Service exposure as a way of realizing a two-sided business model

By exposing different network assets – for instance SMS, billing capabilities and call setup – operators could enhance their position in the value chain and create new innovative offerings. In this post, the main focus is on how the exposure of various voice capabilities could contribute to realizing a two-sided business model.

We explored the possibilities of a two-sided business model for telcos in a recent blog post. Among other things we discussed growing opportunities in verticals, such as learning and healthcare.

Apart from existing examples in the telecom industry, such as toll-free calls and emergency service calls, another way of realizing a two-sided business model is for operators to move into the area of service exposure – sometimes also referred to as network exposure or API exposure.

Operators venturing into service exposure must consider a number of basic questions before getting started: What capabilities should they expose and to whom should they expose their assets?

The first question is perhaps the easiest to answer: Operators must carefully consider what to expose so that they don’t endanger their own core business. This would be the case if an OTT player, with the help of exposed assets, could build a high-quality telephony service at a lower price.

When it comes to the “to whom” question, the main target group for exposed voice capabilities is the enterprise segment (and developers working at the assignment of companies). Assets are exposed to be integrated into enterprise business processes to help companies become more efficient.

When these questions have been answered satisfactorily, what would a possible two-sided business model based on service exposure look like? An interesting case is where a voice application, CRM system and customer support could interact.

For instance, an app developer working for a big insurance company has developed an intelligent form, which retrieves information from the company’s database. Customers can fill in the form on the company’s website and send it back electronically. 

Questions might arise when customers fill it in and by clicking a button inside the form the customer can come into direct contact with an expert at the company who can answer any queries. The expert has access to the company’s CRM system and can directly see the background information on the customer.

The operator makes sure that the voice application works seamlessly together with the intelligent form and the CRM system. In this case, the operator makes money on the assets exposed to the developer (for example, through a license fee) and the voice solution it sells to the insurance company. The insurance company, in turn, can decide that the “in-form” calls will be free of charge for its customers.

An obvious advantage for the operator with this set-up is that it can make its (voice) services more relevant and integrate them into additional communication flows. In this way, a two-sided business model can help operators reach beyond the limits of their existing business and participate in larger profit pools than those available in a pure connectivity market.

By Bodil Josefsson for the Voice on Telecom     

Four ways carriers can monetize WebRTC

In this blog we have featured several guest posts from Kelly Fitzsimmons, a serial tech entrepreneur and co-founder of the Hypervoice Consortium. The consortium has the mission of articulating and advancing standards, capabilities and potential applications for Hypervoice, or the transformation of voice communications into searchable and shareable native web objects.

Her latest post explored how to monetize voice in a WebRTC world. Now we're happy to welcome her back again, as she examines four ways carriers can monetize WebRTC. You can follow her on Twitter at @schnellerkeller

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When it comes to WebRTC, carrier attitudes range the gamut. What remains consistent is that few carriers have a clear idea on how to make money in a WebRTC world.

At the root of it, WebRTC poses a particularly thorny problem. Historically, web applications – particularly fast adopting ones – have been free or, at best, freemium. But how can revenue from telecom services, such as voice, be stabilized or even grow when people expect it to be free? 

Once users expect free, the most obvious choice is to move up the value chain. Since the core service itself is now table stakes, the carriers have been asking themselves who would be willing to pay for a better version of it (verticals? enterprise? OTT?). And from that point, the next logical focus becomes obvious: quality of service.

That may be the obvious choice, but it is unlikely to unlock radical new stores of value for the carriers. It may stem the bleed for a bit, but there are other players already entrenched in these upscale value-added markets. The carriers risk both showing up late in the game and not being seen as an obvious brand choice.

So, rather than focusing on quality of service, perhaps a better question for carriers is: How are we uniquely positioned to generate radical value while working from our key areas of strength?

In spite of all the bashing today, carriers have many unique – albeit not all that obvious – strengths. For example, with some exceptions, carriers are masterful at billing. The telecom billing systems touch almost every human in the connected world, which leads to their next gift: distribution. From retail counters to the deployment of hundreds of thousands (possibly millions) of mobile sales representatives, telecom knows how to find you. 

And finally, telecom knows a great deal about you. If you have ever been lost, you have likely thanked the high heavens that you walk around with a GPS in your pocket. By linking location data to historical behaviors, carriers are uniquely positioned to help you find the things you want, when you want it, exactly where you are. And with mobile payments, carriers can help you seamlessly complete that transaction – without ever reaching for cash or a credit card.

In sum, telecom can touch, find and provide unique information about and to almost every human on the planet. Not even Google can make this claim, as the vast majority of the world has never been invoiced by Google – let alone seen a sales rep. (And not to put too fine a point on this, but even Google requires the carriers.) 

So regardless of how WebRTC shakes out, many of telecom’s assets are nearly agnostic to the outcome. That said, there are a few ways that the carriers can capitalize on WebRTC now that could pay off big dividends later:

OTT Reselling
By partnering with OTT to test out various applications, the carriers can use their sales and distribution assets to market test apps and watch which ones break through the noise barrier. WebRTC promises to make the app world a far noisier place, which puts the carriers in a unique position. Their distribution strength can help an app find an audience and allow, in turn, the carriers to identify winners early.

This strategy may involve OEM, white-labeling and just plain channel distribution. From a revenue standpoint, OTT reselling provides a quick new revenue stream. For example, today AT&T is reselling RingCentral’s Office@Hand, a simple cloud-based phone and fax solution for small business.

Note how neatly the pricing structure fits within AT&T’s monthly billing. Although net revenue is likely to be modest with apps like RingCentral at first, these reselling relationships could pay big dividends down the line if they:
1. help keep customers on the carrier billing systems
2. provide real-time due diligence to the carriers’ corporate development teams so that they can identify acquisition targets early (read: cheaply).

Core Services
Wouldn’t it be lovely if these new apps didn’t run on the web, but rather utilized the carrier’s core network assets? That is exactly what AT&T has done by partnering with Tropo, provider of the Ameche platform. Today, AT&T is busy building a developer ecosystem on its network. In this emerging model, developers win by being able to stand up apps with carrier grade service levels on the backend. Carriers win by collecting fees from Tropo and other Platform as a Service (PaaS) providers. (For more on this relationship, go here)

When combined with reselling, AT&T would generate a double bottom-line with third-party apps – once through reselling (that is, RingCentral) and then by collecting network utilization fees from the platform providers (that is, Tropo).

Sales Optimization
Thanks to all the network utilization data that the carriers can access, they are in a unique position to see sales opportunities no one else can spot. For example, a surge of calls happens at a customer company tripling their monthly call volume. Who other than a carrier can spot this today? If the carriers were selling apps to solve for call volume spikes, their sales resources could be deployed at the exact moment of customer pain with a helpful cure. In the land of sales, that’s called winning. With this strategy, the carriers would increase net revenue by reducing cost of sales, improving their win:loss ratio, and accelerating time to close.

Small Data
For a moment, let’s think beyond Big Data. Today, carriers possess meaningful Small Data – precise, scientific insights – that can be derived from how businesses are leveraging their services. Instead of being predictive, these consist of historical insights and/or content that is built up over time. If the resulting insights or archived data are meaningful enough, these types of services could become quite sticky. In short, customers are less likely to jump to a competing service provider, if they are going to lose 5+ years of historical business data and the resulting analytics. The Small Data strategy generates annuity revenue through archiving and access fees while reducing customer attrition rates.

To the innovative carrier, all these monetization strategies can be linked together – creating four new, complimentary revenue streams. Imagine a carrier reselling an app that sits on their own network that solves a problem they can uniquely spot and sell to that cultivates long-term, loyal relationships with their customers. And for carriers, like AT&T, that future is already underway.

By Kelly Fitzsimmons of the Hypervoice Consortium

Exploring the possibilities of a two-sided telco business model

Why should only the user pay for communication?

The answer to this question might seem obvious:  of course they shouldn’t.  But in many ways, this reflects the historical one-sided business model of the telecom industry, in which only subscribers or enterprises paid service providers for communication.  This model has served telcos well through decades of growth and high profits, but now operators are seeing their communication ARPU decline as communication gets bundled with connectivity. 

This is forcing to look for new revenue opportunities as communication gets bundled with connectivity. So it’s time to look to the other side, so to speak.

Two-sided business models are common in other industries.  Newspapers are perhaps the most obvious case, with a model built on both advertising and subscriptions.  This model is famously under pressure, with ad revenues falling drastically and some publications leaning more heavily on revenue from subscriptions.  But, even with all this, advertising remains a key factor in the media industry, specifically through the development of native advertising and sponsored content.

Or take NutraSweet, the brand name of the artificial sweetener aspartame. It was initially marketed directly to consumers but is also now “invisible” as an ingredient in more than 5,000 products, such as Diet Coke.  Google also makes use of a two-sided model, in which the company attracts users with free services on one side, while advertisers pay for information and exposure on the other.

And there are existing examples within the telecom industry, from toll-free numbers – where the business pays – to emergency service calls – when the cost is often picked up by government. 

Within telco, there has been a discussion of the two-sided business model for telcos for several years, and it has become clear that telcos have a great opportunity to sell services to “upstream customers” such as developers, governments and retailers, while continuing to focus on their traditional “downstream” customers.

Much of the discussion on the topic, however, has centered on OTT players and how to involve third-parties into the business relationship between customer and service provider.  But we feel there is real opportunity in addressing a two-sided market more directly by expanding into new verticals.

And there are many verticals to explore. A good current example is a federal US program in which the government provides mobile phones for certain disadvantaged job seekers, in order to help them stay in contact with potential employers.

Remote education is another area in which governments could pay for linking teachers with students.  There are intriguing efforts in this area – such as the “cloud school” approach being tried in India and the UK, in which students are linked to teachers solely via video. , And with the explosion in more traditional distance learning, this sector has the potential to be big business – and not a business in which only the student pays for the link.

The Telefónica Group has created an entire company – Telefónica Learning Services – to focus on e-learning, including integrated virtual classrooms and multi-format offerings for desktop and mobile devices. Examples of their projects include working with rural farmers in Spain, schools in South Korea and creating a digital platform with the National University of Distance Education in Spain, including support from MIT in the US.     

Then there is health care.  Hospitals could pick up the cost of communicating with some patients, if the alternative of clinic visits or increased illness proves to be more expensive.  An early use case for this is AT&T’s Remote Patient Monitoring program in the US.   

Here is a description from an eWeek article around its launch:

[The] platform could enable better management of chronic diseases, such as congestive heart failure and diabetes, as well as reduce hospital re-admissions, AT&T reported.  In addition, the platform will provide reminders to patients about their medication routines and educate patients about their conditions.

With some imagination and by bringing communication into new contexts, the two-sided business model will allow operators to reach beyond the limits of their existing business.  And that is something worth taking risks for.

By Bodil Josefsson for The Voice on Telecom
 

Monetizing voice in a WebRTC world

We've focus heavily on WebRTC in recent months, with posts on how WebRTC could work with RCS or the role of the signaling layer. We're also closely following WebRTC discussions on our Twitter account.  This remains a rapidly developing ecosystem, yet one without clear winners or losers.  

In June, we featured a guest post on how to find the right WebRTC partners from Kelly Fitzsimmons, a serial tech entrepreneur and co-founder of the Hypervoice Consortium. The consortium has the mission of articulating and advancing standards, capabilities and potential applications for Hypervoice, or the transformation of voice communications into searchable and shareable native web objects. 

Now we're happy to welcome back Kelly, as she examines the central question of how to monetize voice services in a WebRTC world. You can follow her on Twitter at @schnellerkeller

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If there’s one thing we’ve learned in the past couple years, it’s that voice is about a lot more than just counting minutes. And new markets are emerging to prove this point, as voice transitions from transient to permanent, from transport to asset. 

More than a decade ago, early VoIP innovators such as Skype, Jajah and Vonage disrupted traditional carrier pricing, which swung the value-creation arrow swiftly from telcos to the consumer. Now WebRTC is taking this to a new level because startups no longer have the same kinds of capital requirements that the VoIP innovators faced. So instead of hundreds of disruptive startups, the dominant players are now going to face millions.

Very mindful of this dynamic, telecoms have been searching hard to replace voice revenue with revenue from alternative products, vertical services and even riding up the value chain to enterprise.  However, for all this effort, voice as a service has proven maddeningly difficult to replace as a profit center.

But what if we are looking at voice the wrong way?  What if voice has value in it beyond the quality and the speed in which it can be transported?  Asynchronous voice – best represented commercially today as voicemail and robo-calling – may be the key to unlocking immense value.  We are just starting to see value creation in voice as content and “big voice data,” and in both cases, voice is persistent – not transient. 

Customers are showing that they are willing to pay for value-added voice services that allow them to be more responsive and productive. New billion dollar markets are likely to follow from these first tentative footsteps.

Traditionally, startups fill the gap between the availability of technology and the unwillingness of established players to leverage it.  But dominant players cause disruption too. Apple turned the mobile industry upside down, shifting power from access providers to the handset providers. Sprint reinvented the long distance call long before Skype was even a possibility.

The future of voice requires players, both old and new, to radically re-think the role of voice and where its true value lies. WebRTC virtually guarantees an explosion of new ideas and possibilities, which means incumbents have an opportunity to identify the ideas with the most profit potential and double down on those projects and/or paradigms.  Instead of investing in the disruption itself, the smart telecoms will invest in the inevitable pockets of value created amongst the cinders of disruption.

By Kelly Fitzsimmons of the Hypervoice Consortium

WebRTC – friend or foe of RCS?

At the Voice of Telecom we’ve taken several different looks at WebRTC and what it means for telcos, including, among other things, the role of IMS in the future of WebRTC and how to spot successful WebRTC partners. 

We’ve also written a lot about Joyn and RCS.  But what about the two together?

It might be easy to see the two technologies as competitors – one open source and the other a developing telecom standard.  But this would be short sighted, for comparing WebRTC and RCS head on is like comparing apples to oranges, not apples to apples.

Instead, the right answer for operators is not to choose between the two technologies – they must be viewed as complements.

To recap, WebRTC is a technology that enables web browsers to use a device’s camera and microphone to allow voice and video calls without the use of plugins. One of its main advantages is that it has lowered the barriers for smaller startups and developers to build real-time voice and video calling solutions, and, according to Disruptive Analysis, the one-billion-WebRTC-devices mark was reached earlier this year.

WebRTC is also currently the only existing soon-to-be standardized technology on the market to create horizontal cross-platform communication services, encompassing smartphones, tablets, PCs, laptops and TVs, which adds value for both consumers and enterprises.

WebRTC gives operators the opportunity to offer telephony services to more devices, such as PCs, tablets and TVs. By combining  existing IMS technologies, operators will be able to provide, for example, one-number services. WebRTC is not going to lead to increased revenues and profits on its own, but taking communications to the web can prevent revenues from plummeting and open up new and intriguing enterprise opportunities, particularly for consumer-facing companies initially but with far reaching implications in the future. There is also a great marketing value in WebRTC, showing that operators can stay relevant and encourage innovation. 

One important characteristic of WebRTC, however, is its lack of a standardized signaling layer, and it’s up to each service provider to decide how this is handled.  We discussed this in a post over the summer, and it remains crucial to locate a person and make a call.

This is where IMS and RCS come in. With RCS, operators can offer a wide range of services, including – on top of voice and video – chat, presence, address book, video share, image share and file transfer. It builds on the standards of the telecom industry with the connected quality and reliability.  

So how could an operator use WebRTC and RCS together?  A good example could be to expand the range of devices – such as PCs and tablets – that RCS could support.  An operator could do this by using the WebRTC media framework, IMS for find and connect, with the RCS services on top to give added value.

To give you a sense of the possibilities, earlier this year, analyst Doug Mohney wrote two posts at 

WebRTC world that discussed how RCS and WebRTC could effectively put most current OTT players out of business.  From his first post:

The bigger picture here is that OTT players are going to find themselves displaced by a combination of carrier supported and promoted services in RCS -- because at the end of the day, carriers want to have a large number of customer relationships  -- and WebRTC providing a one-stop shop for developing third-party apps that can tie into third-party services in ways we can't yet imagine.

This is only one possible scenario and RCS is one example of many, in which WebRTC is a potential complement for telcos and not disruptive.  If operators think creatively and are open to new technology and business models, we see many more ways to make the most of telecom and web technologies - working together, not separately.

By Christer Boberg for The Voice on Telecom
 

Vacation time is here

We are taking a summer break here at Voice on Telecom. During July and August we will be off-line, but in September we will be back as usual. Thanks for taking the time to read and comment on our posts. We look forward to returning and get the conversation going again.
All the best from the Voice on Telecom crew!

Exposing assets for enterprise apps is a key to API success for operators

Could it be time for operators to stop chasing the long tail?

The “long tail” consumer app market is worth billions, providing more than a billion smartphone users services such as Google Maps, Twitter and weather reports.  At the same time, there’s been a lot of talk about how operators can expose their services through APIs to take advantage of this smartphone boom.  And, in fact, operators have been exposing SMS and payment capabilities for several years, with some success though not yet for significant revenue. 

But we believe the revenue is out there, though perhaps not where most people are looking – Google Play or Apple’s App Store.  Instead, for at least the short term, we argue that operators need to shift focus to the “short-tail,” that is, exposing assets for enterprise apps, either B2B or B2B2C. This means working with fewer, yet closer, partners that integrate operator APIs into their complete service offerings.

Enterprises are, of course, being transformed by the same web-based solutions as consumers. New technologies and operator cloud offerings enable more contextual communications on a scale impossible to imagine before. But you can’t just translate consumer business models to enterprise.  Engaging and integrating with enterprise solutions requires a sharp focus on improving productivity, business processes and a company’s reach towards its customers.

With new standards such as WebRTC and HTML5, application development has been made exponentially easier, and some examples of enterprise-apps include video collaboration (including document sharing), voice control of apps even while talking on the phone and a range of medical applications.

However, operators also can’t ignore their current developer networks. They need these in order to scout for developers with the ability to create successful apps, and telecom-enabled long-tail services can also be valuable for an operator aiming to generate new revenue from API sales, gain additional revenue from increased traffic, reduce churn or increase network efficiency.

This diagram sums up nicely our vision for how the service exposure business should look :

We've previously highlighted AT&T’s innovative efforts in exposing assets and encouraging developers and have closely followed on Twitter the OneAPI effort from the GSMA.

And once again, AT&T is at the forefront of thinking about service exposure, this time as they shift towards enterprises.  In a recent interview with FierceMobileContent, Laura Merling, vice president, ecosystem development and platform development at AT&T, said "AT&T has always been focused on the enterprise. But now we are saying that this business is an extension of our business."

This means the American telco giant will make APIs available to select enterprise customers that aren’t available to consumer-facing developers, such as security for a financial services company. Merling also said the central challenge in this new initiative will be developing tools for other companies, rather than finished AT&T products.

That’s a big change in mindset, but it’s an important one, as operators reach towards a more flexible and innovative future.

By Bodil Josefsson for The Voice on Telecom

3 keys to spotting successful WebRTC partners

WebRTC opens up possibilities for millions of developers to create new services that we can’t even imagine today.  New players are rapidly forming new ecosystems and transforming current ones, and we can’t yet say what will drive success.  Will it be new interactions? Or new relationships? Have we learned any lessons so far?  There don’t seem to be any definite answers, so let’s start our discussions here.

With that, we introduce our first guest post from Kelly Fitzsimmons. Kelly is a serial tech entrepreneur and co-founder of the Hypervoice Consortium. The consortium has the mission of articulating and advancing standards, capabilities and potential applications for Hypervoice, or the transformation of voice communications into searchable and shareable native web objects.

You can follow Kelly on Twitter at @schnellerkeller

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 Standards don’t create disruption. Innovators do.  The ultimate value of WebRTC will emerge from how well entrepreneurs and technologists put WebRTC into action.  By dramatically lowering the barriers to entry, what used to be hard will become easy.  The result will be throngs of new startups. So then what?

For telco players looking to partner with hot up-and-coming startups, it is important to focus on the few, not the many.  In essence, a telco partner needs to try and spot the "winners" before they know they are winners.  And in this way, a partner's role is not that much different than a venture capitalist. 

So the real question is, do any of the early WebRTC startups have a discernible advantage? 

1.     Capitalization - Has the startup raised capital during the downturn?   The ability to raise funds in the past – particularly during the Great Recession – indicates that their leadership earned the trust of others and, most importantly, their technology has gone through a modicum (if not a lot) of due diligence. This is proof of some staying power.

2.     Team – Does the startup team have experience and expertise in navigating relationships with large strategic partners in the past?  Do they understand how to navigating licensing, IP issues, channel?  The more seasoned the team, the more likely a successful outcome.  If they don’t understand their partner’s world, they are likely to be impatient, which can be exhausting for all parties.

3.     Revenue - Does the startup already have revenue from real clients?  If so, they have moved past market discovery into market validation. This is a critical step that many startups never make.  This step alone will help you significantly de-risk the partnership. If they don’t have revenue now or likely ever, choose another partner.

With so many new entrants, telco has a rich playing field to work from.  These emerging companies offer less nimble enterprises ways to innovate quickly and get new products to market.  Although acquisition may be one tried and true route, early partnering is what many of these young entrants really want.  They want access to your subscriber base and billing systems.  For these startups, revenue is king.

The advantage for telcos in partnering instead of early acquisition is that it de-risks the deals. Do these startup partners really walk the walk? Are your customers interested in their products? By partnering early with a few startups, acquisition becomes easier on the backend.  First concentrate on being the strategic and essential partner.  The more key you are to their success, the better the ultimate terms.

By Kelly Fitzsimmons of the Hypervoice Consortium

The key role of IMS - and operators - in the future of WebRTC

We started last week to look at WebRTC and both the benefits and limitations of its lack of a “find and connect” solution. Today, let’s look at how IMS could play a key role in the future of WebRTC.

Telcos already have invested in an excellent “find and connect” layer in the form of IMS,  and implementing a WebRTC signaling layer with IMS would allow the telecom industry to find  a niche in this new ecosystem. Operators basically just need to offer simple API’s for IMS call control that can be used in conjunction with the API’s for WebRTC.

Having this in the context of a telecom grade network, you get all of the other good stuff like interoperability, security and telco-grade reliability. It would also allow telcos to embrace the web developer community and offer them additional value to WebRTC-based applications and services, that is, adding new technology while telecom core values are kept.

Until the arrival of WebRTC, it was very hard for smaller startups or developers to build real-time voice and video calling solutions – it simply required too much investment. WebRTC lowers the barriers to entry, but even with WebRTC, it’s not that simple for a small innovative startup to design ubiquitous service access with interoperability with existing services, and telco levels of quality and reliability. Most have the technical expertise but lack the experience, scale and network assets of established operators.

However if start-ups and developers worldwide could stand on the shoulders of the telecommunication industry – still the biggest giant in communications – they would not have to reinvent the wheel again and again. By cooperating with telcos, they could suddenly enjoy the same opportunity and resources, create more competitive offerings with standardized technology that allows for full interworking, as the likes of iMessage, Google + Hangouts and Skype, etc.

In reality, the telecom industry is in a great position to drive WebRTC-related innovation by offering PSTN termination, quality of service assurances, interoperability between services, and use of server-side infrastructure to mention a few examples.

So, to answer the question we asked the other day, WebRTC does have the potential to level the playing field. Just not all by itself.

By Christer Boberg and Thea Sommerdyk for The Voice on Telecom

The missing signaling layer in WebRTC is both an advantage and a limitation

Could WebRTC be the best thing since sliced bread? It’s being hailed as a revolutionary technology, and the future of communications. And here at the Voice on Telecom, we’ve certainly been talking about it and its many possibilities since last year and as recently as this March

But while WebRTC opens up VoIP and video capabilities to millions of developers, it has created wild expectations that it will be a game changer.  This may turn out to be true in the future, but for now, WebRTC is only one part of a successful communication service.

So what’s missing then?

We all know that WebRTC enables web browsers to use the camera and microphone to allow peer-to-peer voice and video calls without the use of plugins – this is the media layer.  But to actually make this work, you need to locate someone and make the call, or “find and connect” and this involves a signalling layer.

WebRTC standards cover the media layer but, as Google drove the development of WebRTC, it intentionally disregarded the signaling layer.

This absence of standards allows developers to use WebRTC in any real time communication settings, regardless of the “find and connect” solution and protocol. This can be an advantage but also a limitation, since without “find and connect” there can be no communication between parties, and the choice of signalling protocols can directly impact the success or failure of your service.

So this missing signaling layer is key.

By Christer Boberg and Thea Sommerdyk for The Voice on Telecom

Playing to strength: interoperability will remain a foundation of telco innovation

Innovation and interoperability go hand in hand, and we shouldn’t forget this point as we listen to the buzz around OTT voice and messaging services, with small startups portrayed as nimble and innovative in contrast with more established mobile operators.

GSMA.com

For while there is no denying the appeal of many OTT innovations, it is still interoperability that provides the base for all other services to grow in conjunction with. This was true as the mobile community expanded to six billion users, and it is true today of RCS-e and Joyn, which are fast making group chat interoperable and standardized.

Interoperable innovation is happening in other arenas as well, driven by established telecom companies, with VoLTE and webRTC as prime examples. Here at the Voice on Telecom, we’ve examined the potential of all these services and more, from browser-based communication to HD Voice to WiFi VoIP and video calling.

It’s good to remember that within enriched services, the OTT players are the incumbents and most of the operators are the new kids on the block. But operators can work at a scale that most startups can’t, such as launching interoperable services in integrated packages across many devices, including fixed access such as WiFi and devices like personal computers. They can simplify a service and package it nicely in affordable bundles – comprised of data, devices, enriched communication services and devices – to make adoption hassle free.

Joyn particularly offers this blend of flexibility and interoperability. Operators can already customize and add different services in addition to the core Joyn offering – and this kind of tailored offering will be appropriate depending on every operator’s different market and position. This is true innovation – deciding when to interoperate and when to differentiate.

Peter Carson, senior director for marketing at Qualcomm, put it nicely in a recent interview with telecoms.com:

Where operators have a real opportunity is in bringing to market truly universal, reliable iterations of such services, he says. And while that seamlessness, across networks and international borders, is where much of the time consuming complexity resides, mobile operators should not be disheartened.

And interoperability is going to be even more important as communication services become embedded in every context that can possibly support them.  From a 2009 piece in the Financial Times by Michael Shrage, a researcher from MIT:

But where interchangeable parts enabled the mass production era more than a century ago, tomorrow’s interoperable systems promise richer, more diverse and more customizable innovation. Economic historians and post-industrial pundits alike observe that high-impact innovations come less from scientific breakthroughs than from clever recombinations of existing inventions.

To give a concrete example, suppose that a business person is late making a flight connection and has to rebook their ticket.  Typically they would have to call the airline or travel agent and give all their info.  The level of service drops to the lowest common denominator – a voice call.  But what if the agent already knew who they were, what flight they had been on, and knew why they were delayed?  This kind of contextual information could save important time, but it also leads to a better user experience, and all this means increased loyalty to the service provider.

To go even further, think of all the ways communication could expand into machine-to-machine communication, other industries such as health and transportation and beyond. It’s exciting stuff, but it’s not a vision that can possibly be built on isolated islands of innovation.  We need interoperability to make it a reality.

Going beyond e-mail: Telcos have huge opportunity in enterprise IT support for knowledge workers

How much time do you spend on e-mail, information searches and other collaborations each week? 

According to a new report from McKinsey on the social economy, the average knowledge worker spends 28 hours a week on those tasks. That is an astounding number, and if we could reduce it by only a few percentage points, it would mean a massive rise in productivity for any enterprise, from the smallest to the largest.

As it turns out, these gains are possible today. McKinsey estimates up-to-date existing collaboration and communication tools could cut this time by as much as 20 percent.

But it’s not happening.  Why is that?

The IT industry has spent the last 30 years developing highly structured information repositories, designed for process workers in areas like invoicing, shipping, and HR forms processing.  Meanwhile, the knowledge workers in the middle of the organization – who rarely follow repeatable processes – have been essentially left with e-mail as their sole IT support system. 

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Yet to be able to communicate, coordinate and collaborate effectively between members in workgroups, as well as within and across the borders of companies, is now a fundamental piece of core enterprise processes. Megatrends such as outsourcing and globalization are creating ever more specialized enterprises that are ever more dependent on these same underserved knowledge workers.

Researchers claim that over 80 percent of corporate information today is locked away in the minds of employees. Knowledge workers produce and consume a great deal of unstructured content such as newsletters, research reports, e-mails, and PowerPoint presentations. This information gets scattered between hard drives on their computers, shared network drives, e-mail inboxes, and on miscellaneous Web servers, and the only way to unlock it is through communication, coordination and collaboration. 

For communication service providers, this is a greenfield opportunity of almost epic proportions: to provide enterprises of all sizes, around the globe, with integrated communication, coordination and collaboration systems. It’s a brand new market, currently with no clear market leaders.

This is going to be the quintessential battlefield in what some refer to as the convergence of telecom and IT. And the telecom industry already possesses vital components – infrastructure and the access network – that could completely change the dynamics of the Unified Communication & Collaboration (UCC) market. Furthermore, telcos have little to lose and everything to win, while most IT players are in more defensive positions, with much to lose. 

Yet nothing is for certain, and the situation of knowledge workers is only getting worse, not better. Now is the time for action, for standing still means getting  left behind. 

Mozilla takes WebRTC further at Mobile World Congress but just wait until it goes mobile

WebRTC was one of the big stories at Mobile World Congress in Barcelona a few weeks back.  We’ve been on top of this trend for a while, pushing the service and revenue possibilities for operators.

Mozilla – along with AT&T and Ericsson – made the biggest WebRTC splash with their proof-of-concept demonstration linking a Firefox browser with a user’s mobile contacts list and the underlying IMS network, with its find and connect functionality, allowing for direct calls to mobile phones from the browser.

Integrating the phone number is an especially nice touch, as it could solidify the number as the universal identifier of choice amidst a scattered OTT landscape of confusing and multiple sign-ins.

Analyst Dean Bubley writes that WebRTC is “one of the most exciting and pivotal technologies” he’s seen in a decade.  He also says WebRTC has the potential to benefit most players in communications business, including operators:

“The breadth of companies involved – including Google, Ericsson, Cisco, Telefonica and AT&T – spans both traditional telecoms, enterprise communications and the web. We will see web access added by telcos, for example for IMS access from the browser. And we will also see realtime voice and video communications added by to the web inside social networks, or allowing informal “call centre” functions on normal websites.”

As hot as WebRTC and HTML5 – which WebRTC builds on – are now, we see the real revolution coming when it truly goes mobile. As a tool to encourage developers and highlight the possibilities of WebRTC, Ericsson released the first WebRTC-enabled mobile browser last year. And it looks like mobile WebRTC-enabled applications will disrupt OTT players (and native app builders) far more than they will disrupt established operators.

After all, who needs a standalone messaging or VoIP app when you can just make a call to anybody through the browser?  Of course, this means challenges for operators too, and they can use this opportunity for collaboration and competition to leverage in communication services.

Dancing VoLTE style with Psy to build an indispensable telco platform

In 2013, nothing says you’ve hit the commercial mainstream more than going Gagnam Style with Korean rapper Psy.  So it was fun to stumble across a commercial the superstar made for the South Korean operator LG U+.

What’s especially fascinating here is the fact that LG U+ is promoting VoLTE so explicitly.  There have been doubts in some quarters about whether VoLTE was anything but a replacement service.  We disagree with that, of course. We see VoLTE, in conjunction with RCS, as an indispensable platform to deliver HD voice, video and multimedia services across multiple devices and access technologies.

At the Mobile World Congress in Barcelona, Telefónica demonstrated a seamless voice call handover from a 4G to a 3G mobile network, and they summed its strengths up nicely in a release:

“A key advantage of VoLTE is that it can be combined with several enhanced IP-based services such as High Definition Voice, presence, location, and Rich Communication Suite (RCS) additions like instant messaging, video share and enhanced phone books. Moreover, VoLTE enables prioritization over other data streams to deliver consistently high quality service levels.”

In short, VoLTE is a way for telcos to build on their historic strengths as they enter the all-IP age, so it’s nice to see LG U+ taking it up Gagnam Style. The company has competition in the Korean VoLTE market too.  SK Telecom launched VoLTE at the same time as LG U+ last year, and it is aggressively pushing both HD voice and the RCS-based service joyn, in conjunction with VoLTE. 

And now that we’ve brought up HD voice, we also see it gaining some traction with the public.  It might not be Psy-level, but GSMA made HD voice T-shirts that were distributed at the Mobile World Congress.

And that makes us want to dance “VoLTE style” with Psy once again.

Looking ahead to VoLTE, WebRTC, HD voice and Joyn - and so much more - in 2013

We are off on our winter holiday here at the Voice on Telecom, which means we are looking back at the past year and forward to 2013.  It’s amazing how far the telecom world has come since we started writing just a little more than a year ago.

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Back then, we wrote our first post about trillions of text messages and, soon after, wondered if Telefónica was “going too far” into digital.  And even earlier this year, when we wrote about things like WebRTC, it seemed like we were looking far into the future.

Well, the future has arrived.  We’re now talking about WebRTC as a transformational commercial reality, about the cutting edge services introduced fast and furious by Japanese operators, and about smart operators – like Telefónica, among others – that have committed themselves fully to digital services.

One thing that hasn’t changed is our belief that operators remain in an excellent strategic position, whether in billing or M2M or health care or, especially, messaging and voice services. We’ve highlighted these points in our posts looking at Joyn and RCS – which we believe will gain real traction in the market – and VoLTE, which is crucial not just for operators to move to all-IP but can serve as a platform for crucial services like HD voice and video calling.

So we hope to see you in the New Year, when we’ll all have to move faster just to keep up with the changes and innovations that get to the heart of how we all communicate. 

Glimpsing the future of telecom in a burst of innovation from DoCoMo and Softbank

A Japanese proverb says you can’t see the whole sky through a bamboo tube. It’s a message the country’s operators took to heart long ago in adopting a uniquely broad view of the possibilities of communication services.

Where else in the world can you find apps offering real-time voice translations? Or SMS-based earthquake early warning systems? These are just two examples of services launched by NTT DoCoMo, the country’s largest operator. A serial innovator who recognized the importance of a good software experience in differentiating handsets about a decade before Apple – check out this history of its i-mode platform – only last month DoCoMo launched a venture capital fund to keep the ideas flowing for years to come. Plus, a number of Japanese corporations have already expressed interest in the translation app.

But DoCoMo is not the only innovator in the Japanese market; Softbank has been equally creative in its own way. In February, for instance, it announced a partnership to provide subscribers with remote desktop access and multi-device content management services. Along with Vodafone, Verizon Wireless and China Mobile, Softbank is also a co-founder of the Joint Innovation Lab project to develop mobile services.

SoftBank also enjoyed exclusivity on the iPhone in Japan until very recently – a huge factor in SoftBank adding the most new subscribers of any Japanese operator in every year since 2007. Although a no-brainer in retrospect, this decision to commit so substantially to the iPhone represented a big risk back in 2008, when the Japanese handset market was still ruled by homegrown devices.

Either way, it’s clear that in the land of the katana, operators have long been firmly positioned at the cutting edge of communication services technology. And in many ways they have no choice. As of October 2012, Japan has no less than 127 million mobile subscribers and innovation is essential if operators are to keep them happy. South Korea deservedly gets a lot of press in this area, but paying attention to developments in Japan also seems a good idea.

After all – as Shabette-Concier, DoCoMo’s voice-command personal agent service that responds to queries by taking into account user attributes such as age and gender, is already showing – the phones there now pay attention to you.

Joyn and RCS 5.0 show off their potential in the US with MetroPCS

We wrote recently about how the timing might be right for Rich Communication Services (RCS) after all. And as if to reinforce the point, one of the leading operators in the US chose the same day as our post to announce the commercial launch of an RCS offering on its network.

Just like the big five operators in Europe, MetroPCS will deliver RCS under the GSMA-licensed joyn brand. It offers more than the basic joyn, though: besides the usual mix of free, integrated instant messaging and chat and simplified content sharing, MetroPCS adds WiFi VoIP and Video calling. The timetable is also familiar from previous RCS unveilings, with the joyn app initially available for one high-end smartphone (in this case, Samsung’s Galaxy Attain) before roll-out of additional RCS-enabled devices next year and native support for joyn services to follow.

But there are more differences  this time – the MetroPCS deployment represents the world's first commercial launch of RCS on an LTE network. The operator will also be using as a baseline the GSMA RCS 5.0 standard, which offers a larger feature set than most existing joyn roll-outs. This makes us wonder whether MetroPCS will be looking to deliver differentiated services along with the base service interoperability that lies at the heart of joyn.

And something else is downright unusual. The industry response so far has been almost universally positive, with the normally sober Fierce Wireless even calling the technology “cutting edge”. Compared with the resigned sighs of “too little, too late” that echo around Europe following an RCS launch anywhere in the continent, the willingness of North America to judge RCS on its own merits – of which there are plenty – is really rather refreshing.

Of course, an RCS announcement just wouldn’t be the same without at least one dissenting voice, and in the case of MetroPCS it comes from an unexpected quarter. T-Mobile USA – who expect to close a merger with MetroPCS sometime in the first half of 2013 – remain distinctly lukewarm on the potential of RCS, to judge by recent comments from company CTO Neville Ray.

While Ray said “there are elements of the RCS offering that make sense,” he instead said he sees the rich application environment in the US already driving many of the services that RCS is aiming to populate.

That may be true.  But there is also little to suggest a lack of space in the market for a fully interoperable communications service that works on any device, on any network, with anyone in a subscriber’s mobile address book. Hopefully a post-merger MetroPCS will get a chance to show just why the industry in North America is right to be excited.