A mobile phone transforming into a streaming icon, symbolizing the shift in telecom revenue from traditional services to OTT platforms.

Over-the-Top (OTT) Services: How Telecoms Can Reclaim Lost Revenue in the Streaming Age

Theo Raines in Tech & Innovation December 2025 • 4 min read.

"Is your mobile carrier losing money to streaming apps? Discover innovative strategies for telecom companies to not only survive but thrive in the OTT era."

The telecom industry is undergoing a monumental shift. The rise of mobile technology has connected more people than ever before, with billions now carrying smartphones. These devices are not just tools for calls and texts; they are gateways to a world of over-the-top (OTT) services that have revolutionized how we communicate and consume content.

Think about your own phone usage. How often do you make traditional voice calls compared to sending messages or making calls on WhatsApp? How much time do you spend streaming videos on YouTube or binging shows on Netflix? These OTT services, while providing immense value and convenience, are subtly reshaping the revenue streams of mobile network operators (MNOs).

Once reliant on voice calls and SMS for the bulk of their earnings, MNOs are now grappling with a landscape where data has become king. However, simply providing data isn't enough. This article explores how these OTT services impact mobile telecom revenues, quantifies the losses, and most importantly, offers strategic recommendations for telecoms to reclaim lost ground and secure their future.

The Silent Revenue Drain: How OTTs are Impacting Telecoms

A mobile phone transforming into a streaming icon, symbolizing the shift in telecom revenue from traditional services to OTT platforms.

The shift is clear: traditional revenue streams for MNOs—voice calls, SMS, and long-distance charges—are declining. This decline coincides with the explosive growth of OTT services that provide communication, entertainment, and more, all riding on the data networks built and maintained by MNOs. Here is what the article said:

This disruption isn't just a minor inconvenience for telecoms; it's a fundamental challenge to their business model. Let's break down the core issues:

Cannibalization of Services: OTT apps offer free or low-cost alternatives to traditional services. Why pay for SMS when WhatsApp offers free messaging with added features? Why make expensive international calls when Skype offers cheaper rates?
The Freemium Model Advantage: Many OTTs operate on a freemium model, providing basic services for free and charging for premium features. Users are happy, but MNOs see little of that revenue.
Infrastructure Investment vs. Revenue: MNOs are forced to invest heavily in network upgrades to handle the ever-increasing data traffic generated by OTT services, yet they don't directly benefit from the OTTs' financial success.
ARPU Decline: Average revenue per user (ARPU) for MNOs is decreasing, indicating that they are struggling to monetize their subscriber base effectively.

While MNOs see data usage increase, the revenue generated by this increase is often insufficient to offset the losses in traditional areas. They are essentially becoming data pipes, providing the infrastructure for OTTs to thrive while struggling to capture a fair share of the value.

A Future of Collaboration or Competition?

The relationship between MNOs and OTT providers is complex, and it is crucial to remember, it doesn't have to be adversarial. MNOs possess unique strengths—extensive infrastructure, a massive customer base, and local market expertise. By focusing on innovation, strategic partnerships, and customer-centric approaches, MNOs can not only recover lost revenue but also thrive in the ever-evolving digital ecosystem. The challenge now is to make use of their advantages and change themselves to adapt to our world today, so everyone wins.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

Everything You Need To Know

What are Over-the-Top (OTT) services and how are they impacting Mobile Network Operators (MNOs)?

Over-the-Top (OTT) services, like WhatsApp and Netflix, deliver content and communication over the internet, bypassing traditional telecom services. These services impact Mobile Network Operators (MNOs) by cannibalizing their revenue streams. Consumers are shifting from paid SMS and voice calls to free or low-cost OTT alternatives. This shift leads to decreased Average Revenue Per User (ARPU) for MNOs, as they struggle to monetize the increased data usage generated by OTT services. MNOs invest heavily in infrastructure to support this data traffic but don't directly benefit from OTTs' financial success. This dynamic essentially transforms MNOs into data pipes, providing the foundation for OTTs to flourish while facing revenue challenges.

How do OTT services contribute to the decline in Average Revenue Per User (ARPU) for mobile carriers?

OTT services contribute to the decline in Average Revenue Per User (ARPU) for Mobile Network Operators (MNOs) primarily through service cannibalization. For instance, free messaging via WhatsApp replaces revenue-generating SMS services. The freemium model employed by many OTTs also plays a role. While users enjoy basic services without charge, MNOs receive minimal revenue despite handling the increased data traffic. Moreover, as consumers increasingly rely on OTT services for communication and entertainment, their spending on traditional telecom services decreases, further reducing the ARPU that MNOs can generate from each subscriber.

What is the 'silent revenue drain' and how does it affect telecom companies?

The 'silent revenue drain' refers to the gradual loss of revenue experienced by Mobile Network Operators (MNOs) due to the increasing popularity of Over-the-Top (OTT) services. This drain occurs as consumers shift from traditional services, such as voice calls and SMS, to OTT alternatives like WhatsApp and Skype. The financial impact is significant. MNOs face declining revenue from these traditional sources, even as they must invest in network infrastructure to support the data-intensive OTT services. This results in reduced profitability and a fundamental challenge to their established business model, making it difficult for them to maintain or increase their Average Revenue Per User (ARPU).

In what ways do OTT services, like WhatsApp and Netflix, challenge the traditional revenue models of mobile carriers?

OTT services challenge the traditional revenue models of Mobile Network Operators (MNOs) in several ways. Firstly, they cannibalize existing revenue streams. WhatsApp, for example, offers free messaging, which directly competes with and replaces revenue-generating SMS services. Secondly, the freemium model allows OTTs to provide basic services for free, reducing the need for users to spend money on MNO services, even while consuming significant data. Thirdly, MNOs must invest in infrastructure upgrades to handle the growing data traffic from OTT services, without receiving a proportionate share of the OTTs' financial gains. This mismatch between investment and revenue creates a financial strain on MNOs and undermines their traditional revenue-generating mechanisms.

How can Mobile Network Operators (MNOs) adapt and thrive in the age of OTT services?

Mobile Network Operators (MNOs) can adapt and thrive in the OTT era by focusing on innovation, strategic partnerships, and customer-centric approaches. They can innovate by offering new data-driven services and bundles that complement OTT offerings, such as premium data packages or value-added services. Strategic partnerships with OTT providers can create mutually beneficial relationships. This could involve joint marketing efforts or revenue-sharing models. Focusing on customer needs and preferences allows MNOs to differentiate themselves through superior customer service, personalized offerings, and competitive pricing. By leveraging their existing infrastructure, extensive customer base, and local market expertise, MNOs can recapture lost revenue and secure their position in the evolving digital landscape.