According to a report by brokerage firm Credit Suisse, the threat to traditional voice and messaging business of operators from communications applications which offer free calling and messaging using the internet is increasing.
The brokerage firm has stated that the cannibalisation of calling and SMS services by over-the-top (OTT) players, or applications, such as WhatsApp and Skype could impact voice revenue of Indian operators by as much as 50 per cent. And this could lead operators to raise data tariffs which in turn would have an impact on the broadband penetration in India.
The brokerage firm identified India as among the ?most exposed? to the growing competition from OTT players as compared with other markets such as the United States, Europe, Australia, China and Korea where data is a significant part of the operators? overall revenue, and voice comes bundled as part of a data package. Indian operators on the other hand still derive over 80 per cent of their revenue from voice. Credit Suisse concludes that with 3G networks and 3G smartphone penetration expanding, competition from OTT players is only likely to grow. In addition, the level of interactivity of users with applications such as WhatsApp is far higher than that ever achieved by VoIP operators such as Skype, therefore making OTT voice service a more credible threat to the operators.
