Over on IP Carrier, Gary Kim posted a nice graphic illustrating the growing effects of over-the-top messaging on SMS revenue country-by-country across Europe for the last three years. But I’m struck by how many still phrase this phenomenon as caused by OTT messaging. OTT messaging is the response to the problem, not the cause.
The problem is that SMS as a technology has been charging a lot and delivering less than it should for the price, especially in Europe where cross-border voice and messaging has been badly overpriced. The market has been begging for disruption, feeling entitled to revenues it has not really deserved based on the services provided. The lack of the cross-border silliness in the US has insulated carriers here somewhat, but it won’t last.
If you leave food out at a picnic and come back to find an ant colony taking it away, the ants aren’t the problem – your negligence is. European mobile operators have been negligent in providing value for the money when it comes to SMS and voice, trying to use the profits to subsidize the investments needed for more general (and much, much cheaper) data traffic. The rise of OTT apps is just the ants arriving to take advantage of the mismatch, whether it be SMS, voice, or video.
While carriers complain and announce plans to stomp on the ants, the only truly effective way to stop them is obviously to put the food away.
Mobile carriers need to change the way they price things to reflect the fact that data is everything now, while voice and SMS are just apps. If we make data too cheap and the apps too expensive, OTT disruption will make us look stupid every time.