Over-the-Top Communications: Threats & Opportunities for Mobile Operators


October 1, 2012
103 Pages - SKU: CCEQ4911165
License type:
Table of Contents
Over-the-top (OTT) communications represents the largest threat to mobile operator revenues in the last 10 years. Today, VoIP is capturing an increasing proportion of mobile voice minutes, but in terms of value it is still worth less than 0.5% of overall voice revenues. With regards to messaging, ARCchart expects that instant messages will exceed SMS volumes by 2014 and continue growing rapidly thereafter, accounting for 65% of all message traffic pushed over mobile networks by 2016.

This report examines the implications of widespread adoption of mobile over-the-top IP communications for mobile operators, handset vendors, and the OTT providers themselves, looking at how OTT players have gained a foothold at the expense of the mobile network operators and analysing how the various ecosystem stakeholders are dealing with the new industry dynamics.


A. INTRODUCTION
A.1 History of Over-the-Top
Historical OTT Example
Microsoft versus IBM
Contemporary OTT Examples
Skype
Apple’s Siri
Facebook
A.2 The Threat to Traditional Communications
Operator Revenues at Risk
A.3 Operators Fighting Back
Attempts to Limit OTT Access
Operator Advantages over OTT
A.4 Report Overview
B. MARKET OVERVIEW
B.1 The Evolving Mobile OTT Landscape
The Flow of Value Between Internet Companies and Cellcos
Risks to the OTT Business Model
Transitioning from Free to Paid
User Consolidation of Services
Support for RCS
B.2 Data Revenue Not Compensating for Lost Voice and SMS
Regional Examples
UK
Netherlands
South Korean
Operator Challenges to OTT Communications
B.3 Net Neutrality & Taxing OTT Providers
Google Tax
Dangers of Taxing Usage
Interconnect Changes
South Korea Landmark Net Neutrality Agreement
B.4 Market Segmentation
Social Networking Communities
Mobile-First Instant Messaging Providers
Mobile VoIP Providers
B.5 Regulation
International Telecommunications Regulations
Treaty Background
Impact of the Treaty Renegotiation on OTT
Brining OTT Under the ITU
VoIP Regulation
C. DRIVERS & BARRIERS TO OVER-THE-TOP COMMUNICATIONS
C.1 Market Drivers
International Calling
Smartphone Adoption
Smartphone Penetration
Low-Cost Smartphones
Open APIs
Ease of Handset Integratin
OneAPI Initiative
Carrier API Initiatives
Flat Rate or Low-Cost Data
IP-Based Messaging vs. Bundled SMS
Social Networking
Case study: Facebook Messenger
New Business Models
Scale and the Viral Effect
App Stores
Data Speed & Quality
Wi-Fi
C.2 Barriers to Growth of OTT
Narrowing Price Differential
SMS Still Dominates
Quality of Experience
Lack of Strong Business Model
Lack of Interoperability
Proprietary Nature of OTT Services
Fragmentation
D. VALUE CHAIN ANALYSIS
D.1 Operator Positioning
Operators in Developed Markets
Operators in Developing Markets
Nedjma Net
Mobily Roamtalk
Operators Pressure Handset OEMs Over RCS-e
RCS-e-Enabled Handsets
GSMA Accreditation
Lack of OEM Incentives
Apple
D.2 OS Platform Positioning
D.3 OTT Provider Positioning
Pre-installation on Handsets
Palringo & WhatsApp
Facebook
Skype
D.4 Instant Messaging Service Providers
WhatsApp
Over-the-Top Communications: Threats & Opportunities for Mobile Operators
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Platform support
Features
OTT Cannibalisation
Production Positioning
Revenue Model
Outlook
BlackBerry Messenger
Features
Evolution towards Consumers
OTT Cannibalisation
Revenue Model
Outlook
D.5 VoIP Service Providers
Nimbuzz
Features
Revenue Model
Case Study: Nimbuzz on Telkomsel
Outlook
Pinger
OTT Cannibalisation
Revenue Model
Viber
Features
Product Positioning
Revenue Model
Outlook
E. OPERATOR STRENGTHS & WEAKNESS IN THE OVER-THE-TOP MARKETPLACE
E.1 Strategy Options
Operator Decision Matrix
E.2 Operator Anti-OTT Strategies
Blocking & Shaping
Over-the-Top Communications: Threats & Opportunities for Mobile Operators
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Restrictions at the National Level
Traffic Shaping & Packet Inspection
Vodafone UK
T-Mobile Germany
E.3 Charging For OTT Communications
T-Mobile’s VoIP Premium
TeliaSonera
Indirect Charging
Case Study: Telefonica Leverages OTT in Colombia
Price Competition
Large Bundled Tariffs
Case Study: Nawras Response to WhatsApp
SMS Fall-back
Pricing Outlook
E.4 Partnering
3UK & Skype
KDDI & Skype
Vodafone & Facebook
Orange & Google’s Gmail SMS Chat
ForgetMeNot
E.5 Creating Operator-owned OTT Services
Case Study: Telefonica
Telefonica Launches TU Me
TU Me Features
Jajah VoIP Services
O2 Connect
F. OVER-THE-TOP BUSINESS MODELS
F.1 Freemium
Skype
F.2 Advertising
Nimbuzz
InnerActive
Over-the-Top Communications: Threats & Opportunities for Mobile Operators
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F.3 Paid-For Download
Viber & WhatsApp
F.4 VoIP Billing
Yoigo
Procera
F.5 Virtual Goods Market
G. RICH COMMUNICATIONS SUITE
G.1 Rich Communications Suite
Enhanced RCS
The Joyn Initiative
Operator Hopes for RCS-e
RCS-e-Enabled Handsets
Handset Conformance Requirements
RCS-e Challenges
Release Lead Times
Installed Base of OTT Users
Native Handset Support
Handsets Availability
Handset Performance
Non-Compliant Services
Clarity of Proposition
Legacy Networks
G.2 Closing the Gap for Feature Phones
Case Study: China Mobile’s 139.com
H. MARKET SIZE & FORECASTS
VoIP
Messaging
RSC-e
H.1 Mobile Services Market
Voice & Data Revenues
H.2 OTT Communications Market
Mobile VoIP
Global Mobile VoIP Revenues
Regional Mobile VoIP Revenues
Global Mobile VoIP Users
Regional Mobile VoIP Users
Mobile VoIP Volumes
Destruction of Value
Mobile Messaging
Global Mobile IM Volumes
Mobile IM Users
Regional Mobile IM Users
Mobile IM Revenues
RCS-e Services
Regional RCS-e Users
I. CONCLUSIONS
List of Figures
Figure 1 - Vodafone’s mobile service revenue mix for Europe: 1Q 2011/12
Figure 2 - Correlation between smartphone penetration and lower SMS traffic for KPN
Figure 3 - Mobile data usage by application
Figure 4 - Global smartphone penetration: 2012 - 2016
Figure 5 - Group chat on Facebook Messenger
Figure 6 – Most frequently used app categories
Figure 7 - Over-the-top value chain
Figure 8 - Mobile users of OTT instant messaging services for US market
Figure 9 - WhatsApp platform support
Figure 10 - Viber’s features
Figure 11 - Viber app downloads: 2012
Figure 12 - Summary of operator strengths and weaknesses in the OTT communications market 46
Figure 13 – Operator over-the-top strategy decision matrix
Figure 14 - The 3 Skype phone
Figure 15 - Vodafone’s 555 Facebook handset
Figure 16 - Telefonica’s TU Me
Figure 17 - User flow: RCS-e and OTT IP services compared
Figure 18 - Global mobile voice and data revenues: 2012 - 2016
Figure 19 - Global mobile voice and revenues as proportion of total revenues: 2012 - 2016
Figure 20 - Global mobile VoIP and circuit-switched revenues: 2012 – 2016
Figure 21 - Global mobile VoIP revenues, by region: 2012 – 2016
Figure 22 - Global mobile VoIP users as a proportion of all voice users: 2012 – 2016
Figure 23 - Global mobile VoIP and circuit-switched users: 2012 – 2016
Figure 24 - Mobile VoIP users, by region: 2012 – 2016
Figure 25 - Global mobile VoIP volume as proportion of all voice traffic: 2012 – 2016
Figure 26 – The Skype affect on carrier traffic: 2007-2011
Figure 27 - Global mobile IM volume as proportion of all messaging traffic: 2012 – 2016
Figure 28 - Global mobile IM and SMS volumes: 2012 – 2016
Figure 29 - Global mobile IM and SMS users: 2012 – 2016
Figure 30 - Global mobile IM user as a proportion of all messaging users: 2012 – 2016
Figure 31 - Mobile IM users, by region: 2012 – 2016
Figure 32 - Global mobile IM and SMS revenues: 2012 – 2016
Figure 33 - RCS-e users as a proportion of all IM users and VoIP users: 2012 – 2016
Figure 34 - Global RCS-e users: 2012 – 2016
Figure 35 – Global RCS-e users, by service type: 2012 – 2016
Figure 36 - RCS-e users, by region: 2012 – 2016

 

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