OTT voice/text strategy options for APAC cellcos

Sherrie Huang/Analysys Mason
08 Jun 2016

In many Asia-Pacific countries, OTT communication apps are replacing core telecoms services such as messaging and voice, and this will continue according to our forecasts.

Messaging is the most popular OTT communication service, but paid-for VoIP has achieved significant adoption. Operators must manage this transition and establish their positions in new areas.

SMS continues to be relevant, and we expect OTT messaging and SMS to co-exist for some time, but OTT services dominate in terms of usage and client engagement time.

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Operators need to offer generous SMS allowances and fine-tune the price of extra SMS usage in order to make OTT messaging less attractive to consumers. Other strategy options include collaborating with OTT players in partnerships or through enablement, or actually becoming an OTT player by offering OTT or next-generation services.

Operators need to assess their positions and review strategies to shift value towards data and new services at the time and pace that suits them, while managing legacy revenue streams.

OTT messaging rules

We forecast OTT messaging to have 1.63 billion users in 2018 in Asia-Pacific. The population penetration rate will reach almost 100% in developed Asia-Pacific markets, and 30% in EMAP by 2018.

Traffic from messaging apps is growing and replacing that of traditional SMS services, as a result of improved user experience and freedom from price constraints. OTT messaging and SMS will co-exist in the long term.

OTT VoIP services were used by 17% of smartphone owners in Asia-Pacific in 2013 and generally have much lower penetration levels than IP messaging services. We expect OTT VoIP penetration to increase to 28.5% by 2018. Take-up levels will vary significantly by country and region - LTE will be a key enabler because it enables a better VoIP user experience.

In the face of the threat to traditional voice services, operators can make small adjustments to the price of voice in order to deter consumers from migrating to VoIP. Some may choose to offer their own operator-led VoIP services. The relatively low MoU in developed Asia-Pacific, which was unrealized on legacy services, will increase as voice finds new applications and gets integrated in to cheaper platforms.

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