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Wireless Carriers Struggle to Combat Threat From Over-the-Top Applications, Survey Confirms

Wireless Carriers Struggle to Combat Threat From Over-the-Top Applications, 
Survey Confirms 
Lack of Advanced Messaging Services and Monetization Strategies
Affects Carriers' Ability to Compete 
ALISO VIEJO, CA -- (Marketwired) -- 05/14/13 --   Recent survey
results confirm mobile operators are feeling the threat from
Over-The-Top (OTT) applications like Skype, WhatsApp and MessageMe
and their drain on traditional SMS revenue. In a new survey of
carriers conducted at the Competitive Carriers Association (CCA)
Global Expo in April by Smith Micro Software, Inc. (NASDAQ: SMSI), 82
percent of respondents said they are not effectively monetizing OTT
social messaging apps, and 62 percent are concerned about the impact
of OTT apps on revenue.  
"Ovum predicts that operators will lose $32 billion in SMS revenue to
OTT social messaging apps in 2013, and that this number will increase
to $86 billion in 2020. As our survey results confirm, operators are
feeling the pain," said Jim Mains, senior vice president of global
products and programs, Smith Micro. "The fact is operators are in an
excellent position to raise the bar with today's social messaging
services. They offer a more secure, trusted and reliable service;
whereas with OTT apps, do you really know who has access to your
messages and personal information?"  
"One of the biggest challenges of OTT apps is discovery -- there are
thousands of them and growing every day. With the right visual
messaging platform, operators can take advantage of prime real estate
on the device to offer premium services that generate revenue beyond
the one-time app purchase," said Sunil Marolia, vice president of
product management at Smith Micro. "With social sharing, personalized
content add-ons and targeted mobile ads, visual messaging is a wave
operators don't want to miss." 
According to the survey: 


 
--  82 percent of respondents are not effectively monetizing OTT
    applications used by their subscribers, and 12 percent are not sure
--  53 percent to do not offer any form of advanced visual messaging
--  Only 31 percent offer visual voicemail, 26 percent offer
    voicemail-to-text, and 10 percent offer video messaging apps
--  63 percent of carriers are concerned about the impact of OTT apps on
    
revenue
--  When asked what type of applications in the CCA Carrier-Branded
    Android App Store would be most popular with their customer base,
    respondents ranked messaging services (59 percent) and entertainment
    applications (69 percent) highest, followed by lifestyle applications
    (27 percent) and productivity applications (16 percent)

  
Industry Perspective: 
"Now that the market has been tested, operators know what types of
messaging services work," Ovum analyst Neha Dharia said in a
statement. "In addition, operators are in a position of strength
because they control the entire messaging structure through their
access to a user's phone number and usage data. The established
billing relationship is a great advantage, as is the fact that to a
great extent, operators control the services to which a user is
exposed."(1) 
"The survey highlights an important issue for carriers, which is the
ability to effectively monetize OTT applications when they have no
control over what subscribers download," said Steven K. Berry,
President & CEO of CCA. "While larger operators can selectively
pre-load the latest in visual messaging technology, smaller operators
need an over-the-top model that lets them in on the action. This is
why we created the CCA Carrier-Branded Android App Store -- it gives
consumers peace-of-mind knowing the apps on their devices are safe
and certified, while letting carriers open new revenue opportunities,
build brand recognition, and increase customer loyalty." 
For access to additional key findings from the survey, please visit
findings.  
(1) Originally published in Fierce Wireless article 
About Smith Micro Software, Inc.: 
Smith Micro Software provides solutions that simplify, secure and
enhance the mobile experience. Our portfolio includes a wide range of
applications that manage broadband connectivity, data traffic,
devices, voice and video communications over wireless networks. With
30 years of experience developing world-class client and server
software, Smith Micro helps the leading mobile network operators,
device manufacturers and enterprises increase efficiency and
capitalize on the growth of mobile-connected consumers and
workforces. For more information, visit smithmicro.com. (NASDAQ:
SMSI) 
Safe Harbor Statement:  
This release contains forward-looking statements that involve risks
and uncertainties, including without limitation, forward-looking
statements relating to the company's financial prospects and other
projections of its performance, the existence of new market
opportunities and interest in the company's products and solutions,
and the company's ability to increase its revenue and regain
profitability by capitalizing on these new market opportunities and
interest and introducing new products and solutions. Among the
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and timing of deployment of those technologies, new and continuing
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PRESS INQUIRIES:
Suzanne Runald
Smith Micro Software, Inc.
+1 (949) 362-5800
pr@smithmicro.com 
Lauren Grassetti
LEWIS PR for Smith Micro
+1 (619) 677-2700
smithmicro@lewispr.com