Transforming Telecom Revenue- The impact of OTT Service

Abstract

The telecom industry's primary revenue streams used to be voice and SMS, but with the rise of Over the Top (OTT) services, this scenario is changing. This paper aims to analyze the transition from the voice and SMS era of cellular communication to a data-centric business. The study uses ten years data of voice traffic, data traffic and SMS count and their respective revenue of Telecom operators of Nepal. The research explores how user behavior is shifting from voice and SMS to data usage patterns, provides valuable insights into the changing landscape of the telecom industry and impact of OTT services on traditional revenue streams. It also highlights the need for telecom operators to adapt to these changes by embracing new technologies and providing innovative products to meet the evolving needs of their customers. Finally, the paper provides the various strategies to be implemented by telecom operators in response to revenue loss due to OTT services. It demonstrates that embracing OTTs and providing different products that resemble flat-rate pricing will be the most successful strategy for mobile operators to retain revenues. Additionally, the research reveals that the regulator should resist the push for regulating OTTs and instead facilitate the evolution to flat access pricing.