may be surprised at the extent of this phenomenon.
According to Ovum (News - Alert), OTT voice services will displace $52 billion in telco revenue globally by 2016, and competing messaging services will draw away $32.6 billion in revenues from them this year and $52 billion by 2016.
“Over-the-top messaging poses a real and material threat to SMS revenues,” according to a McKinsey & Company (News - Alert) report issued a year ago last month. “Carriers are exposed to risk when they react both too slowly and too quickly. Acting too late can be a major strategic mistake. As case examples from the Netherlands and Korea show, when a market tips towards an OTT solution, the switch happens virally and quickly (within a year) and the decline is dramatic and hard to reverse. However, acting too soon is also very expensive. SMS messaging generates 50,000 times more revenue per megabyte, on average, than data average revenue per user; as a result, defensive actions that reduce profitability or self-cannibalize the SMS channel to hold off an OTT threat are expensive and should not be taken prematurely.”
The good news, says D2 Technologies (News - Alert), is that carriers can overcome this obstacle with their next-generation wireless networks and the help of a new solution called the mCUE.
The D2 Technologies mCUE enables service providers to offer rich, new communications services. Based on the Android OS, and with support for IR.92 VoLTE and RCS/RCS-e GSMA (News - Alert) standards, the mCUE can allow telcos to deliver such features and services as HD voice, real-time video calling, instant messaging, presence, SMS-over-IP and VCC/CSFB on 4G mobile networks. It can also be used to enable carriers and device manufacturers to create endpoints, such as media phones, smartphones, tablets, and other mobile devices.
The company recently introduced an mCUE 4G IMS software client for VoLTE and RCS/joyn.
“VoLTE/RCS-joyn implementations continue to gain operator momentum in key countries, including the most recent launch of joyn by Orange in France,” noted Doug Makishima (News - Alert), chief operating officer for D2 Technologies. “This rapid adoption is encouraging, and we expect to see close to a dozen more launches in the next six months.”
Edited by Blaise McNamee