Calls for (almost) nothing, messages for ‘free’ on smartphones

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Updated: May 5, 2015 8:46:33 AM

OTT messaging apps have grown in popularity over the years, often at the cost of traditional SMS.

whatsapp ott servicesOTT messaging apps have grown in popularity over the years, often at the cost of traditional SMS. (Reuters)

OTT or ‘over the top’ services are usually delivered using the Internet, and do not depend on the service provider. So you have OTT messaging apps like WhatsApp for mobile, and Netflix for television. OTT messaging apps have grown in popularity over the years, often at the cost of traditional SMS. They offer a richer experience — not limiting the size of the message, and providing extra features like file transfer and groups chats.

BlackBerry Messenger was the first big OTT, or instant messaging, success. Markets like Netherlands and South Korea were the first to embrace OTT services, soon leading to a fall in SMS revenues for service providers.

OTT-messagingOTT messaging services offer a richer experience — not limiting the size of the message, and providing extra features like file transfer and groups chats.

The growth of OTT messaging apps is usually tied to the adoption of 3G services, as they are heavily dependent on a good Internet network. In India too, OTT has got impetus with the adoption of 3G.

Adoption of OTT services is also incentivised by the cost of SMS services. With the perception strong that OTT is free, or almost so, many users prefer using them to sending SMSes that are billed at a much higher rate. What people often do not realise is that they are paying for data usage.

Service providers are keen to charge OTT services at a different rate because these services have now started impacting voice revenues too. Almost all large OTT messaging services, including WhatsApp, offer voice calls over the Web. While it might not hurt the service providers if the calls are made within the same circle, the game changes sharply if Indians start to chat with friends in, say, the US, by paying just data charges.

In March, TRAI released a consultation paper on OTTs, asking, among other things, whether it was too early to regulate these services in India, where the Internet is still growing. This was the trigger for the net neutrality debate, which snowballed following the launch of Airtel Zero a few weeks later.

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