OTT bypass is the new threat to telecommunications operators’ revenues
OTT bypass is now costing network operators and telecommunications regulators millions of dollars per month. The estimated annual loss of traditional bypass revenue is estimated at more than US$3 billion globally per year, according to Revector, a company that creates products and services to enable telcos to counter fraud.
OTT, said Revector, is set to exceed this total in the future. Telecommunications operators and government regulators are facing “crippling losses” around termination revenues from OTT players such as WhatsApp and Viber, according to global fraud expert and CEO of Revector, Andy Gent.
Gent revealed the extent of the revenues losses at an OTT Bypass Master Class event at the Marriott Islamabad in Pakistan, attended by the Pakistan Telecommunications Authority, Pakistan’s Long Distance & International operators as well as mobile networks operators in the country.
Gent outlined the future extent of the revenue loss, which is estimated by the Communications Fraud Control Association to be costing the telecommunications industry globally more than $3 billion a year, as more than $1 million per month per network operator.
OTT bypass takes place when OTT players terminate calls that began life as a standard PSTN call. Callers dial a regular number on their phone but the call arrives within an OTT app on the recipient’s phone. Unlike OTT to OTT calls, which are legitimate competition for service providers, this diversion of the call costs network operators termination revenues and the caller is unaware that the call has been diverted.
In tests in Pakistan last week Revector discovered that more than 45% of all calls were being terminated in this way from certain routes, which will significantly reducing operator revenues as this technique is copied by other OTT applications.
Gent commented: “OTT companies are now actively selling termination minutes on the open market. This not only fools the recipient of the call into thinking they have received the call via OTT to OTT but also takes revenue from the service provider and taxes from the government. OTT companies are taking a short term approach to revenue generation – money that is taken from the operators’ budgets will mean less revenue for network maintenance and poorer communications networks.”
“Our testing in Pakistan demonstrates the extent of the issue which we have seen replicated in Asia, Africa and Europe.,” said Gent. “I commend the regulator and the various network service providers in Pakistan for taking this issue so seriously. This is a global problem for network service providers and unless they and regulators act immediately, they will see termination revenues tumble to virtually nothing as we have seen in other countries already.”
Like all hidden routes this practice can also represent an additional threat to national security. Gent will be hosting future OTT Bypass Masterclass events in Dubai, Dublin, London and Brussels.
Comment on this article below or via Twitter: @ VanillaPlus OR @jcvplus
Digital services transformation – are we there yet? New analyst insight report
We’re delighted to bring you our specially-commissioned VanillaPlus Digital Transformation Insight. The Insight contains an exclusive Analyst Report written for VanillaPlus by Stratecast | Frost & Sullivan analysts Karl Whitelock and Troy Morley