Wireless carriers' cash cows decline, pinched by VOIP

When AT&T dropped all nevertheless its unlimited text messaging option previously this year, we said it was a direct response to the threat posed to its cash cow due to instant messaging services and others like WhatsApp and Apple's iMessage. Now, we have quantification on just how much those services, along with VoIP (Voice over Internet Protocol), are affecting carriers.

A new study, commissioned by mobile infrastructure solutions provider Mavenir Systems, shows that one-third of carriers are already seeing voice traffic drop-off and text messaging revenue decline as a result of third-party solutions that leverage mobile broadband. The study consisted of interviews with 31 mobile network operators around the world.

The study was carried out on behalf of Mavenir by mobile(SQUARED). One-third of wireless operators believe operator traffic from messaging, voice and video calling will decline between 11 and 20 percent over the at once 5 to 10 years. Another 20 percent of operators expect even higher losses, in the 31 to 40 percent range, over the same period.

Shubh Agarwal, Vice President, Marketing of Mavenir Systems, said "The findings confirm what we have found in discussions with the mobile industry. This is one of the primary reasons the industry is currently moving towards an all-IP converged core network accelerated by the deployment of LTE (Long Term Evolution, latest standard in the mobile network technology) innovation. By allowing users to place high definition voice and video calls, chat, share content, and discover new services as part of a globally connected framework, operators can retain and even grow their share of customer communication spend."

Gavin Patterson, chief markets analyst and head of data at mobile(SQUARED) said, "The mobile landscape is changing as users embrace messaging of all kinds that enable them to seamlessly message a multitude of devices. This study confirms that lucrative messaging earnings are already impacted and operators are assessing ways to deliver core-network services in the all-IP environment. Rich Communication Ecosystem applications are one example of how mobile operators can overcome the hurdles they face."

It's hard to see how wireless operators can combat the "defections in service use" from systems of their own to third-party systems that leverage mobile broadband, or even wi-fi, if a user is connected.

It does, clearly, make one wonder if the data caps that many wireless operators have instituted are more about trying to make more money off of mobile broadband, which is in turn sucking away their profits from voice and SMS services, than about clogged and overtaxed infrastructure.

Tech guru living in the San Francisco Bay Area

Michael Santo is a tech guru living in the San Francisco Bay Area. He has been involved in innovation for over 20 years, including mobile,...