Carrier LTE Application Strategies To Combat OTT Players And Services

Over-the-Top (OTT) applications are those that are provided via the Internet in which only a data connection is required.  The wireless carrier is not directly involved and only recognized indirect revenue due to data usage.  OTT players and applications have grown to become a significant threat to core services for network operators, most notably voice and messaging.  Carriers do not discriminate what is being carried over the data channel and are satisfied (from a data service revenue perspective) to just sign up as many data users as possible.

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LTE brings rather significant capacity gains to the mobile networks, which translates into more bandwidth to offer, more subscriptions to sell, more data consumed, and more data revenue for the carriers.  On the demand side, bear services, particularly data, continues to grow at a healthy pace, but there are limits to growth in bearer service for consumer and even enterprise usage.  In addition, there is an increasing awareness of Internet Protocol (IP) being cheap source of transport, and hence more people becoming aware of VoIP, and therefore OTT alternatives.

There is a big migration underway from traditional voice to data.  This is not to mean that voice goes away in favor of only non-voice services.  What this really means is that traditional circuit-switched (bearer) is going away, and eventually with it, traditional voice calling plans.  With this evolution of bearer services becoming marginalized, the payload itself becomes the value and the simple carriage of data becomes a marginalized commodity.  With this development, Value-added Service (VAS) applications become much more important to the network operators. Carriers can either sit idly by while this happens or take proactive action.  We recommend the latter !!

This research evaluates the OTT threat to wireless carriers and provides specific strategies and recommendations to compete and win in the marketplace.   The report evaluates the general market drivers for VAS applications and the competitive factors issues relative to OTT player offerings.  The report includes analysis of LTE enabled application benefits and challenges and presents an application roadmap.

The report also includes forecasts from 2013 - 2018 for every major VAS application category including:

• Mobile Data
• Voice over LTE (VoLTE)
• Rich Communication Suite (RCS)
• Mobile Advertising
• API-based Apps
• Social Networking
• Coupons and Loyalty
• Geo-location
• Mobile Gaming
• Mobile Virtual Goods
• Video, TV, and Second Screen
• Mobile Health
• Mobile Entertainment
• Machine-to-Machine (M2M)
• Connected Vehicles
• Public Safety
• Messaging (non RCS)
• Small Cell Targeted Advertising

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Table of Contents:

1.0 EXECUTIVE SUMMARY 9

2.0 INTRODUCTION  10
2.1.1 WHAT IS OVER-THE-TOP (OTT) AND ITS IMPACT? 10
2.1.2 OTT TRENDS  10
2.1.3 THE CARRIER IMPERATIVE  11

3.0 CARRIER CHALLENGES  13
3.1 SPECTRUM AVAILABILITY   13
3.2 CAPEX BUDGETS 13
3.3 IS MORE CAPACITY BETTER?  13
3.3.1 ADVANTAGES  13
3.3.2 DISADVANTAGES   13
3.4 THE FIGHT AGAINST OTT PLAYERS  14
3.4.1 OTT VOICE 14
3.4.2 OTT MESSAGING   14
3.4.3 CARRIERS TO FIGHT BACK  16
3.5 THE DRIVERS FOR NEW APPLICATIONS  18

4.0 LTE APPLICATION STRATEGY  20
4.1 PREPARE FOR MUCH MORE DATA USAGE   20
4.1.1 BIGGEST FACTOR IN MOBILE DATA: MOBILE VIDEO 20
4.1.2 MOBILE VIDEO FORECAST  21
4.2 PREPARE FOR INCREASINGLY MORE SERVICES IN THE CLOUD 21
4.2.1 THE ROLE OF INCUMBENT NETWORK OPERATORS IN MOBILE CLOUD 22
4.2.2 MOBILE DATA IN THE CLOUD FORECAST  23
4.3 PREPARE FOR INCREASINGLY MARGINALIZED CORE SERVICES  23
4.3.1 MARGINALIZATION DRIVES THE NEED FOR VALUE-ADDED SERVICES  23
4.3.2 VALUED SERVICES INCLUDE COMMERCE, CONTENT AND APPS  24
4.4 PREPARE FOR DEPLOYMENT OF VALUE-ADDED SERVICES 28
4.4.1 WHAT IS A VALUE-ADDED SERVICE (VAS)?  28
4.4.2 RELATIONSHIP OF VAS TO OTHER SERVICES   29
4.4.3 WHY ARE VAS IMPORTANT?  29
4.4.4 THE VAS SUPPLY CHAIN  29
4.4.5 CARRIER PLANNING FOR VAS APPLICATIONS 29

5.0 LTE APPLICATION ROADMAP 32
5.1 VIDEO  32
5.1.1 MORE OF THE SAME: ONLY FASTER 33
5.1.2 VIDEO CALL  36
5.1.3 LTE VIDEO BROADCAST 37
5.1.4 MOBILE TV IN LTE  38
5.2 VOICE OVER LTE (VOLTE) 42
5.2.1 GSMA VOLTE INIATIVES  43
5.2.2 ALTERNATIVES TO VOLTE   44
5.3 RICH COMMUNICATIONS SERVICES (RCS)  45
5.3.1 GSMA RCS INITIATIVES 47
5.3.2 RICH CALLS   48
5.3.3 RICH MESSAGING  49
5.3.4 RCS AND VIDEO  50
5.3.5 DYNAMIC ADDRESS BOOK (DAB) 51
5.4 LTE DIRECT 52
5.4.1 DIRECT SERVICES 53

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