VoIP has revolutionized communications between individuals and businesses although users have generally used it as a substitute for landline services. Slowly however, mobile devices such as smartphones and tablets are also getting their own VoIP apps in response to market demand. But the rise of mobile VoIP apps has not been taken lightly by carriers.
OTT means Over-The-Top and mobile VoIP apps are exactly that: these are services running on top of the underlying TG / LTE network being used by any mobile device. The OTT provider does not control any part of the physical infrastructure and the service provider (like Verizon, AT&T etc) has no control over the fees, terms or features provided by the OTT app.
A great example of an OTT service is Skype. It is owned by Microsoft and users can make phone calls or send messages to their friends through the app instead of using up the minutes or texts in their calling plan. Increasingly consumers are turning to apps such as WhatsApp, Line and other OTT services to send messages to each other instead of paying for expensive texting plans.
Although the cost of sending text messages is very marginal, carriers have not opted to cut prices in response to competition. Instead, many incumbent carriers have tried to prohibit service providers from using that network to reach customers. As expected such moves were not met favorably by consumers or the FCC, which led to an eventual rollback of the restrictive policies.
In fact some operators have even rolled out their own messaging apps to compete with OTT services although they are not very popular. However messaging apps have a long way to go before they can displace SMS as the de facto method of communication. The primary obstacle is that while SMS is universal, messaging apps restrict users to their own silos. WhatsApp users can only communicate with others on the same service and cannot send messages to Line users or vice versa.
In addition, consumers are reluctant to sign up for a service which is not yet used by any of their friends whereas SMS is practically guaranteed to reach the recipient, irrespective of device or network. OTT apps have generally caught on with consumers in less developed countries and are now making inroads into more developed markets. It is likely only a matter of time before SMS dies a natural death as the majority of users slowly move away to more modern communication methods.
