A recent report by Mobile World Live writer Joseph Waring (News - Alert) paints a grim picture for mobile providers in India. About half of their revenue is at risk because of over-the-top apps like Skype, which allow consumers to use practically free alternatives to the providers’ voice and SMS services.
According to the report, about 80 percent of mobile providers’ revenue in India comes from voice. The decline in revenue, according to Credit Suisse, would cause these providers to raise their data fees, which in turn, would serve as a disincentive for customers to use broadband. Rajan Mathews told the Economic Times in an interview that SMS revenue has already fallen 30 percent.
One advantage that OTT providers have is that they are not subject to the same fees and taxes that India-based mobile providers are. License fees and service taxes are among the many costs that mobile providers must pay, but OTT providers so far do not.
One possible solution for these providers may well be to change their pricing structure from one oriented toward voice service to one that focuses on data. It’s going to have to occur sooner or later, because technologies like VoLTE will eventually become the norm. With VoLTE, everything is data. Whether you are browsing on the Web, talking on the phone, or sending text, everything is a data stream. Previous cell technology makes a distinction between voice and data streams and they are therefore priced differently.
Another possibility for these providers could be to enter the VoIP telephony market. Instead of trying to beat the Skypes and the WhatsApps of the world with technology that is eventually going to become obsolete, a switch to VoIP service would allow mobile providers to grab some market share with compelling solutions that save businesses money.
The conflict between the OTT and mobile providers in India is to be expected. One of the selling points of Skype (News - Alert) is that it is an inexpensive alternative to conventional phone or wireless service. It’s only natural that consumers would take advantage of the technology. The best thing that mobile providers can do in India is to adapt to the change in the market and compete against the OTT providers. To compete against them using the same old technology isn’t going to work, and having the government step in and make everyone pay more fees and taxes to provide service will make it hard for technology to advance.
Edited by Rory J. Thompson