Carrier LTE Application Strategies to Combat OTT Players and Services
Over-the-Top (OTT) applications are those that are provided via the Internet in which only a data connection is required. The wireless carrier is not directly involved and only recognized indirect revenue due to data usage. OTT players and applications have grown to become a significant threat to core services for network operators, most notably voice and messaging. Carriers do not discriminate what is being carried over the data channel and are satisfied (from a data service revenue perspective) to just sign up as many data users as possible.
LTE brings rather significant capacity gains to the mobile networks, which translates into more bandwidth to offer, more subscriptions to sell, more data consumed, and more data revenue for the carriers. On the demand side, bear services, particularly data, continues to grow at a healthy pace, but there are limits to growth in bearer service for consumer and even enterprise usage. In addition, there is an increasing awareness of Internet Protocol (IP) being cheap source of transport, and hence more people becoming aware of VoIP, and therefore OTT alternatives.
There is a big migration underway from traditional voice to data. This is not to mean that voice goes away in favor of only non-voice services. What this really means is that traditional circuit-switched (bearer) is going away, and eventually with it, traditional voice calling plans. With this evolution of bearer services becoming marginalized, the payload itself becomes the value and the simple carriage of data becomes a marginalized commodity. With this development, Value-added Service (VAS) applications become much more important to the network operators. Carriers can either sit idly by while this happens or take proactive action. We recommend the latter !!
This research evaluates the OTT threat to wireless carriers and provides specific strategies and recommendations to compete and win in the marketplace. The report evaluates the general market drivers for VAS applications and the competitive factors issues relative to OTT player offerings. The report includes analysis of LTE enabled application benefits and challenges and presents an application roadmap.
The report also includes forecasts from 2013 – 2018 for every major VAS application category including:
- Mobile Data
- Voice over LTE (VoLTE)
- Rich Communication Suite (RCS)
- Mobile Advertising
- API-based Apps
- Social Networking
- Coupons and Loyalty
- Mobile Gaming
- Mobile Virtual Goods
- Video, TV, and Second Screen
- Mobile Health
- Mobile Entertainment
- Machine-to-Machine (M2M)
- Connected Vehicles
- Public Safety
- Messaging (non RCS)
- Small Cell Targeted Advertising
- OSS/BSS Solution Providers
- Mobile Network Operators
- Mobile Software Developers
- Mobile Payment Service Providers
- Handset and Tablet Manufacturers
- Content and Applications Mediators
- Social Commerce Vendors and providers
- Mobile Marketing and Advertising Providers
- Telecommunications Infrastructure Providers
Key Report Findings:
- Forecast for every major LTE VAS application 2013- 2018
- Strategies and recommendations for wireless carrier apps
- Identify the logical carrier roadmap for LTE-enabled applications
- Identify threats to carrier’s core services and their response options
- Understand the benefits and challenges of LTE-enabled applications
- Identify strategies for network operators to deal with OTT applications
- Understand the emerging role of Personal Cloud Services for carrier customers
- Identify emerging opportunities including Connected Vehicles and Small Cell Advertising
- Understand the role and importance of telecom and enterprise APIs for carrier VAS applications
- Carriers must leverage the Cloud and APIs to deploy their own VAS applications
- The first VAS in the post-VoLTE era is RCS and it will lead to API development and integration
- Network operators must deal with the threat of these "dial around" voice over wireless IP (or VoIP over Wireless OTT)
- Partnerships such as API integration for Enterprise Dashboard will lead to improved customer loyalty as well as carrier profits
- Leading VAS (such as Mobile Health with projected $10B revenue by 2018) represent significant margin enhancement opportunities for carriers
Mind Commerce Publishing's research methodology encompasses input from a wide variety of sources.
We rely heavily upon our Subject Matter Experts (SME) in terms of their market knowledge, unique perspective, and vision. We utilize SME industry contacts as well as previous customers and participants in our market surveys and interactive interviews.
In addition, we rely upon our extensive internal database, which contains modeling, qualitative analysis, and quantitative data. We review secondary sources and compare to our primary sources to update previous findings (for prior version reports) and/or compile baseline information for technology and market modeling.
We share preliminary models with industry contacts (select previous clients, experts, and thought leaders) to verify the veracity of initial modeling. Prior to final report production (analysis, findings, and conclusions), we engage in an internal review with internal SMEs as well as cross-expertise, senior staff members to challenge results.
We believe that forecasts should be prepared as part of an integrated process which involves both quantitative as well as qualitative factors. We follow the following 3-step process for forecasting.
Step 1 - Forecasts Input:
The inputs for the present and historical revenues are derived from industry players. Financial and other quantitative data for individual sub-market categories are derived from original research and tested with interviews with major industry constituents.
Step 2 - Forecasting of Future Years:
Mind Commerce extends forecasts based on a variety of factors including demand drivers as well as supply side data. Key success factors and assumptions are considered.
Step 3 - Validation of Data:
The final step is to validate projections, which is accomplished in consultation with both internal and external industry experts, including both topic and regional experts. Adjustments are made to the forecasts based on factors identified throughout this process.