Quarter Of Smartphone Users To Abandon Calls In 2016 As VR Becomes $1bn Market

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Deloitte’s crystal ball predicts strong growth for OTT services, VoLTE, VoWi-Fi and virtual reality, but mobile ad blockers will not be so popular

A quarter of smartphone users will not make a single ‘traditional’ call over a cellular voice network in a given week 2016 as the popularity of over the top (OTT) voice and messaging applications such as WhatsApp and Skype continues to rise, according to Deloitte.

OTT applications are seen as a threat to mobile operators’ traditional revenue streams, even if they provide an opportunity to sell more data.

One way the networks are fighting back is through packet voice services such as Voice over Wi-Fi (VoWi-Fi) and Voice over LTE (VoLTE), which promise to improve the quality of phone calls. Deloitte predicts that 300 million mobile subscribers will use at least one of these technologies by the end of the year.

Read More: How mobile operators can compete with OTT

Mobile predictions

whatsapp-webIt also predicted that ‘mobile touch commerce’, which involves using a fingerprint or other biometric method to make payments, will rise by 140 percent in 2016, while the impact of mobile ad blockers will be less than feared.

Mobile advertising is seen as crucial for digital publishers and content providers, but Deloitte says just 0.3 percent of mobile users will install an ad blocker, meaning just 0.1 percent of the $70 billion market will be impacted. However experts say some publishers will be disproportionately affected.

“Smaller, online-only publishers that rely entirely on advertising revenues and lack other forms of income, such as subscription, may be particularly affected,” said Dan Ison, partner and head of media and entertainment at Deloitte. “It may also be the case that the most affected news outlets are those focused on technology and gaming news, whose audience is most aware of ad-blockers and will be most likely to adopt them.”

Read More: How Media companies can survive in mobile first era

VR rise

On the fixed side, the number of 1Gbps broadband connections could rise to 10 million by the end of 2016, a tenfold increase, but still just a fraction of the 250 million web users currently on networks capable of gigabit speeds.

It is believed that applications such as 4K video will drive adoption to the point that there are 600 million gigabit subscribers by the end of the decade, while virtual reality (VR) could also be factor. In addition to entertainment, many industries, such as healthcare, see great potential for the technology.

Deloitte says 2016 will be the first ‘billion dollar year’ for VR, with $700 million spent on hardware such as Oculus Rift, and $300 million splashed out on software. It is anticipated that 250 million headsets and 10 million copies of games will be sold this year. Google, HTC, Samsung and Sony are among the other manufacturers readying commercial VR headsets.

‘Pro-PC’ era?

samsung gear vr“The notion of virtual reality is decades old, but, as with many technologies, its commercial potential has yet to be fully realised,” said Ed Shedd, partner and head of Deloitte’s technology, media and telecommunications practice.

“Virtual reality is likely to have applications for both consumer and enterprise, but this year we expect the majority of commercial activity to focus on video games. Companies that are considering using VR should be aware of the hardware cost and the slim content that is currently available.”

Despite the doom and gloom currently enveloping the PC market, it is claimed that younger people are more likely to buy a PC in 2016, despite constant reports of falling sales as smartphones and tablets take precedence.

However one thing that might not change this year is the gender gap in IT. Deloitte says by the end of 2016, fewer than a quarter of IT jobs in developed countries will be held by women, a social and economic issue that costs the UK $4 billion annually and ‘tens of billions’ globally.

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