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Carrier LTE Application Strategies to Combat OTT Players and Services

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
  • Geo-location
  • 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
Target Audience:
  • 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
Report Benefits:
  • 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
Key Report Findings:
  • 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

General Methodology

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.

Forecasting Methodology

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.

1.0 Executive Summary
2.0 Introduction
2.1.1 What Is Over-the-top (Ott) And Its Impact?
2.1.2 Ott Trends
2.1.3 The Carrier Imperative
3.0 Carrier Challenges
3.1 Spectrum Availability
3.2 Capex Budgets
3.3 Is More Capacity Better?
3.3.1 Advantages
3.3.2 Disadvantages
3.4 The Fight Against Ott Players
3.4.1 Ott Voice
3.4.2 Ott Messaging
3.4.3 Carriers To Fight Back
3.5 The Drivers For New Applications
4.0 Lte Application Strategy
4.1 Prepare For Much More Data Usage
4.1.1 Biggest Factor In Mobile Data: Mobile Video
4.1.2 Mobile Video Forecast
4.2 Prepare For Increasingly More Services In The Cloud
4.2.1 The Role Of Incumbent Network Operators In Mobile Cloud
4.2.2 Mobile Data In The Cloud Forecast
4.3 Prepare For Increasingly Marginalized Core Services
4.3.1 Marginalization Drives The Need For Value-added Services
4.3.2 Valued Services Include Commerce, Content And Apps
4.4 Prepare For Deployment Of Value-added Services
4.4.1 What Is A Value-added Service (Vas)?
4.4.2 Relationship Of Vas To Other Services
4.4.3 Why Are Vas Important?
4.4.4 The Vas Supply Chain
4.4.5 Carrier Planning For Vas Applications
5.0 Lte Application Roadmap
5.1 Video
5.1.1 More Of The Same: Only Faster
5.1.2 Video Call
5.1.3 Lte Video Broadcast
5.1.4 Mobile Tv In Lte
5.2 Voice Over Lte (Volte)
5.2.1 Gsma Volte Iniatives
5.2.2 Alternatives To Volte
5.3 Rich Communications Services (Rcs)
5.3.1 Gsma Rcs Initiatives
5.3.2 Rich Calls
5.3.3 Rich Messaging
5.3.4 Rcs And Video
5.3.5 Dynamic Address Book (Dab)
5.4 Lte Direct
5.4.1 Direct Services
6.0 Lte Vas Market Outlook And Forecasts
6.1 Assumptions About Mobile Subscriptions And Mobile Data
6.2 Mobile Data
6.3 Mobile Advertising
6.4 Api-based Apps Downloads
6.5 Social Networking/Matching
6.6 Coupons, Loyalty And Venue-based Services
6.7 Geo-location Based Services
6.8 Mobile Gaming
6.9 Mobile Virtual Goods
6.10 Video, Tv, Pay-tv And Second-screen
6.11 Mobile Health
6.12 Music Services (Including Ringback And Ringtones)
6.13 Machine-to-machine (M2m)
6.14 Connected Vehicles
6.15 Public Safety Lte
6.16 Messaging, Texting, And Sms (Not Related To Rcs)
6.17 Small Cell Targeted Advertising
6.18 Miscellaneous Subscription Services
6.19 Forecast Summary And Comparative Analysis
7.0 Conclusions And Recommendations
7.1 Carriers To Offer Their Own “dialable Voip” Via Volte
7.1.1 Volte Issues And Deployment Constraints
7.1.2 Volte = Diable Voip = Voice Ott Killer And Vas Launchpad
7.2 Carriers To Develop Own Value-added Services (Vas)
7.2.1 Why Vas Applications?
7.2.2 The First Post-volte Vas: Rich Communications Suite (Rcs)
7.2.3 Rcs/Joyn® Status
7.2.4 Charging For Mvas
7.3 Carriers To Leverage Lte And Cloud For Vas Applications
7.3.1 The Cloud, Vas, And Disruptive Factors
7.3.2 Rise Of The Personal Cloud
7.4 Carriers To Leverage Telecom And Enterprise Apis For Own Vas
7.4.1 Carrier Business-to-business (B2b) Api Services
7.4.1 Carrier And Enterprise Apis For Business-to-business (B2b) Services
7.4.2 Carrier And Enterprise Apis For Business-to-consumer (B2c) Services
7.5 Carriers To Strategically Partner With Certain Ott Players/Solutions
8.0 Growth Drivers For Mobile Vas Applications
8.1 New Vs. Unproven Applications
8.2 Market Driver: Targeted Offerings And Premium Services
8.3 Internet Protocol And Web-based Applications
8.4 Next Generation Networks A Driver For Mvas
List of Graphs
Figure 1: Average Texting by User Segment
Figure 2: Smartphone Penetration and OTT Messaging
Figure 3: Video Usage by Screen Type
Figure 4: Mobile Video Forecast to 2017
Figure 5: Mobile Data in the Cloud Forecast to 2017
Figure 6: Mobile Commerce Continuum
Figure 7: Mobile Commerce Cycle
Figure 8: Mobile Commerce Cycle Jumps
Figure 9: Pull and Push Content Models
Figure 10: Value-added Services vs. Core Services
Figure 11: Worldwide Mobile Data Usage
Figure 12: Mobile TV Ecosystem
Figure 13: VoLTE Call Continuity
Figure 14: RCS, APIs, and Applications
Figure 15: RCS Statistics
Figure 16: Enhanced Address Book Benefits
Figure 17: RCS Application Integration
Figure 18: Evolution of Mobile Advertising
Figure 19: Mobile Coupons and Loyalty Cards
Figure 20: VoLTE Commitments and Deployments, GSA May 2013
Figure 21: Dynamic Address Book (DAM)
Figure 22: Legacy Services, RCS-e, and RCS5
Figure 23: Personal Cloud Services
Figure 24: ICT on Mobile/Cloud Platforms
Figure 25: Enterprise Dashboard
Figure 26: Enterprise Dashboard App Example
Figure 27: Integrating Applications and Content with RCS
Figure 28: New Apps vs. Proven Apps
List of Tables
Table 1: Mobile Subscriptions by 2G/3G and LTE, Subscriptions (M) 2013-2018
Table 2: Mobile Data per Subscription, by 2G/3G/LTE (M) PB, 2013-2018
Table 3: Carrier Data Revenue Usage Plans and LTE % $US (M) 2013-2018
Table 4: Mobile Advertising Revenues by Type and Device $US (M) 2013-2018
Table 5: Mobile Ad Revenue from LTE VAS, by Type/Device, $US (M) 2013-2018
Table 6: Mobile Apps Market (less Embedded Ads) from LTE, $US (M) 2013-2018
Table 7: Financial Milestones in Social Media
Table 8: Metrics, Tendencies, and Nuances in Mobile Social Networking
Table 9: LTE VAS Revenues from Social Networking Sites $US (M) 2013-2018
Table 10: Mobile Coupon Redemptions, LTE $US (M) 2013-2018
Table 11: Mobile Coupons, Loyalty Venue Based $US (M) 2013-2018
Table 12: Acquisitions/Partnerships in Location-Based Services
Table 13: Global Market Size of LBS $US (M) 2013-2018
Table 14: LTE Global Market Size of LBS $US (M) 2013-2018
Table 15: Global Gaming Apps and Ads Market $US (M) 2013-2018
Table 16: Global LTE Gaming Apps, Ads and Subscription $US (M) 2013-2018
Table 17: LTE Data (Video, Web Browsing, Mobile Games) $US (M) 2013- 2018
Table 18: Revenues from Mobile/LTE Virtual Goods, US$ (M) 2013-2018
Table 19: Multiscreen, Streaming TV and Pay TV, VOD, $US (M) 2013-2018
Table 20: Revenues from Mobile/LTE Health Services, $US (M) 2013-2018
Table 21: Subscribe/Download, Video, Ringtone/Ringback $US (M) 2013-2018
Table 22: M2M Connections and Revenues $US (M) 2013-2018
Table 23: Connected Automobile and Revenues $US (M) 2013-2018
Table 24: Points of Interest about the US Public Safety Including FirstNet
Table 25: Revenues from LTE Public Safety, $US (M) 2013-2018
Table 26: Revenues from LTE Texting (Discrete Service), $US Millions, 2013-2018
Table 27: Global Ad Revenues from Small Cells, US$ (M) 2013-2018
Table 28: Revenues from Miscellaneous LTE VAS, $US (M) 2013-2018
Table 29: LTE Value-added Services, Type of Service, $US (M) 2013-2018
Table 30: Major OTT Communication Service Providers
Table 31: LTE Value-added Services, Type of Service, $US Millions, 2013-2018
Table 32: Cloud Storage Providers
Table 33: Traditional PSTN vs. Internet Capabilities

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