Spark Blog Notes from the Spark Team

February 17, 2012

How We Spend Our Time Online

The latest report by Allot Communications reveals some interesting news about our mobile habits and concludes that mobile network operators might want to consider working with web companies when it comes to delivering services via mobile broadband.

First, the report found that savvy consumers are sidestepping operators’ charges for voice and SMS services by taking advantage of VoIP and texting services offered by the likes of Google, Skype, Facebook, and others. For instance, the report cited Facebook Messenger as the “all-time ‘killer app’ on mobile; rising from zero to 22% of total IM traffic in just four months.” The concern for operators is twofold. If customers stop buying their voice and texting plans, a large portion of ARPU (average revenue per user) is lost. And currently, the per-gigabyte price of VoIP calls and IM cannot offset that lost ARPU.

Another fact the report exposed was – no surprise – we all spend a lot of time on YouTube and similar services. Video streaming continued to show significant growth in the second half of 2011 with an 88% increase, and is the single largest application taking up bandwidth, accounting for 42% of mobile bandwidth. Specifically, YouTube accounts for 24% of total broadband and 14% of that traffic is HD video. Carriers make money from lucrative data plans as well.

These habits pose a challenge for mobile operators. First, there’s the loss of ARPU presented by the OTT VoIP and text services. Then there’s the challenge of managing all that bandwidth-hungry video. Building out robust HSPA and LTE networks as well as implementing femtocells will alleviate the latter, but what about OTT VoIP and text services? 

Obviously, operators don’t want customers to drop their voice and texting plans, so the best option would be to work with the VoIP, IM and video-calling services to create an easier transition to IP communications as well as billing plans that shift more of the customer’s bill to data usage.

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