June 24, 2014
Analyst house Citi has predicted that the shift from traditional mobile telephone calls to calls made over the Internet will be the "biggest transformation of mobile since its inception."
Whilst that statement may be stating the obvious somewhat, it's a fair assessment that the rise of mobile voice over IP (mVoIP) will redefine the telco market.
Citi also estimates that telecom operators in Europe still generate more than 50% of their revenues from voice services, and it believes that, in the future, calls would be worth 97% less if conducted over the Internet.
Obviously, mVoIP isn't new. However, the announcement from WhatsApp that it's planning to add free voice-calling for iPhone and Android means that mVoIP is set to explode -- after all, WhatsApp already boasts more than 145 million users for its messaging app.
So what exactly is the mVoIP threat to the telco industry? And how should operators react and potentially adapt their business models?
The most important fact the industry must accept is that technology is evolving and operators cannot stand idly by. It shouldn't be a case of the "old" verses the "new" -- the industry has to embrace the change and adapt.
There are already great examples of operators using these new technologies to innovate. Traditional operators such as E-Plus Service GmbH & Co. KG (Germany), Bharti Airtel Ltd. (Mumbai: BHARTIARTL) (India) and T-Mobile US Inc. are already believed to be partnering with app developers. One of the most popular OTT mVoIP apps is also understood to be conducting trials with operators, whereby calls from the PSTN made to the user's regular mobile number can be intercepted and delivered to the app via WiFi, 3G, or LTE data, instead of via the traditional voice channel.
It's also worth bearing in mind that Juniper Research recently suggested that OTT providers, having reached a critical mass of subscribers with the provision of free services, may be open to "revenue-share partnerships to create a viable revenue stream in the future." As mVoIP is, in reality, still in its infancy, there is a huge opportunity for operators to help define the trajectory and the potential partnership parameters.
At the moment, operators wield a great deal of power: They need to use this, and act as a willing gateway between the old world of the PSTN and the new world of mVoIP -- working together with OTT service providers can help protect against revenue loss.
The alternative is risky, as they may be cut out altogether, shunned by consumers as "dinosaur" technology.
Instead of writing off their traditional voice networks and plowing all their efforts into trying to develop the next big thing, operators should concentrate on thriving, instead of just surviving, in this brave new world.
— Alex Kinch, CEO, Ziron
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