Measuring the Effectiveness of the Strategies used by Mobile Operators in Developing Economies, to address the OTT Challenge

Project Report from the year 2014 in the subject Communications - Multimedia, Internet, New Technologies, , language: English, abstract: Thanks to the advances in telecommunications and mobile computing, smartphones have emerged as a vital tool for enhanced communication, connectivity and productivity. With the increased penetration of smartphones and mobile applications, Over-The-Top (OTT) mobile messaging applications now constitute a significant threat to mobile network operators' SMS-messaging revenues. The literature available today shows that OTT applications like WhatsApp, Viber, Facebook Chat, Skype, etc will cost $54 billion lost in revenue to mobile network operators. As a result, it becomes critical for mobile network operators to put in place effective strategies that will slow the impact of OTT apps. This research investigates the pro-active measures that mobile operators have taken in developing countries to address this challenge and also measures the effectiveness of these measures in their respective markets. Data was collected through questionnaires from over 400 pre-paid subscribers in Accra. The findings of the research show that OTT apps are changing the behaviour of smartphone users regarding text messaging. The research revealed that more than half smartphone users send less than 5 SMS messages a day. However, with the introduction of 'bundles' by mobile operators in Ghana as a strategy to generate a sustainable average revenue per user seems to be working. Majority of subscribers perceive data bundle as a cheaper and better option than Pay-As-You- Go. However, the introduction of SMS bundle seems not to be an efficient strategy against OTT apps since they are limited to on-net communications only.