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New services from device, operating system (OS) and app providers are changing the way we communicate on mobile devices. This report looks at the major drivers in the market, outlines the major players' strategies and assesses the long-term prospects for mobile operators in this market.

About this report

- This forecast report assesses the impact of over-the-top (OTT) mobile communication services on mobile network operators’ (MNOs’) core KPIs.
- This report provides:
- forecasts for traditional and next-generation voice and messaging services, worldwide and for 8 regions, including country-level data for 47 countries. Forecasts are split between circuit-switched (CS) voice and messaging services and IP-based services.
- splits for operator-provided services and non-operator/OTT services. User numbers and traffic volumes are presented for IP-based services for operators (including initiatives such as VoLTE, RCS and proprietary approaches) and non-operator/OTT services.
- discussion of major trends in the mobile voice and messaging market. Analysis of emerging business models, end-user trends and the responses from major players, including MNOs.

Table Of Contents

The OTT communication services worldwide: stakeholder strategies
Contents
Executive summary
Executive summary [1]
Executive summary [2]
Executive summary [3]
Recommendations
Key recommendations [1]
Key recommendations [2]
Trends in OTT communication services
Players from across the mobile value chain are displacing operators as the sole providers of communication services
Communication services are increasingly supported by indirect business models
As communication service feature sets broaden, operators' traditional portfolios look increasingly weak
Messaging services are already used by more than half of smartphone owners worldwide, and adoption is growing rapidly
Profiles of major OTT players
A number of fast-growing specialists are joining the Internet giants in targeting the communication services market
Google has revamped its offering with Hangouts and is integrating communications capabilities ever deeper with Android
Facebook is making aggressive moves in mobile - communication services are a major focus
Apple is integrating its own communication services with the iPhone, thereby disintermediating the operator
WhatsApp is focused on providing a specialist messaging service to a large installed base
Skype retains its position as market leader in VoIP and closer integration with Nokia devices is likely
WeChat is driving international growth with high-profile advertising campaigns
Line is an example of the new generation of 'social messengers' that are transforming messaging and social networking
KakaoTalk successfully monetises its communications with a wide range of complementary premium services
BlackBerry continues to be a significant force in some countries and hopes that opening BBM to other platforms will revive the service
Operator responses
Operators are responding with a variety of approaches
Blocking OTT services is largely counterproductive but many stakeholders persist with this approach nonetheless
Operators can use pricing levers to limit the appeal of alternatives, but the window of opportunity is closing
Partnership models are increasingly common, but the motivation is stronger among those operators with less to lose in legacy services
The GSMA is promoting RCS as the industry's collective strategy to countering cannibalisation of messaging revenue ...
... but serious questions remain about the ability of RCS to perform its designated role, and of operators to capitalise on it
VoLTE is probably RCS's best chance of making any meaningful impact
VoLTE deployments are being driven by cost efficiencies - next-generation voice strategies are a secondary consideration
Many promising initiatives in next-generation communications have been proprietary 'telco OTT' services
Telco OTT initiatives are refocusing on adding value to the operator's customer base
Market outlook
OTT messaging services are transforming the user experience and are expected to cement their dominance of the messaging market
OTT voice services are expected to gain more traction, but are unlikely to pose the same level of threat to operators as messaging apps
Operators must not be complacent in the voice market - they need to address vulnerabilities and improve the user experience
The poor outlook for operators' consumer messaging services suggests that they should focus on other opportunities
When preparing investment cases, operators need to properly assess the value of 'retaining relevance' in communication services
The revenue outlook is uncertain, but the platform business model offers welcome wholesale opportunities for operators
About the author and Analysys Mason
About the author
About Analysys Mason
Research from Analysys Mason
Consulting from Analysys Mason

List of figures

Figure 1: Representation of the mobile value chain
Figure 2: Examples of different business models in the OTT communication services market
Figure 3: Comparison of communication services and supporting business models
Figure 4: Smartphone penetration of OTT VoIP and IP messaging services, worldwide, 2010-2013
Figure 5: Major non-operator communication services players
Figure 6: Google Hangouts and Nexus 5 screenshots
Figure 7: Facebook Messenger and Facebook Home screenshots
Figure 8: iMessage and FaceTime audio screenshots
Figure 9: WhatsApp Messenger screenshots
Figure 10: Skype on Windows Phone screenshots
Figure 11: WeChat screenshots - 'Shake' feature and Sticker Shop
Figure 12: Line screenshots
Figure 13: KakaoTalk screenshots - Plus Friend and Gift Shop
Figure 14: BBM for BlackBerry and iPhone screenshots
Figure 15: Operator responses to competition from OTT players in the communication services market
Figure 16: Regulator approaches to OTT services in selected countries
Figure 17: Penetration of unlimited SMS bundles and IP messaging apps on smartphones, and average SMS usage per active SIM, selected countries
Figure 18: Examples of partnerships between operators and OTT service providers
Figure 19: RCS deployments at November 2013
Figure 20: RCS specification roadmap at November 2013
Figure 21: Selected VoLTE announcements
Figure 22: Major propositions addressed by 'telco OTT' initiatives
Figure 23: Screenshots from O2 UK's TU Go and Orange's Libon (Sosh implementation)
Figure 24: Active users of OTT messaging services on smartphones, by region, 2010-2018
Figure 25: Messaging traffic originated on mobile handsets, by type, worldwide, 2010-2018
Figure 26: Active users of OTT VoIP applications on smartphones, by region, 2010-2018
Figure 27: Voice traffic originated on mobile handsets, by type, worldwide, 2010-2018
Figure 28: Operators' position in key areas of the mobile value chain
Figure 29: Distribution of apps by number of users and potential opportunities for API providers

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