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OTT Mobile Voice Revenues to Top US $10 Billion by 2020

OTT Mobile Voice Revenues to Top US $10 Billion by 2020

OTT voice providers are expected to see their service revenues increase fivefold by 2020, to over US $10 billion, according to a new study from U.K.-based Juniper Research. The study forecasts that providers of OTT services such as Skype and WhatsApp will experience a significant rise in traffic and greater potential to generate revenue as 4G/LTE rollouts continue and accelerate. The study also observed that with traditional operators’ voice revenues in decline as a result of OTT voice activity, a number of them have adopted new business models that emulate those of OTT players. These include offering functionalities such as VoLTE and Wi-Fi calling through the handset.

Tarifica’s Take

The prediction that OTT players will be generating such a large amount of revenue within the next half decade is quite significant, in light of the fact that up until now only a small minority of the OTT players have been successful at deriving serious revenue from voice services, due to the fact that they are generally offered either free of charge or at low cost. The primary financial impact of OTT players in the voice-calling market to date has been to deprive MNOs of their revenues rather than to generate much of their own. Nonetheless, a change appears to be looming, driven in large part by the expansion of 4G networks. As high-speed connectivity becomes the norm, OTT voice services will be able to achieve a high quality of voice transmission, which is likely to be persuasive in attracting users. And an improvement in voice quality could be a justification for increasing the price of service. Of course, that would tend to level the playing field between OTT providers and MNOs, especially if MNOs continue to offer services that take a page from the OTT book.