Telcos to lose $US386bn as a result of OTT services: Ovum

Telcos to lose $US386bn as a result of OTT services: Ovum

This "reality" to hit international call revenues hardest

Telecommunications providers will suffer a $US386 billion loss between 2012 and 2018 at the hands of over-the-top (OTT) voice over IP (VoIP) solutions, according to Ovum.

Much of these losses will come from international call revenues, including roaming.

In its new Consumer OTT VoIP Outlook: 2013 to 2018 forecast, the analyst firm said the consumer OTT VoIP market is thriving. Traffic is expected to grow by a compound annual growth rate (CAGR) of 20 per cent between 2012 and 2018, reaching 1.7 trillion minutes in 2018.

Logically, improvements in the availability and speed of broadband network will be the key driver, alongside the growing capability of mobile devices and computers, and social media.

If the current trajectory is maintained, Ovum said it expects telcos to lose $US63bn in voice revenues in 2018 as customers flock to free OTT VoIP solutions. This is a reality telcos will be forced to live with, Ovum principal analyst, Emeka Obiodu, said.

"The use of VoIP will grow increasingly over the next five years to become the underlying technology for delivering voice over telecoms infrastructure," Obiodu said.

"Blocking these services, entering into alliances, or trying to out-compete OTT players using services such as Joyn are not going to stem the OTT VoIP tide. Instead, we encourage telcos to neutralise the price arbitrage that makes OTT VoIP services appealing."

In North America, telcos have been able to secure revenues while leaving customers to use whichever VoIP services they desire despite offering unlimited voice bundles. Western Europe and developed Asia will all lose revenues for VoIP calls that originate from their fixed broadband infrastructure.

“While these early initiatives have been for postpaid customers, Optimus Portugal's WTF tariff has extended the unlimited voice bundle plan to prepaid customers," Obiodu said. "This is a trend we expect to spread through the telecoms market as telcos adjust their pricing strategies to charge for metered data rather than metered voice."

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Tags voipTelcoTelecommunicationsovumvoice over IPanalystOTTover-the-top

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