Earlier this year it was revealed that more mobile users were sending messages via chat applications than traditional text messages. The popularity of WhatsApp, BlackBerry Messenger and iMessage was proved by analysts at Informa who estimated that last year almost 19 billion messages were sent per day on chat apps compared with 17.6 billion through SMS texts.
Already, that figure is likely to be significantly higher; WhatsApp chief executive Jan Koum told delegates at April’s ‘Dive into Mobile’ conference that they’re currently processing somewhere in the region of 20 billion messages every day, a figure which is comprised of some 8 million inbound and 12 billion outbound messages.
Confirmation of the shift from text to OTT services was greeted with glee by vice president of the European Commission, Neelie Kroes, who took to Twitter to proclaim that “the cash cow is dead”.
According to research firm Ovum, the cost to mobile operators around the world is considerable, with lost SMS revenue amounting to $23 billion. Kroes later clarified her tweet when she wrote that “mobile operators need to respond to what customers want, wants that may change quickly”.
IDC telecommunications senior research analyst Bhanu Chaddha says: “The ‘connected culture,’ with its availability of multiplatform and multiscreen services, is influencing consumer behaviour in terms of telecommunications preferences and that consumers are increasingly eschewing core telecom services, like SMS and voice, in favour of OTT services”.
Telecoms operators have a choice - they can collaborate or compete with OTT service providers. Chaddha says operators in the Middle East are taking both approaches. While incumbent operators in Saudia Arabia (STC), the United Arab Emirates (Etisalat) and Qatar (Ooredoo) are competing with OTT providers by either extending their IP TV services to OTT platform or by emulating popular OTT services, newer entrants to the market such as Saudi Arabia’s Mobily and Nawras in Oman have collaborated with WhatsApp to launch specific packages.
Nawras director consumer marketing segment, Simon Baldwin, highlights the operator’s exclusive partnership with WhatsApp as proof of the operator’s willingness to work with the OTTs rather than compete against them. “We have propositions that offer inclusive Facebook, Twitter and WhatsApp time built in because this is where our customers want to socialise and it’s important to us that we are the key enabler for this,” he says.
“The benefits are enormous; SMS is losing its popularity as instant messaging gains in popularity so selectively partnering with key OTTs ensures we are top of mind when customers are using these services. We have two key packages working with OTT. The Nawras WhatsApp bundle includes enough data to satisfy the most ardent of WhatsApp-ers and our Shababiah Plan provides an enormous amount of additional data - on top of the plan quota - specifically for Facebook, Twitter and WhatsApp.”
Batelco general manager consumer division, Muna Al Hashimi, says operators can act as a bridge between OTT players and the end user. The important thing is to occupy a profitable position in the value chain. She says: “The most compelling reason for mobile operators to collaborate with the OTT services, is the mostly social nature and instant behaviour that OTT services highlight. The popularity of these services have created a need - or rather an addiction - for users to be connected all the time, and hence, the inevitable role of the operators to provide mobile internet services. With this in mind, operators need to introduce innovative packages including the popular OTT services, and tailoring it to users in such a way that implies that the operator is the ‘virtual’ provider of the OTT services.”
Chaddha suggests even greater collaboration is likely, and that partnerships between telecoms providers and OTT providers will gain prominence in the Middle East. “Key motivation for operators will be better customer experience and higher revenues from data subscriptions while OTT providers will benefits from wider reach through operator-led marketing as well as in some cases assured quality of service,” he says.
The increasing popularity of OTT applications has highlighted the need for operators to make sure their tariffs keep pace with advances in technology and changing consumption patterns. But there has always been a requirement for compelling offers that provide value for money, long before the rise of WhatsApp and iMessage.
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