European Mobile Operators Embracing “Over the Top” Faster than North American Ops

Necessity might be the mother of invention where it comes to adoption of carrier-owned over the top applications. Orange (France Telecom) has created and now is supporting “Libon,” an over the top calling and messaging app that operates in a “no incremental charge” “peer to peer” manner when used by people who have downloaded the app.

In joining Telefonica and T-Mobile in sponsoring a branded over the top voice and messaging app, France Telecom has concluded that “joining” the OTT voice app trend is wiser than fighting it. 

That still is not the choice in North America, where firms such as AT&T and Verizon seem to have concluded they are better off not doing so, at least for the moment.

Libon allows users to make free calls and texts to other Libon users around the world, using a “freemium” model, and joining Skype, Viber and WhatsApp, TU Me and Bobsled in embracing an over the top business model for voice and messaging.

The iPhone version is “live” in the Apple iPhone App Store now, with an Android version will  be released early in 2013.

The free version of Libon includes free calls, instant messages and voicemail services, with a premium version costing £1.99 a month through a subscription on iTunes. That includes one hour of international calls to landlines or mobiles in 31 countries, unlimited greetings for voicemails, transcript of voicemails and recordings of voicemails included in notification emails.


For mobile service providers, the fundamental problems with over the top voice and messaging services have to do with the business model, for obvious reasons. Ovum says increased use of social messaging applications had cost mobile operators $13.9 billion (£8.8bn) in lost text messaging revenues in 2011 alone, for example.

But incremental “gains” from OTT voice and messaging, for service providers, might be quite modest. In 2012, global mobile VoIP service revenues might be about $2.5 billion. But mobile voice revenue overall could be in the range of roughly $1 trillion.

In other words, even if they succeed, carrier over the top voice and messaging will not produce all that much revenue.

In fact, mobile VoIP is still worth less than 0.5 percent of overall mobile voice revenues, according to ARCchart.

At some level, the determination is simply that Orange needs to remain relevant as a supplier of communications services, whatever the danger of cannibalizing at least some of its own voice and messaging revenue. T-Mobile and Telefonica taken a similar approach.