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August 08, 2013

OTT Value-Added Services: New Wave for Operators in Communications Marketplace

By Ed Silverstein, TMCnet Contributor

Communications as a sector is changing rapidly. Consumers used to be more focused on voice communications, but nowadays they appear to be more interested in data. These include options such as Voice over Internet Protocol (VoIP), instant messaging (IM), social networks and even file sharing, according to a recent report from HyperOffice.

Newer trends include the introduction of Skype, the iPhone (News - Alert) and iPad, and significant growth in other smartphones and tablets.

Yet, the marketplace continues to evolve. VoIP, for instance, is not as important to communications as some people might think, HyperOffice (News - Alert) says.

Communication has become more diverse, using different systems and devices. Even Short Message Service (SMS) for text messaging is getting replaced by newer methods.

In this evolving market, carrier data revenue hasn’t kept up with data growth. A recent study cited by HyperOffice shows that carriers have a smaller share of an increasing market of revenue. One impressive statistic is that some 85 percent of traffic in the top four mobile networks is described as “pure data,” but it represented just 39 percent of mobile data revenue. In addition, carriers are finding there is increased churn.

“Suppliers of ‘over the top’ (OTT, or ‘value added’) services have been pinching the network operators’ customers by offering messaging and…VoIP calls via smartphone apps,” according to a report from The Economist.

As voice, messaging and even access are no longer sufficient to remain competitive, a new strategy needs to evolve for carriers. The carriers will find that value for the longer term will be in value-added services, industry watchers said. For instance, among the operators who choose to offer OTT services is Telefónica.

One analyst, Chetan Sharma (News - Alert), says that operators will need to provide OTT services under a “fourth wave,” which means they will compete more with each other, with start-ups and even with large Internet-related organizations.

“The next two to five years will be critical for operators worldwide. The strategies they pursue and the investments they make will define their future existence for the coming decade. Operators who are investing heavily in the fourth curve have a good shot at seeing the end of the decade, but a good many will succumb to the powers of the growth curves, leading to consolidation in almost all markets, or they will gradually morph from operators to utility providers,” Sharma said in the article “Operators’ Dilemma (and Opportunity): The 4th Wave.”

To meet the needs of the marketplace, HyperOffice lets carriers offer OTT services under their own brand. That means keeping their customer’s data and having more of a share of the increasing amount of revenue.




Edited by Alisen Downey
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