According to a recent Infonetics Research update, the number of over-the-top (OTT) VoIP subscribers was on track to approach one billion by the end of 2013.
This surge followed a dramatic increase in 2012, when subscriber counts rose about 550% to more than 640 million. Not surprisingly, Skype — and Microsoft more broadly — accounted for roughly 40% of that total.
Overall, the OTT VoIP and voice over LTE (VoLTE) market was projected to grow into a $16 billion sector by 2017. Infonetics analyst Stephane Teral noted that the VoLTE estimate was boosted in part by strong adoption and success from SK Telecom in South Korea.
Growth in these markets is clear, but the pace raises questions about how the OTT ecosystem is evolving beyond dominant players like Skype.
Diane Myers, Infonetics’ principal VoIP analyst, observed that other messaging and calling apps — including Fring, KakaoTalk, Line, Nimbuzz, WeChat, and Viber — were gaining traction. However, she emphasized that most OTT mobile VoIP providers were earning very little revenue per user.
Myers added that in 2012 the average revenue per user amounted to only US$7.13 per year. Given how low that figure is, many providers were shifting toward monetization strategies such as advertising, third-party app partnerships, and wholesale agreements with traditional operators.
In short, OTT vendors often need the reach and resources of larger operators to build sustainable businesses. Collaboration rather than outright competition is becoming essential.
Freddie Kavanagh, vice president of application solutions at Tektronix, predicted a notable wave of mergers and acquisitions that would reshape the competitive landscape.
“M&A activity can help drive premium service offerings and increase revenue while reducing the operational impact of OTT services on operator networks,” Kavanagh said. “Developing these services in closer partnership with operators will be important.”
He added that operators’ access to network data and their established billing relationships could be used to deliver more personalized services and to build greater customer trust and satisfaction.
Earlier this year, TelecomsTech ran an Ovum opinion piece arguing that operators should avoid rushing VoLTE rollouts and instead focus on measured deployment strategies.
The industry continues to debate how best to balance rapid innovation from OTT providers with the need for reliable, profitable operator networks. Decisions around partnerships, revenue models, and technical integration will determine which players thrive as OTT VoIP and VoLTE markets expand.