From the Editor’s Keyboard

ICT can help governments tap into the OTT market to create revenue for development

27 September 2016 at 03:30 | 1942 views

By Suzette Plantema, Guest Writer.

The impact of the network effect on the growth of Chat apps in telecommunications has become evident.

In 2020 both WhatsApp and Facebook Messenger will have more than 1 billion Multi-station Access Units (MAUs) and Instagram and WeChat will be fast approaching that threshold.

As these applications continue to grow in size, they will continue to add features and capabilities designed to increase user engagement with their messaging platforms. These features and capabilities include stickers and games, payments and financial instruments, and the ability for enterprises to use Chat apps to communicate with their customers.

Chat apps are part of daily life for an increasing number of mobile and fixed-line subscribers. Ovum predicts that by 2020, unique global mobile monthly active users (MMAUs) of Chatt apps will number 2.6 billion and unique fixed monthly active users (FMAUs) will number 305.8 million.

For the purposes of forecasting OTT Messaging, each mobile user and fixed user is counted only once, because most users will use more than one Chat app.

It is clear that the use of Chat apps will remain a predominantly mobile activity over the forecast period, mainly because most of these apps initially became available on mobile devices and are popular in mobile-first emerging markets. This is despite the fact that most Chat apps can now work across devices.

Oceania, Eastern and South-East Asia will outstrip all the other regions in terms of the number of mobile and fixed Chat app users during the forecast period. By 2020, mobile MAUs in this region will total almost 895 million, and the region will account for 34.4% of global MMAUs. Users in Oceania, Eastern and South-East Asia will sent 17.3 trillion messages—and 36.3% of the global Chat app text messages. In 2020, China and India will contribute the lion’s share of users and traffic. 762 million users were using Tencent’s WeChat by Q1 of 2016. Most of these are in China.

Total mobile OTT messaging traffic (i.e. text, photo, and video) will grow from 22.8 trillion messages in 2015 to 52.5 trillion messages in 2020. By this time mobile OTT text traffic alone will reach 47.7 trillion messages – almost 10 times that of SMS, which is forecast to reach 4.9 trillion messages by the same date. The instantaneous nature and perceived low cost of messaging on Chat apps will create a higher volume of text messaging by means of Chat apps than SMS.

Given this explosion in usage, it will be crucial for regulators to have the capability to measure and monitor the data. This is especially true of countries that are using micro-contributions on telecommunication services as an Innovative Financing for Development mechanism to raise funds for socio-economic development in their countries. Capturing and monitoring data from a huge volume of transactions requires sophisticated ICT systems and without these it would be impossible to harness the potential and power of telecommunications to generate significant revenue for development.

Besides this, governments need this data to be able to make provision for development in the telecommunications sector and only data can give them a bird’s eye view of the sector and the accurate information allowing evidence-based policies to be implemented.. Evidence-based policy making is gaining importance in several African countries. Technology that has the ability to extract data in real-time from high volume transaction sectors provides a much easier and more efficient solution when it comes to evidence-based policy making.

In this era of “Big Data” there cannot be any excuse for government agencies to lack the appropriate tools for better regulation and evidence-based policy-making—sorely lacking in most governments.

There are many benefits accurate data can bring and the more data there is the more accurate it is. According to FNB Business there are several sectors that could benefit from the use of Big Data. Some of these are the agricultural industry, the financial services industry, the health care sector and the retail sector where systems can be used to

The agricultural industry can utilise data predominantly to increase operational efficiency. In many countries faced with drought conditions and other natural disasters, the agricultural sector needs, more than ever, to optimise what it has, with the assistance of technology and Big Data. When aggregated across geographical regions, this data can be of significant assistance to individual farmers.

The Financial Services industry can use Big Data analytics to increase their revenue, decrease costs and increase customer satisfaction and retention. It could also be used to foster financial inclusion—an issue in most emerging countries.
The Healthcare sector is looking for ways of increasing accessibility to health care services, and improving affordability while maintaining costs. Applications and devices can monitor health, and assist in self-diagnosis—to a certain degree—while the data can be disseminated to insurance companies who build health, fitness and preventative programmes for their clients and monitor the data through the devices.

The retail sector can take advantage of Big Data to build smart marketing strategies, position products and capitalise on these insights when expanding to emerging economies.

Governments can accurately measure and improve the effectiveness of their policies and proactively control situations to avoid unnecessary losses of revenue and expense. They can quickly pinpoint exactly where a problem lies, and by rapidly assimilating this insight, relevant disaster/health teams can then quickly proceed to resolve and remediate the issue—minimising the impact on cost, resources, and human experience.

Recent advancements in technology are now enabling insights to be gained from Big Data so that governments can comprehend accurately what is happening—as it is happening—while incorporating the persistence and post-event capabilities that Big Data is known for.

In my view, the ability to gain the actionable insights necessary to understand where the problem has occurred, which areas have been impacted, and where, is crucially important for the governments of emerging countries. It could enable them to leapfrog many recurring issues in their countries. In this way they could be empowered to take effective decisions quickly to bring potentially devastating situations under control before they have the chance to develop. There are many, many applications for Big Data—not least the power it has to facilitate powerful post-event analysis so that similar situations can be avoided in the future or at the very least better handled .

A global telecommunications advisory company like Global Voice Group has a real-time traffic data collection and processing tool that allows for the passive monitoring of systems to provide governments with data for evidence-based policy making . This is done accurately, non-intrusively, seamlessly in real-time with no impact on the subscribers. The key benefit of this system is its revenue assurance aspect. Accurate data will enable the government/regulator to invoice the telecoms operators efficiently and accurately. The system also encourages compliance with the regulations.

Given the anticipated explosion in OTT services, it would be wise for governments to have the proper regulatory framework in place before the growth—especially as they could capitalise on this and harness the potential for development in their countries.

Ovum’s OTT Messaging Forecast: 2016–20 predicts that the strong growth in OTT messaging app (i.e. chat app) users and traffic will continue over the next five years, as the network effect of apps such as WhatsApp, Facebook Messenger, and WeChat takes hold across the globe.

About the author
Suzette has a lively interest in the world around her­ - she has been a passionate writer for almost 30 years. She speaks several languages, has worked for several blue-chip companies, has BA Honours degrees in English and French as well as a mini MBA and a Certificate in French Language and Literature from the University of Aix-Marseilles, France.