The Connected Consumer Survey 2015: OTT communication …The Connected Consumer Survey 2015: OTT...

© Analysys Mason Limited 2015

The Connected Consumer Survey 2015: OTT communication services

Research Report

The Connected Consumer Survey 2015:

OTT communication services

April 2015

Patrick Rusby and Stephen Sale



About this report

This report focuses on aspects of Analysys Mason’s annual

Connected Consumer Survey that relate to the behaviour and

plans of over-the-top (OTT) communication service users in

France, Germany, Indonesia, Malaysia, Morocco, Poland,

Qatar, Saudi Arabia, South Africa, South Korea, Spain,

Turkey, UAE, the UK and the USA. The survey was

conducted in association with Survey Sampling International

(SSI) and On Device Research.

The research was conducted in July and August 2014. The

survey groups in Europe and the USA were chosen to be

demographically representative of the broader online consumer

population, and those in Asia–Pacific and the Middle East and

Africa (MEA) were chosen to be representative of the mobile-

Internet-using population. We set quotas on age, gender and

employment status to that effect. There were a minimum of

1000 respondents per country, and 22 174 respondents.

This report focuses on several issues that are critical to the

strategy of mobile operators in 2015, including:

penetration of OTT communications apps, including OTT

messaging, VoIP and video calling apps

the market demographics for OTT messaging adoption, and

the impact of these services on operators’ SMS services

use cases for, and barriers to adoption of, VoIP and video

calling services.

2

Figure 1: Geographical coverage of our Connected Consumer Survey 2015

[Source: Analysys Mason, 2015]

USA

UK

Spain

France

Germany

Poland

Turkey

Morocco

Saudi

Arabia

UAE

South

Africa

South

Korea

Malaysia

Indonesia

Qatar

Online survey

(Survey Sampling International)

Browser-based mobile survey

(On Device Research)



Contents

6. Executive summary

7. Messaging was the most widely used OTT communication service on

handsets, and video calling apps were used more than VoIP

8. OTT messaging penetration and SMS usage are highest among

younger age groups in Europe and the USA

9. Overseas workers in the Middle East continue to use Skype to call

home, but newer apps are challenging its position as the market leader

10. Recommendations

11. Recommendations

12. Penetration of communication apps

13. Messaging was the most widely used OTT communication service on


14. Asia–Pacific: The market is fragmented so no service dominates, and

competition is intense in Indonesia and Malaysia

15. Europe and the USA: Turkey has joined Germany and Spain as good

markets for WhatsApp Messenger, and Skype remains strong

elsewhere

16. Middle East and Africa: VoIP and video calling were more prevalent than

in other regions, largely because of expatriate communities in Qatar and

UAE

17. OTT messaging and SMS substitution

18. The 25–34 age group typically had the highest penetration of OTT

messaging apps – particularly in Germany and Spain

3

19. The ‘messaging giants’ in Europe and the USA appeal across age

groups and platforms, but a long tail of services is catering to niche

segments

20. OTT messaging penetration and SMS usage are highest among

younger age groups in Europe and the USA

21. A lack of universal reach limits the ability of OTT apps to fully replace

SMS, but substitution is advanced in several countries nevertheless

22. Unlimited SMS message allowances may have restricted OTT

messaging penetration in some countries, but SMS volumes are

decreasing overall

23. Many operators in Asia–Pacific have chosen to partner with OTT

players instead of competing directly in the messaging market

24. VoIP and video calling services

25. VoIP is strongest in the Middle East where the service is most widely

used by older respondents

26. Overseas workers in the Middle East continue to use Skype to call

home, but newer apps are challenging its position as the market leader

27. In countries that do not have large communities of immigrants, VoIP is

not providing a compelling reason to convert usage from voice minutes

28. Video calling was more widely used than VoIP in most markets,

suggesting that users are looking for more than just price advantage

29. Methodology and panel information

30. Methodology

31. Panel information: France and Germany

Slide no. Slide no.


The Connected Consumer Survey 2015: OTT communication services 4

Contents

32. Panel information: Indonesia and Malaysia

33. Panel information: Morocco and Poland

34. Panel information: Qatar and Saudi Arabia

35. Panel information: South Africa and South Korea

36. Panel information: Spain and Turkey

37. Panel information: UAE and UK

38. Panel information: USA

39. About the authors and Analysys Mason

40. About the authors

41. About Analysys Mason

42. Research from Analysys Mason

43. Consulting from Analysys Mason

Slide no.



List of figures

Figure 1: Geographical coverage of our Connected Consumer Survey 2015

Figure 2: OTT communication app usage on smartphones, by category,

country and region

Figure 3: SMS usage and OTT messaging app penetration by age group,

Europe and the USA

Figure 4: Penetration of Skype among handset owners by nationality and

country, Middle East and Africa

Figure 5: Penetration of VoIP apps, Middle East and Africa


country and region

Figure 7: Penetration of OTT communication apps on handsets, Asia–

Pacific

Figure 8: Penetration of VoIP and OTT messaging apps by country,

Asia–Pacific

Figure 9: Penetration of OTT communication apps among smartphone

users, Europe and the USA

Figure 10: Penetration of VoIP and OTT messaging apps by country, Europe

and the USA

Figure 11: Penetration of OTT communication apps on handsets, Middle

East and Africa

Figure 12: Penetration of VoIP and OTT messaging apps by country, Middle-

East and Africa

Figure 13: Penetration of OTT messaging apps among smartphone users,

by age group and country, Europe and the USA

Figure 14: Penetration of OTT messaging apps among OTT messaging

users, Europe and the USA

5

Figure 15: Penetration of OTT messaging apps among OTT messaging

users, by age group and country


Europe and the USA

Figure 17: Use of OTT messaging and SMS by smartphone owners, by

country and region

Figure 18: SMS message allowance per month, by country, Europe and the

USA

Figure 19: SMS volume sent per subscriber, by country, Europe, 3Q 2012–

3Q 2014

Figure 20: Operator partnerships with OTT players by region, November

2014

Figure 21: Penetration of VoIP apps among handset users, by country and

age group, Europe and the USA

Figure 22: Penetration of VoIP apps among mobile Internet users by country

and age group, Asia–Pacific and Middle East and Africa

Figure 23: Penetration of Skype among handset owners by nationality and

country, Middle East and Africa

Figure 24: Penetration of VoIP apps among handset owners, Middle East

and Africa

Figure 25: Reasons stated by tablet and PC VoIP service users for not using

VoIP services on handsets, 2012 and 2014, Europe and the USA

Figure 26: Penetration of VoIP and video-calling services by country and

region



Asia–Pacific Europe

and the USA

Middle East

and Africa

Messaging was the most widely used OTT communication service on


Penetration of OTT messaging (IP or social messaging),

voice and video calling services varies significantly by

country.1 OTT messaging was the most commonly adopted

category of OTT service, because it offers an improved user

experience compared with SMS, at zero or minimal cost.2

Penetration of VoIP on mobile handsets remains relatively

low in Europe and the USA. In contrast to messaging, VoIP

apps have not been able to offer a significantly differentiated

user experience or price advantage for domestic calling.

The Gulf Cooperation Countries (GCC) in the survey had the

highest VoIP and video communication app penetration in the

panel because the large population of workers from overseas

use these services to communicate with friends and family in

their home countries.

In Malaysia and Indonesia, fragmentation between services

was significant. Five services have more than 20% penetration

of respondents in Malaysia, and six in Indonesia. In South

Korea, only KakaoTalk fits this description.2

7


country and region [Source: Analysys Mason, 2015]

1 The respondent panels in Asia–Pacific and MEA are representative of mobile Internet users,

who are more likely to be smartphone owners and to use these services than the general

population. In these regions, smartphone owners tend to be early adopters, and therefore

penetration of services may appear higher than in more mature markets worldwide.

2 Social messaging apps are those that fall between social networks (such as Facebook) and

pure messaging apps (such as WhatsApp Messenger). Examples include Instagram and LINE. Question: “Which of the following services do you use on your handset?”; n = 15 072.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ind

one

sia

Ma

laysia

Sou

th K

ore

a

Fra

nce

Germ

any

Pola

nd

Spa

in

Tu

rke

y

UK

US

A

Mo

rocco

Qata

r

Sau

di A

rab

ia

South

Afr

ica

UA

E

Pe

rce

nta

ge

of

resp

on

de

nts

OTT messaging VoIP Video



OTT messaging penetration and SMS usage are highest among younger

age groups in Europe and the USA

OTT messaging penetration is highest among younger age

groups and these respondents are typically heavy users of

SMS. OTT messaging services often encourage users to

send more messages because the apps facilitate chat-style

conversations, and are free.

In Europe and the USA, Facebook Messenger, Skype and

WhatsApp Messenger, the three dominant apps, were each

used by over 30% of OTT messaging users in these regions.

The market is characterised by a long tail of niche apps that

appeal to specific groups, often based on age, and often

within a specific country – for example, Kik in the USA and

Snapchat in the UK.

Respondents in most countries in Asia–Pacific and MEA

used a combination of OTT messaging and traditional SMS

for messaging on their handset. In Europe and the USA, 63%

of respondents with smartphones did not use OTT

messaging services.

The example of Turkey shows that high usage levels of SMS

do not protect against OTT substitution. Operators need to

use pricing levers to more-effectively manage the decline of

SMS. They should also consider improving the user

experience of their communication services to remain

competitive.

8

38%41%

36%

23%

15%

8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18–24 25–34 35–44 45–54 55–64 65+

Pe

rce

nta

ge

of

resp

on

de

nts

Age group


Europe and the USA [Source: Analysys Mason, 2015]

Questions: “How many text messages (SMS and MMS in total) do you send per month?”; n =

7052; and “Which of the following services do you use on your handset?”; n = 7052.

<100 100–249 250–499 500–999 >1000

Number of SMS/MMS messages per month:

Penetration of OTT messaging apps


The Connected Consumer Survey 2015: OTT communication services 39

Executive summary

Recommendations

Penetration of communication apps

OTT messaging and SMS substitution

VoIP and video calling services

Methodology and panel information

About the authors and Analysys Mason



About the authors

Patrick Rusby (Analyst) is the lead analyst for Analysys Mason’s SME Strategies research programme, and

contributes to the Mobile Services programme within the Consumer research practice. Patrick’s areas of

specialisation for SME strategies are SME technology trends and adoption, enterprise mobility, SaaS and IaaS

services for SMEs and unified communications. Within Mobile Services, Patrick is focused on the MVNO market

and churn-reduction strategies for operators. Patrick was previously a Research Manager for Knowledge Peers, a

peer learning platform helping SME CxOs share best practice in finance, technology and telecoms. He holds a

Master’s degree in Contemporary British Politics from Goldsmiths College, University of London.

Stephen Sale (Principal Analyst) is the lead analyst for Analysys Mason’s Mobile Services and Next-Generation

Services research programmes. His primary areas of specialisation include next-generation communication

services, over-the-top (OTT) player strategies and mobile pricing. He also has extensive experience in analysing

mobile operator strategies and forecasting mobile service markets. Before joining Analysys Mason in 2004, Stephen

worked in the industry on areas that include VoIP, next-generation service architecture and broadband access. He

has a degree in economics and an interdisciplinary MRes from the University of London.

40



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