As messaging revenues shrink, operators should focus on making voice more competitive
Consumer adoption of OTT messaging and voice continues to accelerate, with clear implications for service revenue and consumption. Despite the advantage of HD VoLTE, this trend is likely to continue. Operators need to offer something different, but consumers are unlikely to be interested in premium voice services. What can operators do instead?
That’s the message from global advisors and analysts, Analysys Mason, as they point to research indicating that traditional SMS-based messaging continues to be replaced by traffic from alternative, OTT platforms. As the use of voice capabilities in such applications grow, MNOs that are already challenged by eroding revenues face further difficulties.
The trend is particularly strong in Asia Pacific, with OTT voice expected to account for more than 28% of voice traffic in the region by 2021. That’s a serious loss, so what’s an operator to do?
One answer, with which we completely agree, is to think about how voice can be made to be more competitive as a service. Of course, investments in VoLTE with the richer experience it will offer, will play their part. But, all the same, voice is generally regarded as a commodity by consumers and they are reluctant to pay more for a service in which they see less value. Already, few, if any, operators have found a way to charge for new VoLTE capabilities, instead seeking to find ROI for their investments in customer retention strategies and more efficient use of spectrum assets.
However, there are ways in which voice can be made more competitive. There are users who place a value in voice communications services. Who are they and what do you need to do?
Business users need, not only high quality voice communications services, they also need additional value-added services that enhance productivity and efficiency, such as voice VPN and Unified Communications capabilities. Unlike consumers, they are willing to pay for such capabilities. Sold alongside voice packages, they represent premium, recurring revenue that quickly repays investments and create lasting stickiness.
Trying to raise voice revenues from consumers is a losing battle. They may be interested in what VoLTE offers or they may not, but they are not going to be likely to pay any more for it than they do already. On the contrary, they want things for free.
Business users, on the other hand, are constantly seeking for ways to enhance their businesses and are willing to pay to achieve this, particularly if doing so results in other savings or productivity gains.
The message is clear. Why waste time trying to be more creative with consumer voice offers? Deliver VoLTE and let them decide whether to use it or not. The results will soon be apparent.
However, delivering value added services for business customers that leverage investments in VoLTE and existing voice capabilities makes much more sense. A premium mobile UC or PBX service that is backed by HD voice is a much more compelling offer and is more likely to result in both revenue protection and revenue generation, backed by ongoing subscription packages. MNOs need to switch their focus from a plain VoLTE or voice offer to one that is enriched by other useful capabilities that give business customers tangible benefits.
Why not talk to Gintel? Our range of business communications service solutions are all VoLTE ready while also being fully compatible with legacy networks, which means you can rapidly launch services that leverage new capabilities while also ensuring you can cover the widest possible audience. Find out how at MVNOs’ Asia Congress in Singapore, where you can meet our team.