Digital comms aggression from Google and Facebook flags up new collision course with carriers
London - 1 May 2015
Recent communication services announcements from Google and Facebook point to a new war between OTT providers and mobile carriers for the most valuable chunk of the entire global telco business: Voice. Carriers have no choice but to respond, and, according to Current Analysis, this is going to take a radical re-think of the incumbent bundled service model.
In a key event last week, Google outlined its plans to launch its ‘network of networks’ hybrid WiFi/cellular MVNO offering in the US, ending years of speculation on that front. Likewise, Facebook finally pulled the trigger on introducing an on-platform calling feature for its now 800 million-strong global WhatsApp user base. This week, Facebook Messenger, which has become another stalwart messaging provider with 600 million monthly active users, added free video calling via its Messenger VoIP app in the US, Canada, UK and 15 other countries. Facebook claims that its Messenger app has already garnered 10% of the global mobile VoIP calling market in the few weeks of this feature’s availability. What’s more, Facebook is claiming that mobile VoIP on Messenger can produce a higher-quality calling experience than standard cellular calling.
Carriers must stay competitive in ‘free’ WiFi calling environment
“Carriers must waste no time in revising their smartphone bundle structures and go-to-market strategies to offset with this new threat,” says Emma Mohr-McClune, service director with Current Analysis’ Consumer Services. “In the months to come, the smarter carriers will start shifting their traditional bundled voice, data and messaging propositions to a single, streamlined proposition of a single bucket of data for all application usage — voice, messaging, browsing and more. Such radical plan streamlining will certainly expose carrier plan pricing to easier competitive attack. It will also challenge carriers to up the VAS and customer experience odds to hang on to their highest-spend cellular subscriber base in an environment of ever-increasing ‘free’ WiFi calling options.”
Google capitalises on a direct-to-consumer strategy with ‘network of networks’
Google characterises its US MVNO plans as an experiment and has little impact on the communications market today. How Google evolves this project is a bigger question and concern for the mobile carrier community at large. “Google’s implementation of a SIM that enables users to access a hybrid ‘network of networks’ foreshadows a bigger play globally in which WiFi could become the primary access mechanism with licensed cellular networks as secondary backups,” says Lynnette Luna, principal analyst with Current Analysis’ Consumer Services. “This enables Google to primarily capitalise on a direct-to-consumer strategy without the massive costs associated with being a facilities-based mobile operator. As an MVNO, Google can garner valuable insight into consumer usage and consumption, strengthening Google’s position as an OTT player in the rest of the wireless market.”
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Facebook Messenger added free video calling via its Messenger VoIP app.
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