OTTs Rule the Roost
Network-based IP telephony has been no match to apps like Skype and Viber that are loaded with features and are easy to use.
Thanks to a spurt in the broadband subscriber base led by a burgeoning 3G uptake, internet telephony is no longer a PC-to-PC phenomenon. Moreover, the appification of internet telephony services like Skype and Viber has further ensured that accessing these services over smartphones is quite seamless. At the same time, the growing usage of these over the top (OTT) internet telephony services has also brought to the fore a latent debate as to whether these services should be brought under the purview of some sort of a regulation or not, given that they are increasingly eating into the voice and SMS businesses of telcos that pay up for the licenses to deliver these services.
In a performance indicator report, Telecom Regulatory Authority of India (TRAI) said as per the report available with it from 19 ISPs providing Internet Telephony services, the total outgoing minutes of usage for internet telephony decreased from 302 million in the quarter ended September 2014 to 245 million in the quarter ended December 2014. In the preceding year, TRAI had said based on the report available from 33 ISPs, total outgoing minutes of usage for internet telephony during the quarter ending December 2013 were 319 million.
That the number of Internet telephony service providers came down from 2013 to 2014 is at least in part indicative of the fact that network-based players may be finding it increasingly difficult to gain subscribers in the wake of easy availability of OTT services for users.
As also noted by TRAI in a consultation paper, In 2013, Skype carried an estimated 214 billion minutes of international “on-net” calls (i.e. from one Skype app to another, rather than calls made from Skype to a regular phone). Skype’s traffic was almost 40 percent the size of the entire conventional international telecom market and in growth terms, it now far outpaces the combined growth in the voice minutes of the global telecom industry.
The rapid growth in the OTT segment has significantly impacted telecom service providers globally and India is no exception to that. The situation is not expected to change drastically in the near term.