Rising popularity of OTT leads to telcos losing significant revenue amount

The shift from conventional voice and SMS services to data-driven communication has been aided by the rising popularity of over-the-top( OTT) programmes like WhatsApp, Google Meet, Zoom, and FaceTime.

According to a recent analysis by the Telecom Regulatory Authority of India (TRAI), the income share from voice calls and SMS for Telecom carriers has considerably reduced over the past 10 years. The introduction and widespread use of internet-based calling and messaging services are the reason for this shift in consumer behavior.

The shift from conventional voice and SMS services to data-driven communication has been aided by the rising popularity of over-the-top( OTT) programmes like WhatsApp, Google Meet, Zoom, and FaceTime. On the revenue distribution of wireless access service providers in India, this global trend has had a considerable impact.

The report further shows that over the past decade, Telecom operators' income share from voice calls has plummeted by roughly 80% and their revenue from SMS has decreased by an astounding 94%.

In contrast, data usage related revenue per user has grown significantly, increasing more than 10 times between the June 2013 quarter and the December 2022 quarter.

The TRAI consultation paper examines the possibilities of bringing OTT companies under the licencing framework and focuses on the regulatory framework for OTT communication service. Entry fees, income sharing, adherence to legal standards, provision of call data records, and compliance with legal requirements would all be included in this.

According to the data in the report, the percentage of revenue derived from data has significantly increased; in the December 2022 quarter, it represented 85.1% of the average revenue per user (ARPU), compared to just 8.1% in the June 2013 quarter. Nevertheless, despite this expansion, the overall ARPU has only increased by about 41% over the same time period.

The document also emphasises the drop in voice call revenue share, which now accounts for 10.1% of ARPU, down from 58.6% in the June 2013 quarter. Similar to this, the revenue share from SMS has dropped from 3.22% to 20% of the ARPU.