OTT Messaging, VoIP Apps Threaten to Marginalize Operators

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Results of a new study might concern some service providers about the future of revenue from traditional text messaging (SMS).

Nearly half (45 percent) of smartphone owners use some form of instant messaging (IM) or over-the-top (OTT) messaging app in addition to – and in some cases instead of – texts, according to a new report examining consumer smartphone voice and messaging trends from Analysys Mason.

The report, "Consumer smartphone usage: voice and messaging trends," is based on data derived from Arbitron Mobile’s passive on-device monitoring app, which monitored more than 1000 smartphone users (‘panelists’) in France, Germany, Spain, the U.K. and the U.S.

The report shows that WhatsApp Messenger is the first large-scale cross-platform messaging app; nearly 20 percent of the panelists used it during the two-month observation period. However, OTT communication apps have succeeded in replacing operator services in only a small proportion of cases; only 1.7 percent of the panel used IM/OTT messaging without using SMS, but 97 percent used SMS.

“The relative fragmentation of the messaging market (compared to, for example, Skype’s dominance of the VoIP market) will continue to hinder full substitution," said Stephen Sale, co-author of the report and lead analyst for Analysys Mason’s Voice and Messaging research program. “However, while the messaging market is fragmented, the collective effect is having an impact on SMS usage; the number of text messages sent per active user is already declining in some Western countries."

Skype continues to dominate the VoIP market; 79 percent of VoIP users on the panel used the service, making it the default VoIP provider. The main challengers to Skype are Viber, fring and Google Talk.

Alarmingly for operators, some smartphone users are beginning to use VoIP apps as their primary voice service; approximately 20 percent of VoIP users used mobile VoIP more than traditional voice services.

“As more people use VoIP as their primary voice service, the danger for mobile operators is that they become relegated to providing secondary voice services, picking up the 30 percent or 40 percent of call traffic generated by users when contacting people who are outside their core calling circle," added Sale. “If this occurs widely, operators’ roles will be marginalized."

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