Telcos lose billions to OTT messaging

Ovum has put a dollar figure on the estimated threat to messaging revenue posed by OTT social messaging service providers.
The research firm expects operators to have lost $23 billion (€17.7 billion) in missed SMS revenues in 2012 as a result of competition from OTT players, and predicts losses will grow to a whopping $54 billion by 2016.
Ovum has called on operators to pursue collaborations with handset manufacturers if they wish to remain relevant in the messaging industry.
APAC and European operators will be the most affected by smartphone social messaging services, Ovum warns, and must not ignore OTT messaging activity.
“Social messaging is becoming more pervasive, and operators are coming under increased pressure to drive revenues from the messaging component of their communications businesses,” Ovum consumer telecoms analyst Neha Dharia says, adding. “Operators need to understand the impact of social messaging apps on consumer behavior, both in terms of changing communication patterns and the impact on SMS revenues, and offer services to suit.”
Social messaging app WhatsApp has been gaining traction in markets including Singapore and the Netherlands, and smaller players such as textPlus and Pinterest also have the potential to disrupt the messaging business model, Ovum cautions.
“OTT players are changing consumers' messaging preferences, and the pressure they are exerting on operators’ messaging services is forcing them to offer increased SMS bundles and to experiment with messaging pricing models, further dampening revenue growth,” Dharia notes.