Stand-Alone Messaging App from Amazon

U.S. e-commerce giant Amazon plans to launch its own stand-alone messaging app, called Anytime, according to a news report that cites a user who claims to have received an Amazon survey about the new messaging service. Amazon has not confirmed that it is working on this service.
 
The app would be available to end-users of smartphones, tablets, PCs and smartwatches. The survey asks users which features are most important to them, and according to one customer, the survey seemed to imply it was a ready product. Anytime is described as an all-in-one feature-rich service that includes text messages and video chat. Anytime will also include features that can be used in groups, such as games, music, and food ordering.
 
The service will keep chats private and will allow users to “encrypt important messages like bank account details.”
 
While this report is certainly far from conclusive, Amazon’s ambitions have always been big and appear to be getting bigger. The company has already launched messaging services for both businesses and consumers, including Amazon Chime, the online video-conferencing service for enterprises. Recently it launched messaging and calling features for Alexa devices.
 
So it makes sense that Amazon would launch an all-purpose OTT messaging app to compete directly with WhatsApp, Skype and others. And considering the company’s highly aggressive approach in general, its level of capitalization and its huge existing customer base, we would not be surprised to see Anytime (if that is what it will be called) pose a major threat to all existing players. Perhaps it would eventually even acquire and take over some of those services.
 
For mobile operators, Amazon’s entry into the OTT space would not have the impact it would have on the OTT players themselves, of course. The game has already been lost, in a sense, with MNOs losing messaging business to OTTs and then striking deals to zero-rate their data and even engaging in partnerships to promote them. Still, a huge, possibly market-dominating new player could shake things up in the sector. Amazon would arguably have less reason to work with the MNOs for promotional purposes, and it could also simply, by virtue of its size and scope, take even more business away from SMS/MMS and even MNOs’ voice services. At the very least, an Amazon OTT would be just one more challenge for mobile operators to contend with in the traditional services space—and maybe beyond, given the possible presence of gaming, music and other non-traditional features in the putative Anytime.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

California Cities Mull Tax on Streaming Content Services

About 40 municipalities in the state of California are considering imposing a tax on internet-based content services such as Netflix, Hulu, Amazon Video and HBO, according to news reports. In doing so, they would be following the lead of the city of Pasadena, which has already announced that effective 1 January 2017 there will be a 9.4 percent tax on each of these services. The stated purpose of the tax is to replace revenue lost to “cord cutting.” Currently cable TV services are taxed on the municipal level in California, whereas internet video content streaming is not, so when people terminate their cable subscriptions in favor of OTT providers, the given city loses a tax stream. The so-called “Netflix tax” is provoking opposition from at least one industry group, the Internet Association, whose spokesman, Noah Theran, said, “Websites and apps are not utilities and it defies logic to tax them like electricity, water or gas.”   We agree with Mr. Theran that streaming content services are not utilities. In fact, it has been precisely the fear of being demoted to utility status that has been motivating mobile operators to partner with streaming content services and even to create their own. While the Pasadena tax initiative appears to target only broadband access to these services, it could conceivably open the door to taxation of mobile streaming, as well. Such taxes, by increasing the total cost of services, could end up driving away some subscribers and therefore are a potential threat not only to the entertainment content providers but also to MNOs. And if MNOs (or, for that matter, fixed line operators) were to mount a legal challenge against a “Netflix tax,” we believe it would not be difficult to argue that such a tax, by discriminating with regard to certain kinds internet traffic, violates U.S. federal net neutrality rules.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To learn more about Tarifica, please visit www.tarifica.com

WhatsApp to Roll out Video Calling

WhatsApp said it will be introducing a new video calling service to its over 1 billion users worldwide on iOS, Android and Windows Phone. The OTT provider stated that the service is meant for every type of phone, from the most expensive to the least expensive. The service will be rolled out to all users over the next few days. According to reports, during a video call, users will be able to switch between the forward-facing and rear-facing cameras, mute the call or press the red button to hang up. WhatsApp, which currently offers messaging and voice calling, says that video calling has been one of the most-requested features from users.   As we have noted frequently in these pages, free or nearly-free OTT services that compete with the offerings of MNOs have been proliferating over the past several years, posing a challenge to the mobile operators. Along with Skype, Facebook-owned WhatsApp has been one of the most vigorous challengers, fueled by its huge worldwide base of subscribers. First with text messaging, then with voice calling, it offered services that closely paralleled or duplicated those of mobile operators. The expansion of high-speed LTE networks (built with the investment of the MNOs) and the increasing availability of budget smartphones have made video calling a possibility for a vast number of users worldwide, so the time is right for WhatsApp to offer it. In this case, however, we do not see it being as significant a competitor to MNOs as with its earlier offerings. While some mobile operators have created native video calling services, for the most part consumers rely on third-party apps for video calling. Probably the company that will be most threatened by WhatsApp’s new offering is Apple, whose FaceTime feature enjoys great popularity. WhatsApp video calling is platform-agnostic, and therefore users no longer have to buy an iPhone to make video calls. The question will be how high the quality of the calls will be, and that will have a great effect on the uptake rate for WhatsApp’s video calling service.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To learn more about Tarifica, please visit www.tarifica.com

Asia-Pacific OTT TV and Video Revenues to Triple by 2021

OTT TV and video revenues in the Asia-Pacific region will jump to US $18.39 billion in 2021, from US $5.74 billion in 2015 and US $707 million in 2010, according to a report from Digital TV Research. China is expected to overtake Japan in 2016 to become the market leader in OTT TV and video services. The report also forecasts that smartphone users will continue to drive OTT TV and video audiences. Advertising on OTT sites is expected to remain the primary source of revenue, bringing in US $8.74 billion by 2021, up from US $2.6 billion in 2015. China will supply US $4.91 billion of the 2021 total, with Japan providing a further US $1.47 billion. The forecast’s impressive figures give a clear indication that OTT services beyond VoIP calling and messaging will be ever-greater sources of revenue in the near future in one well-developed world region, fulfilling the ever-growing consumer demand for data-rich entertainment content. They also make it clear that mobile devices will be the primary conduits for this consumption. Content providers and mobile advertising providers will benefit tremendously from this trend. Asia-Pacific mobile operators should think carefully about how they, too, can profit from it, beyond simply the data-use revenues involved. Partnerships, exclusive if possible, with content providers represent one avenue for operators to pursue. Deals with advertising providers are another.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To learn more about Tarifica, please visit www.tarifica.com

Global Data Traffic to Approach 197,000 PB by 2019

Data traffic generated by smartphones, feature phones and tablets will approach 197,000 petabytes by 2019, with average monthly data usage by smartphone and tablet users doubling, according to a recent study. The research also showed that only 41 percent of the data generated will be carried over cellular networks by 2019, with the majority of mobile data traffic offloaded to Wi-Fi networks. Video traffic over smartphones will increase by nearly eight times between 2014 and 2019. Video currently accounts for around 60 percent of global IP traffic. These findings are interesting in light of the “Wi-Fi first” phenomenon. Within the next five years, it appears that more data will go over Wi-Fi networks than over cellular. We are seeing a blurring of the boundaries between traditional cellular and Wi-Fi, for voice as well as data, aided by the proliferation of OTT service providers. Mobile operators must take note of this trend and devise ways to meet the challenge, including creating their own Wi-Fi networks.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To contact an analyst at Tarifica,click here.

Sprint Doubles the Data for Business Customers

On 10 October, U.S. operator Sprint began offering its Business Share Plan customers with installment billing double the normal amount of data, delivering between 240 GB and 800 GB per month to those with 50 to 100 lines. This promotion, which runs until 31 October, will cost US $50.00–$150.00 less than a similar promotion from AT&T. Sprint will also waive the US $15.00 access fees for unlimited talk and text through the end of 2015 for customers who bring their number to Sprint and activate a phone. The cost of the new Business Share Plan offerings range from US $400.00 per month for 240 GB of data to US $1,350.00 per month for 800 GB of data.

Clearly, Sprint is vying for market share in the business customer segment by offering more value. When it comes to subscriber value from mobile plans, data is the most important metric, because voice minutes or SMS can be replaced with OTT services such as WhatsApp and Skype, whereas there is no easy substitution for cellular data. For example, the formula for our Tarifica Score™—an objective measure currently available for consumer plans only—weights data more heavily than other plan elements. For MNOs, offering more data—or similar amounts of data for less money than competitors, for example, Sprint’s promotion against the comparable AT&T promotion—is an excellent way to offer more value for customers.

However, there are other factors that go into the formula that will nonetheless work against Sprint. The company’s network coverage leaves a lot to be desired, so this promotion while appealing, will not necessarily end up giving Sprint a competitive advantage over AT&T. In addition, Sprint suffers from slower internet speeds than those of its counterparts, which exacerbates the problem. This promotion is a step in the right direction, but it still may not be enough to offer better value for customers than other business plans. 

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Verizon Plans to Launch OTT Streaming Video Service by 2015

Speaking at Goldman Sachs’ Communacopia Conference, Lowell McAdam, CEO of U.S. mobile and fixed operator Verizon, stated that the company plans to introduce an OTT digital video service by mid-2015. The service will directly compete with the likes of Netflix, Hulu and Amazon’s Prime in the U. S.’ crowded streaming video field. Besides the impending entry of Verizon, this market is expected to become even more competitive in coming years, with both Sony and satellite provider DISH Network planning their own services.

The new entrants in the digital content sector are largely drawn by a desire to capture the business of cord-cutting millennial consumers, who have tended to rely on streaming options rather than purchasing cable service, as past generations had. As these younger consumers begin to make up an increasing proportion of heads of households, designing packages that meet their expectations will become more crucial. A major, and possibly imminent, effect of this shift in the industry will be the likely decline in “all-included” cable television packages. Currently in the U.S., most fixed line providers offer a bundle that includes broadband internet, land-line service and a TV package that can include upwards of 300 channels. The inflexibility of this arrangement has long drawn criticism from consumers, who often only watch a small percentage of the channels to which they are subscribed. While these complaints have long been lodged against cable operators to no avail, operators are now scrambling to react because consumers have found another avenue for instant video content—the internet. Of this changeover, McAdam said, “No one wants to have 300 channels on your wireless device. I think everyone understands that it will go à la carte. The question is what this transition will look like.”

Despite the many competitors it will face, Verizon has several built-in advantages that could lead to success in this emerging field. First, the company already provides internet, TV and/or land-line service to 70 million US households. As such, it has the billing, customer service and marketing infrastructure in place to successfully roll out a new service on a broad scale. Second, and more important, Verizon can likely secure the digital distribution rights to some of the most valuable properties that have thus far eluded the likes of Netflix—live content, particularly sports. Even Netflix’s most recent deal with Fox (one of the major U.S. networks), has a one-year delay before the network’s content is available for streaming, with the service acting as an alternative to or an augmentation of the traditional syndication structure. Through its current cable television offerings, Verizon has in place the relationships with networks and the resources to expand distribution to its new OTT service. The greatest challenge to the operator in this field may be adapting culturally to the expectation of rapid change; companies like Netflix are constantly adjusting their offerings based on customer data. If Verizon is able to clear this hurdle, it will be well positioned to thrive on the frontier of content distribution.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

 

3 UK to Launch App for Calls, Texts Via Wi-Fi

Mobile operator 3 UK has announced a new app called Three inTouch that allows customers to talk and text over a Wi-Fi connection. The app will be available beginning in early August and will be offered free to all contract, SIM and pay-as-you-go customers. Any minutes or texts used are charged against a customer’s existing monthly allowance or prepaid credit. The Wi-Fi usage is not charged against the customer’s data allowance.

This is an interesting service option. The calls and texts and not carried over IP; rather, a Wi-Fi signal conveys the calls and texts to 3 UK’s cellular network, which then completes the connection. Unlike with a VoIP or other OTT service, the charges are made to the user’s existing voice and text allowances. So it appears that the purpose of Three inTouch is not to compete with OTT providers but to ensure connectivity for 3 UK customers, especially if they are in a place where cellular coverage is poor or nonexistent, as long as a Wi-Fi connection is available.

 According to the operator, once the app is installed, the transition from standard service to Wi-Fi-assisted service is intended to be seamless.

Also in the U.K., operator EE has announced trials of a Wi-Fi voice service that is intended to create a “zero-defect” calling experience in the country’s busiest regions and get rid of “whitespots,” or no-service areas. In the U.S., T-Mobile currently has a similar service in which calls can be placed over a Wi-Fi connection and are charged based on monthly plan minutes.

“Using Wi-Fi to fill in low- or no-coverage “whitespots” makes sense in a country like the U.K., where free public Wi-Fi is available in many areas. In other markets, it is an open question whether operators would do better to invest in expanding and strengthening their cellular networks or in promoting the proliferation of Wi-Fi. In truth, while apps such as Three inTouch can offer some advantage to users, they are, in the long run, no substitute for reliable, gap-free mobile networks. “

John Dorfman,

Editor-in-Chief,

The Tarifica Alert

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Moldcell Launches World Cup SMS Contest

Moldovan mobile operator Moldcell has launched an SMS contest called “I Love Football,” being held between 12 June and 13 July 2014 in connection with the FIFA World Cup taking place in Brazil during that period. To enter, customers must send an SMS that includes certain words to a certain number; they will then be sent football-related questions that they can answer to accumulate points. Depending on the number of points, contestants can win a trip to Spain, two Sony C2305 and Sony C2005 smartphones or footballs. In addition, customers who send more than 30 messages to the contest number will receive 5 MB of data and five on-net SMS free of charge, available for 15 days for each sent SMS. Declining use of SMS is a global trend, and operators in many markets are looking for ways to promote the service. A timely contest such as this one, which takes advantage of a passionate interest common to many customers, is a good way to stimulate more frequent use of SMS, at least for the duration of the contest. Whether any new usage patterns will persist after the promotion ends is yet to be seen, of course, but considering the strength of the challenge to SMS from less-expensive OTT messaging services, we think this strategy is well worth trying out.  The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx