WebRTC World Feature Article

February 05, 2013

Mobile Video Calling: 160M Users by 2017, but Where's the Revenue for Mobile Services Providers?

A new report from Juniper Research, Mobile & Tablet Voice & Video Calling – Strategic Opportunities & Business Models 2012-2017, makes the claim that we will see at least 160 million regular mobile video callers by 2017.

In truth, we’d have anticipated that number to be significantly higher on a global basis, but it nevertheless represents what amounts to a fourfold increase from today's approximately 40 million regular users.

The increase will be due, at least as far as Juniper is concerned, to improved user interfaces and the ability of rapidly developing 4G networks to handle the data traffic. We strongly believe that WebRTC will likely play the key role in driving video calling over the next five years. In fact, that WebRTC will surely make video calling fundamentally easier - the main reason we believe there will be much more than 160 million regular video callers by 2017.

We'll "see" how it pans out.

Juniper's greatest concern as far as video calling is concerned is where the revenue and revenue models to support the technology deployments will ultimately come from for the mobile services providers. These are very legitimate questions to ask, and our own key driver - WebRTC technology - doesn't necessarily improve the odds of generating significant revenue.

Juniper notes in the report that both advertising and various freemium models are now emerging within the mobile video calling market. But Juniper believes generating non-trivial mobile video calling revenue generation will remain the industry's key challenge.

The freemium models being explored do not necessarily offer an easy path to users upgrading to revenue generating services. Part of the problem - and WebRTC adds to this - is that it becomes easy for users to go ahead and simply make the video call. Once they've done so, they've accomplished 90 percent of what they want out of video calling.

So it remains very tricky to cajole users into paying for additional services that would generate recurring and sustainable revenue.

Mobile advertising is probably the more viable option, but Juniper reports that the potential advertisers in this space have yet to really explore the potential of mobile video calling.

The report’s author, Anthony Cox, said that, “Mobile advertising per se is becoming main-stream but the model still needs to be adapted for mobile video calling for meaningful revenues to become available to service providers.” It would be difficult to disagree with that assessment.

Cox also notes that despite this issue, "Key players in the mobile video calling market have recently received additional funding from their backers, representing an implicit blessing of their business strategies."

Additional report findings include the following:

Specialist mobile VoIP (mVoIP) companies are opening their Application Programming Interfaces to third parties, including MNOs, to gain revenue.

The arrival of 4G will give further impetus to mVoIP take-up but potentially accelerate the decline in overall voice revenues for MNOs.

Advanced IP-based services will develop faster in developed markets due to the direct correlation between 3G and 4G rollouts and the take-up of mVoIP and mobile video calling.

Revenue from the circuit switched voice market will continue to fall over the next five years, but will not accelerate.

Some of these observations simply reflect reality - of course developed markets will grow more quickly, and yes, circuit switched revenue will fall - it is now a dead end. Nevertheless, the report includes a good deal of comprehensive analysis for both the mVoIP and mobile video calling markets, and contains five-year forecasts for mVoIP and mobile video calling user numbers and revenue, as well as for mVoIP tablets.

A free mVoIP whitepaper, mVoices of Reason, and details for purchasing the full Mobile & Tablet Voice & Video Calling – Strategic Opportunities & Business Models 2012-2017, are available directly gfrom Juniper.

Edited by Braden Becker


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