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, smartphoneshave emerged as a vital tool for enhanced communication, connectivity andproductivity. With the increased penetration of smartphones and mobileapplications, Over-The-Top (OTT) mobile messaging applications now constitute asignificant threat to mobile network operators' SMS-messaging revenues. Theliterature available today shows that OTT applications like WhatsApp, Viber,Facebook Chat, Skype, etc will cost $54 billion lost in revenue to mobile networkoperators. As a result, it becomes critical for mobile network operators to put in placeeffective strategies that will slow the impact of OTT apps.This research investigates the pro-active measures that mobile operators have takenin developing countries to address this challenge and also measures theeffectiveness of these measures in their respective markets.Data was collected through questionnaires from over 400 pre-paid subscribers inAccra. The findings of the research show that OTT apps are changing the behaviourof smartphone users regarding text messaging. The research revealed that morethan half smartphone users send less than 5 SMS messages a day. However, withthe introduction of "bundles" by mobile operators in Ghana as a strategy to generatea sustainable average revenue per user seems to be working. Majority ofsubscribers 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 strategyagainst OTT apps since they are limited to on-net communications only.