Communication being ubiquitious and IP-based solutions taking increasingly a bigger part in it, this market still remains essential despite decreasing revenues.

This report provides analyses on quantitative changes until 2020, in terms of usages and revenues. It also describes the latest trends, the re-positioning of telcos in an OTT world.

Key Questions

• What will be the key trends in communication by 2020? Will the total revenue pie of communication shrink or grow?
• How are telco margins evolving for communication? Simple substitution from fixed to mobile or revenue loss?
• In terms of usages, how will communication services evolve until 2020? What about OTT VoIP & SMS?
• What are the impacts of new technologies such as WebRTC or RCSe?
• Can telcos recover their territory from OTT players? Moreover, how much territory are they really losing, if any?

Table Of Contents

Contents

1. Executive Summary . 7

1.1. The six key trends shaping the market 8
1.2. Key developments in usage of communication services 9
1.3. The quantification of the communication market . 10

2. Methodology 12

3. Communication 2020 in figures 14

3.1. Key usage developments by 2020 14
3.1.1. Mobile users still much more dominant than OTT VoIP users 14
3.1.2. Messaging users of both telcos and OTTs expected to grow 15
3.1.3. Number of SMS sent still set to grow, but OTT messages are rapidly catching up16
3.2. The quantification of communication revenue by 2020 . 18
3.2.1. Overall communication services market expected to see very slight decline over
eight years from 2012 to 2020 18
3.2.2. Increase in mobile communication revenues cannot compensate for the decline in
fixed communication revenues . 20
3.2.3. Increase in telco messaging revenues cannot compensate for the decline in telco
voice revenues . 24
3.2.4. OTT communication revenues cannot compensate for decline in telco
communication revenues . 28

4. The six key trends in communication . 32

4.1. The aggregation of communication types 32
4.1.1. Introduction . 32
4.1.2. Facebook . 32
4.1.3. Google 34
4.1.4. WhatsApp 35
4.1.5. Apple . 35
4.1.6. Operators . 36
4.2. Beyond traditional communication for telcos 37
4.2.1. Introduction . 37
4.2.2. Operators providing their own OTT service 37
4.2.3. Partnerships between OTT and operators 39
4.2.4. joyn (RCSe) 40
4.3. Voice and messaging becoming a telco commodity 43
4.3.1. Introduction . 43
4.3.2. Mobile voice and messaging offered in abundance 43
4.3.3. Fixed voice and Internet access also unlimited 44
4.3.4. Bundling it all for an even cheaper experience . 45
4.4. Mobile data and WiFi makes strong case for OTTs 46
4.4.1. Introduction . 46
4.4.2. Unlimited mobile data still rare 46
4.4.3. WiFi over mobile allows unlimited OTT communication including video 47
4.5. The rise of video communication . 48
4.5.1. Introduction . 48
4.5.2. Telco video communications . 48
4.5.3. OTT video communications 48
4.6. Genuinely free OTT offers in exchange of user data . 52
4.6.1. Introduction . 52
4.6.2. Free or low-cost OTT services 52
4.6.3. Advertising and data usage 53



Tables

Table 1: Communication providers aggregating communication types . 8
Table 2: Communication providers aggregating communication types 32



Figures

Figure 1: Fixed telephony lines, mobile subscriptions and OTT VoIP users forecast, USA, 2012-
2020 . 9
Figure 2: Number of messages sent forecast by type, EU5, 2012-2020 . 10
Figure 3: Total communication revenue forecast by market segment, EU5 2012-2020 10
Figure 4: Telco revenue forecast by market segment, EU5, 2012-2020 . 11
Figure 5: Fixed telephony lines, mobile subscriptions and OTT VoIP users forecast, USA, 2012-
2020 14
Figure 6: Fixed telephony lines, mobile subscriptions and OTT VoIP users forecast, EU5, 2012-
2020 15
Figure 7: Messaging users forecast by type of message, USA, 2012-2020 15
Figure 8: Messaging users forecast by type of message, EU5, 2012-2020 16
Figure 9: Number of messages sent forecast by type, USA, 2012-2020 16
Figure 10: Share of messages sent, USA, 2012 and 2020 17
Figure 11: Number of messages sent forecast by type, EU5, 2012-2020 . 17
Figure 12: Share of messages sent, EU5, 2012 and 2020 18
Figure 13: Total communication revenue forecast by market segment, USA, 2012-2020 19
Figure 14: Total communication revenue share by market segment, USA, 2012 and 2020 19
Figure 15: Total communication revenue forecast by market segment, EU5, 2012-2020 . 20
Figure 16: Total communication revenue share by market segment, EU5, 2012 and 2020 . 20
Figure 17: Telco fixed and mobile communication revenue forecast, USA, 2012-2020 . 21
Figure 18: Total fixed telco revenue forecast (both communication and Internet and data), USA, 2012-
2020 21
Figure 19: Total mobile telco revenue forecast (both communication and Internet and data), USA,
2012-2020 22
Figure 20: Total telco revenues forecast (fixed and mobile, communication and noncommunication),
USA, 2012-2020 . 22
Figure 21: Telco fixed and mobile communication revenue forecast, EU5, 2012-2020 . 23
Figure 22: Total fixed telco revenue forecast (both communication and Internet and data), EU5, 2012-
2020 23
Figure 23: Total mobile telco revenue forecast (both communication and Internet and data), EU5,
2012-2020 24
Figure 24: Total telco revenues forecast (fixed and mobile, communication and noncommunication),
EU5, 2012-2020 . 24
Figure 25: Telco fixed voice, mobile voice and messaging revenues forecast, USA, 2012-2020 . 25
Figure 26: Share of messaging revenue, USA, 2012 and 2020 . 25
Figure 27: SMS and other messaging services revenues forecast, USA, 2012-2020 . 26
Figure 28: Share of SMS and other messaging services revenues, USA, 2012 and 2020 26
Figure 29: Telco fixed voice, mobile voice and mobile messaging revenue forecast, EU5, 2012-
2020 27
Figure 30: Share of messaging revenue, EU5, 2012 and 2020 . 27
Figure 31: SMS and other messaging services revenues forecast, EU5, 2012-2020 . 28
Figure 32: Share of SMS and other messaging services revenues, EU5, 2012 and 2020 28
Figure 33: OTT communication revenue forecast by segment, USA, 2012-2020 . 29
Figure 34: Share of OTT communication revenue by segment, USA, 2012 and 2020 29
Figure 35: Comparison of telco and OTT communication revenues, USA, 2012-2020 30
Figure 36: OTT communication revenue forecast by segment, EU5, 2012-2020 . 30
Figure 37: Share of OTT communication revenue by segment, EU5, 2012 and 2020 31
Figure 38: Comparison of telco and OTT communication revenues, EU5, 2012-2020 31
Figure 39: The new look of Facebook messages . 33
Figure 40: Bobsled, by T-Mobile, allows voice calls on Facebook chat . 33
Figure 41: Video-calling option within Facebook 34
Figure 42: FaceTime from Apple 36
Figure 43: Media Centre Cloud service by Deutsche Telekom 36
Figure 44: The TU Me app by Telefonica 37
Figure 45: Key features of the Bobsled app by T-Mobile USA 38
Figure 46: International Favourites, by O2 UK 38
Figure 47: The Skype-on-Three offer which incurs no data charges 39
Figure 48: Skype on KDDI 39
Figure 49: WhatsApp offering from Three Hong Kong 40
Figure 50: The ‘joyn’ service, led by the GSMA . 41
Figure 51: OEM ecosystem for joyn . 42
Figure 52: Orange France mobile plans offer unlimited calls and SMS in their cheapest plans . 44
Figure 53: BT offers unlimited calls (national) and Internet 44
Figure 54: Quadruple bundle from Orange, further commoditising voice and messaging . 45
Figure 55: Penetration of bundled services in European households . 46
Figure 56: A comparison of Sprint, ATandT and Verizon's smartphone data plan, by Sprint 47
Figure 57: Video call tariffs 48
Figure 58: A FaceTime video communication between an iPhone user and an iPad user 49
Figure 59: A Skype video communication using the Skype application . 49
Figure 60: An example of WebRTC integration for video calls on Google Chrome . 50
Figure 61: A GTalk video chat (using the Flash plug-in) 51
Figure 62: A Windows Live Messenger window with an ad at the bottom 52
Figure 63: Falcon Pro for Twitter sold inn the Google Play app store at 0.79 EUR 53
Figure 64: WhatsApp Messenger price information before downloading the app . 53
Figure 65: Facebook targeted advertising on the user’s wall . 54

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