According to Idate’s most recent study, “Future of Communication 2020: Telco & OTT communication – market forecasts,” the total value market is expected to decline, mainly due to the telcos’ devaluation of the market, rather than the OTTs taking their revenues.

   The firm outlined six key trends happening in the communication services market, which will shape the market through to 2020: the aggregation of communication types; telcos moving beyond traditional communication; voice and messaging becoming a telco commodity; mobile data and WiFi making strong cases for OTT providers; the rise of video communication; and free OTT offers in exchange of user data.

   Idate notes that most communication service providers are aggregating and providing several communication types to the market. “For example, Facebook is primarily a social network, which is a communication tool in itself, but also offers voice, messaging and file sharing services too,” Idate wrote in the report. “In the case of operators, they traditionally offer voice and messaging as their core product, but are now looking to diversify into file sharing too, either through cloud products or the GSMA-led RCSe (Rich Communication Suite enhanced) initiative.”

   Telcos have long searched for ways to offer more than voice and messaging in order to remain competitive in the market. Idate sees three main ways in which telcos are striving to achieve this.

   “Telcos are providing their own OTT communication service such as Telefonica with their TU Me app and Orange with their Libon app, partnering with OTT communication service providers such as Verizon and H3G UK with Skype and H3G HK with WhatsApp and joining the GSMA-led initiative, launched by Orange, Telefonica and Vodafone in Spain.”

   Idate believes that the need for telcos to offer more than the traditional voice and messaging service is largely due to the commoditization of such services. “These services are today taken for granted, and virtually all telcos offer them in abundance; that is to say for a certain fee, users get massive amounts of minutes and messages that in reality are hard to use all up, and there are also many cases of unlimited offerings. This means that the value of such services is decreasing. Another trend for telcos is bundling, from double to quadruple play. Whilst such marketing strategies are intended to increase user appeal and also reduce churn, the fee itself is normally reduced and hence further devalues the standard voice and messaging services,” the report said.

   Several operators have tried to take a video communication concept to the market in the past, but with limited success due to high costs for users. Idate notes that OTTs have come into the market with a free proposition using WiFi, including the likes of Apple and Facebook.

   “One of the obvious advantages of OTT services is that it often comes for free, or in some cases, a very low fee. As an overall trend in the Internet market, the advertising model is becoming standard and the advertising market is set to grow with better tools and analytics, especially for mobile. The communication market is no exception, and is set to profit from advertising. However, generally speaking, users see advertising as a nuisance, and there is also a market for low-cost services with no advertisements.”