Operators need to stick together to fend off OTT players

Mobile operators launching standalone mobile messaging services will not win back market share from OTT service providers, and should instead work together to create new, interoperable messaging tool, research finds.

Mobile operators have seen their SMS revenues shrinking in the face of growing demand for mobile instant messaging services (MIMS) by over-the-top (OTT) third-party service providers. However, instead of launching standalone MIMS, operators are better off working together to create a new messaging service that's interoperable, suggests Ovum.

Citing South Korea as a case study, the research firm noted in its report on Tuesday that the country has the highest penetration rate for MIMS globally. As such, the lessons gleaned from operators in the market can be applied by global carriers in their fight to wrest back control from free-to-use MIMS, it noted.

Local telcos had been launching standalone MIMS to regain control of the market but, so far, these have yet to gain as much traction as OTT players such as Kakao Talk, Daum, and Mad Smart, Ovum pointed out. This experience is likely to be repeated internationally by other operators too, it added.

Mark Ranson, an analyst at Ovum, commented: "The threat of MIMS is real, but the next generation of messaging services also poses an opportunity for carriers prepared to adapt to the new climate."

Instead of launching their own MIMs, the research firm urged operators to skip this phase and start developing new post-SMS messaging products to better compete with OTT providers.

"MNOs (mobile network operators) have cooperated in the past to create interoperability in SMS, and interoperability will remain crucial to the success of the next generation of messaging services," Ranson suggested.

Ericsson executives had earlier called on operators to open up their network API (application programming interface) to OTT providers as another way to gain from the rise of services such as MIMS. This is so that services can be delivered to end-users according to their bandwidth requirements and, in turn, improve user experience, they noted.