Mobile operators are expanding international calling services to defend their position from Over-The-Top (OTT) service providers.
This trend in the market has been identified by Wavecrest, who work with international operators to provide connect calls and manage voice traffic between the network and the end user.
The company believes that this industry shift is a defensive strategy as operators start to recognise the effect of calling services on OTT apps and the surge in consumer demand for them.
Describing the market opportunity as ‘huge’, CEO Chris Adams told Mobile that many operators are using their trusted brand name to complete against traditional players in the international calling market, many of which are not well known.
Wavecrest are using this opportunity to expand into creating branded international calling applications, using its experience in termination services to enhance its offering. Adams explained that while many organisations can build an app, not many can integrate it with a global network base.
‘International calling apps are being used by mobile operators who see it as a defensive strategy against rivals trying to attack their market,’ he said. ‘A trusted brand is key, international calling brands are not so well trusted or well-known.
‘Among the operators there’s already talk of them trying to aggressively stop these OTT applications who use the network for free. The whole issue of net neutrality is a fight back and that’s an aggressive stance they will take. They see it as an opportunity to launch a branded OTT application in terrorities where they are not present, it’s a way to enter the market quickly to leverage brand they have to service ex-pats.’
Billion pound market
In the UK O2 currently uses an international calling app, called O2 World Chat, while Lebara also launched its Lebara Talk service for low cost international calls and messaging. Wavecrest has also worked with Tesco to launch its own branded global calling service, on the flipside of the coin Airtel used its customer base in India to launch a UK based calling application.
According to Adams, this move into using international calling apps reflects the value of the market which he claims is worth £1.5bn to £2bn a year.
‘The UK international calling market is worth £1.5bn to £2bn a year and growing and if an operators has an existing distribution base, a trusted brand to communities that make international calls then there’s a huge opportunity. To launch a service the capex (capital expenditure) and opex (operating expenditure) is low so there aren’t many barriers stopping them from making a significant profitable business.’