Real Time Communications Featured Article

WhatsApp Bundle Highlights the Challenges OTT Poses to Mobile Telecoms

May 19, 2014

The question of what to do with over-the-top (OTT) services such as Skype and WhatsApp is a going concern among mobile telecoms.

While consumers love that they can send free calls and text messages using such services, OTT is a challenge for mobile networks. OTT uses mobile infrastructure and undercuts the very telecom services that pay for it.

But of course users don’t care about this financial conundrum; in Australia, for instance, now more than 1.06 million people use VoIP on their mobile devices, up 73 percent from last year. This is in line with the trends globally toward mobile VoIP and OTT.

One innovative solution to the problem comes from Econet Wireless, a global telecom that operates in Africa, Europe, South America and East Asia. The company now brings OTT service, WhatsApp, to mobile subscribers as a value-add when they might not otherwise have access.

Econet Wireless has developed an unlimited WhatsApp bundle that can be purchased from its subscribers for 30 cents per day, 95 cents per week, or $3 per month. The bundle gives unlimited mobile use of WhatsApp during the subscription period, even if the subscriber does not have a data plan.

This does three things for Econet. First, it upsells its customers and gets them used to mobile data while not giving away all its benefits in the introductory package.

Second, it allows the telecom to price discriminate more effectively, selling full data services to those who can pay and enabling even those with limited means to buy into real time communications and mobile data a little bit.

Third, it gives Econet a way to monetize OTT and extract some value from the service.

"Many subscribers are using first generation smartphones and Talk and Text plans. This bundle has opened up an opportunity for Econet to launch service plans that incentivize subscribers to move to data-driven services that are affordable to users and profitable to the network," said Don Bowman, chief technology officer for Sandvine, which partnered with Econet on the plan.

The WhatsApp move is another attempt to grapple with OTT, but it also might be a signal of things to come. The status quo cannot last, and an increasing number of industry watchers expect quality of service to be the ultimate solution.

In essence, OTT services such as WhatsApp will be relegated to reduced service levels on the network unless they pay a fee for better access on the network.

While net neutrality is a big battle on many fronts, few can argue that the principle might have to be compromised in the case of OTT. Such services need to pay their way more, or they will kill the profitability of the providers that maintain the infrastructure needed by the OTT firms.

Something’s got to give, and net neutrality might be what cracks first.

Edited by Rachel Ramsey

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