Telcos will lose $386 billion over next five years

By : |February 23, 2014 0

MELBOURNE, AUSTRALIA: New forecasts from Ovum indicate that telecoms operators will lose $386 billion between 2012 and 2018 from customers using over-the-top (OTT) VoIP solutions such as Skype and Microsoft Lync. These losses will mostly come from international call revenues, including roaming.

In new forecasts, the global analyst firm reveals that the consumer OTT VoIP market is thriving, with traffic expected to grow by a CAGR of 20 percent between 2012 and 2018, and to reach 1.7 trillion minutes in 2018.

This growth is being driven by improvements in the availability and speed of broadband networks; the growing sophistication, affordability, and capability of smartphones and computers; and the rise of social media. If the current trajectory is maintained, Ovum expects telcos to lose $63 billion in voice revenues in 2018 as customers use free OTT VoIP solutions.

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“Unfortunately, telcos must learn to live with this reality; the use of VoIP will grow increasingly over the next five years to become the underlying technology for delivering voice over telecoms infrastructure,” says Emeka Obiodu, principal analyst at Ovum. “Blocking these services, entering into alliances, or trying to out-compete OTT players using services such as Joyn, are not going to stem the OTT VoIP tide. Instead, we encourage telcos to neutralize the price arbitrage that makes OTT VoIP services appealing.”

In North America, where they already offer unlimited/abundance voice bundles, telcos have been able to secure their revenues while leaving customers to use whatever VoIP service they want. Western Europe and developed Asia will all lose revenues for VoIP calls that originate from their fixed broadband infrastructure.

“While these early initiatives have been for postpaid customers, Optimus Portugal’s WTF tariff has extended the unlimited voice bundle plan to prepaid customers. This is a trend we expect to spread through the telecoms market as telcos adjust their pricing strategies to charge for metered data rather than metered voice,” explains Obiodu.

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