MNOs, want to beat the OTTs? Stop making excuses and start innovating

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Ovum has been the latest analyst firm to point out the obvious today – mobile operators are in trouble because of ‘over the top’ services.

These OTT solutions – sounds even more dramatic when written as an acronym, yes? – have been growing in popularity with users keen to gobble up their data limits or the more sensible who stick to Wi-Fi networks like glue.

The best example is Skype, which I know I use whenever I am abroad to phone home, saving me thousands of pounds over the years that my greedy operator would have liked to have got his hands on.

But, it is not just calls. There are more and more mobile applications to enable texting to other users, avoiding the charges for SMS messages which are indeed very hefty when abroad.

This is what Ovum’s particular gripe is with. It says that by 2016 operators will have lost $54bn of the revenues they would have been making from text messaging, double the loss of the $23bn it predicts the firms will lose this year.

They are some big figures to frighten the more traditional world of the mobile network provider but in the UK, I’m afraid these revenues fell away a long time ago.

When is the last time you paid for a text message? Ok, there are some people who will spend £1 on a Saturday night to vote for the latest caterwauling chav or celebrity showing off their two left feet, but in general, text messages have become part and parcel of contracts now and rarely does an individual charge get made.

I believe my standard £25 contract has 1,000 free texts included. I’ll fully admit I am not popular enough to use half of those in a 30 day period but I think even teenagers would struggle to breach that by more than a couple of messages.

The days of charging 12p for every text are far behind us and the mobile operators found new ways to entice us to use money.

I concede that the likes of Facebook Chat and Twitter in general may have diminished these revenues and they must have been included in this figure, but I still believe operators have bigger fish to fry.

What the concern should be about is the lost call revenues, the changes in termination rates for operators and the new laws around roaming charges, not SMS revenues.

The real threats are the call services like Skype which as Wi-Fi becomes increasingly available, or as 4G networks begin to roll-out, could replace the noble phone call in time to come – if performance goes up first of course.

Telefonica stood up to the OTTs by launching its own app named TU Me to try and fight them at their own game but I have seen few attempts by its rivals to do the same.

It is time for the mobile operators to stop moaning about others stealing their revenues and start innovating with these types of tools themselves. Then there won’t be as many reports making excuses for their losses. 

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