Over-the-top services worth $14bn to carriers by 2020

A study conducted by Juniper Research suggests that content paid for by carrier billing will be a lucrative money-spinner for communications providers

Mobile network operators (MNOs) and telcos could make more than $14bn in sales from content paid for by carrier billing between now and the end of the decade, according to analysis conducted by Juniper Research.

In October 2014, Juniper reported that communications providers in fact stood to lose $14bn in one year alone to over-the-top (OTT) services such as Facebook Messenger, Snapchat and WhatsApp, all of which provide for free a service that MNOs have traditionally charged customers for.

But from its latest research into OTT services, Digital content business models: OTT and operator strategies 2015-19, it now appears operators are preparing to make hay from OTT services themselves, fuelling a dramatic rise in carrier-billed payments on devices such as tablets, consoles and smart TVs.

Juniper’s analysts revealed that existing deployments of carrier billing on app storefronts have already led to a notable increase in paid conversion rates – up to 30 times those of credit cards in some cases, they claimed.

This has allowed first-time monetisation of unbanked consumers and young people, while increasing sophistication of third-party carrier billing systems also enabled subscription billing.

Read more about over-the-top services

Furthermore, the report added, many app storefronts found that carrier billing integration led to higher average transaction values thanks to higher sales of bundled in-app virtual items.

Sports content will be next battleground

Juniper Research also noted that as OTT providers such as Amazon and Netflix continue to invest in their own original content – including shows such as the revived House of Cards and Orange Is the New Black – the next logical step would be the acquisition of sports rights.

However, it said, the high cost would be a deterrent for the time being – BT is currently paying £960m over three years for 42 Premier League matches per season.

Report author Windsor Holden said that even for free streamed sporting events, audiences rarely topped a million. The likes of Amazon, Hulu or Netflix would need a paying audience of 10 million in some cases to make their investment worthwhile.

“But by 2021, when the [US] NFL [National Football League] rights are due for renewal, we would be surprised if one or more OTTs did not bid for an exclusive live package,” said Holden.

Read more on Mobile apps and software

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