Can Apple and the iPhone 5 drive HD Voice and VoLTE?

You can always count on Apple to bring a technology into the mainstream discussion. And the launch of the iPhone 5 has people talking about all sorts of formerly telecom or ICT-specific subjects – mapping technology, bandwidth for video calling, LTE spectrum in Europe, and … HD voice.

The new iPhone supports HD voice, and the service will be supported by more than 20 operators worldwide and will be supported on both GSM/HSPA and LTE networks.

From the Verge:

An iPhone, which will undoubtedly sell tens of millions of units, could be just the catalyst that (HD voice) needed to gain widespread acceptance.

HD voice had already been gaining momentum this year, to the point that Doug Mohney of HD Voice News has said 2012 could be “the year” for HD voice, at least in Europe. And, at least in Australia, where Telstra will support HD voice, the reviews are starting to come in, and they are good.

There is only one hang up in all this good iPhone buzz – HD voice will not be supported in the US, even by Sprint, which offers HD voice service. The problem is that Sprint runs its HD voice service using a different technology than the worldwide standard. So there are lots of articles with headlines like this: Why iPhone 5's Support For HD voice Will Mean Nothing To U.S. Users.

This confusion reflects the benefits of sticking to standards, but in the end any publicity is often good publicity. Most consumers in the US had never heard of HD voice before last week. Now more of them have, and they might perceive it as a cool feature they want. (Plus, it will be available on two networks in neighboring Canada).

Another silver lining is that Verizon, AT&T and T-Mobile seem to be focused on what PC Magazine calls “the real future” of HD voice, which is over Voice over LTE (VoLTE).

The new iPhone will also give VoLTE an indirect boost, as it drives LTE subscriptions, with Verizon in the US particularly looking to leverage its LTE network to attract iPhone users. In turn, this can only help VoLTE gain traction. And VoLTE opens up a lot of business possibilities for operators from video calling to chat to content sharing.

In the following video, Apple praises LTE and video calling, albeit with its own OTT system, FaceTime.

Previously, FaceTime could be used only over WiFi. Now it has gone cellular. Again in the US, AT&T is getting criticized by consumers and net neutrality advocates for only allowing cellular FaceTime usage for subscribers to new shared data plans.

At FierceWireless, Tammy Parker suggests that AT&T could charge for FaceTime usage by the minute. But she also wonders if the company is looking for a showdown over net neutrality.

So what’s the big picture here? We see Apple focusing on making voice calls better, through HD voice and an additional microphone, as well as prioritizing video calling (even if OTT). One of Apple’s strengths is its laser-like focus on consumer needs, rather than just the latest technology. Apple is not going to bother with features that don’t please their customers, and it is clear Apple thinks voice is worth investing in.

Welcome to the speedup: VoLTE, Joyn and Tu Me push back against rising OTT players

We’re back from our summer break here at the Voice on Telecom.  And though we were gone for only two months, it seems that all the trends we’ve been examining since last October are now on fast forward.

On one hand, voice and SMS are under ever-increasing price pressure, at least in places like the US and Europe. (Though let’s not forget that huge swathes of the developing world are just getting connected now, and most operators in all markets will see huge voice and SMS revenues for decades to come).  The clearest example is in the US, where AT&T has just come out with its shared data plans (Verizon did the same earlier in the year). This sparked a net neutrality debate, as AT&T will only allow FaceTime cellular access on the new iPhone to “share plan” customers.

What caused no fuss at all in the media was the fact that both the Verizon and AT&T plans include unlimited voice and SMS.  At the same time, WhatsApp, the OTT messaging company, now sends or receives more than 10 billion messages a day, just months after it hit 1 billion messages. According to a report from mobileSquared, OTT services are affecting traffic for almost three-quarters of operators, link to the whitepaper a big jump from 2011.

But there is lots of good news too.  MetroPCS in the US has launched Voice over LTE, as have two operators in South Korea, SK Telecom and LGU+. This has real potential to kick start video calling and allow developers to expand voice offerings as the VoLTE community expands, and perhaps in the long runs as possible frustration over FaceTime and other OTT video services grows. In Korea, the two operators are branding VoLTE differently but also offering a wider range of VoLTE services, like HD Voice. Both companies also promised to unveil more VoLTE-capable smartphones as the year goes on.

The GSMA-led Joyn initiative also gained momentum with its recent launch by Vodafone in Germany. With Joyn – a suite of features such as instant messaging and video calling based on IMS – up and running in Spain and Germany, there is now a real opportunity for operators to prove its value in competition against the OTT competition.

In its report, mobileSquared says that RCS has real potential as a long-term answer. But it will take time to get enough people in the Joyn community – both through operator interoperability and the widespread rollout of Joyn-enabled handsets.

So what can help bridge the gap? Maybe Telco-OTT efforts like Telefónica’s Tu Me. When we wrote about this pure OTT play, it quickly became our most-read post ever. And as of August, the service had 600,000 users, with growing bases in India and the US, where Telefónica is not present.

Plus, Telefónica only recently started marketing Tu Me with this slick 60-second ad and a revamped Facebook page with more than 131,000 “likes.”

Telefónica Digital head Matthew Key said in July that TuMe served several purposes, from retaining customers leaving for OTT services to attracting users in places like the US. The group has also signed deals with Facebook, Google, Microsoft and Research in Motion to enable direct-to-bill payments, something we said last December that operators should consider.

In short, we are seeing disruption in real time. And while this is often scary to incumbents, we want to keep repeating our core message: there is real opportunity here for operators. But they need to act now before the window closes.

How mobile gaming is key to killer content and more revenue in a commoditized telecom world

A few months ago, we said that better latency and quality of service could be the keys to making mobile gaming a better – and more lucrative – experience for gamers, developers and operators.

Those are important technical steps. But let’s also look at the business models for selling new and improved mobile gaming.  How will gaming set an operator’s or other company’s content offering apart from the competition?

FreeDigitalPhotos.net

If many telecom services are becoming commoditized, content – in the form of things like apps, games and music – will become even more important to both reaching new customers and keeping old ones. Within gaming, the transition to mobile will be based on continuous revenue streams that can be easily developed by either telco, device maker or game developer.

In-game revenue can be either subscription or single purchase, and the business model is also flexible in that any of the three major players can offer the game or upgraded services within the game.

But to make this work, you need great content. Over the long run, people are not going to pay for small games. A game like Order of Chaos is nice on mobile, but if it’s played on a network with built-in voice, it can be a great game that draws in users. Same goes for the highly anticipated new multiplayer version of ShadowGun by MadFinger.  

This goes for more than just first-person shooter games too.  Check out Coventry University in the UK and its Serious Games Institute, with up to 25,000 online students.

It’s also important to realize that there is space in the market outside of Apple and Google. The Japanese game portal Gree is immensely popular worldwide and just launched in beta a tool for iOS and Android. Sony has a series of content offerings, from games to books, and Cricket in the US has its Muve Music plan. Also in Japan, NTT DoCoMo increased its stake in Tower Records Japan in order to provide better music content.

Perhaps most prominently, Samsung just unveiled its own iTunes rival with MusicHub.  Killer content is obviously central to Samsung’s drive to take market share in tablet (and phablets) away from Apple.

Customer loyalty is crucial to build a continuous revenue stream. This can be incredibly hard to build, but, if it happens, there is the potential for years of loyalty and a foothold in a disruptive future.

The future of voice does not have to be dark - We'll be back in the fall to keep the discussion going

We’re taking a summer break here at the Voice on Telecom. We’ll be offline for July and August but will return in September. Things are moving so fast in the area we focus on – the future of voice, SMS and person-to-person communications – that we’re already excited to take in what happens this summer and look ahead to the fall and winter.

FreeDigitalPhotos.net

We’ve been writing this blog and been on Twitter since October.  In that time we’ve tried to reach across the whole spectrum, from four posts on gaming to analysis of Telefonica as a leader in innovation to our takes on new business models, the viability of OTT players financially, innovation in Africa, the Chinese New Year and South Korea, among many other subjects.

What’s had the most buzz?  VoLTE, Joyn/RCS and Telefonica’s Tu ME app. It’s fun that all three of those subjects are about looking forward, rather than dwelling on a gloomy financial outlook.

It’s remarkable how much has changed too in our short time online. We’ve seen the launch of Joyn, Rogers One Number and Tu Me as operators go “Telco-OTT”.  And there is a real sense of innovation and urgency among operators, including openness to finding new ways to make money off of voice and texting channels.  On this level, we’ve examined HTML5, WebRTC and in-web and in-game voice solutions.

It’s a broad, kind of vague, but fascinating topic we’re examining together.  So we hope you’ll come back in the fall and continue the discussion with us.

Apple, Microsoft and how operators can tap into the creative potential of WebRTC

Attempting to guess Apple’s next move has practically become an industry in itself – all you need is a patent filing or a loose-lipped Taiwanese factory mole. In fact, a simple firmware reference will do. But even the tech bloggers probably don’t need to rummage through much trash in Cupertino to figure out that Apple – faced by the constant need to keep their consumer communication devices up to date with network trends – is working on a voice strategy for all-IP LTE mobile broadband networks.

A job ad earlier this spring removed any doubt – the company that already brought us FaceTime is looking for telephony software engineers with “experience in SIP, real-time transport protocol and VoIP related protocols," as well as "familiarity with telecommunication network architectures".

And Apple is only part of the story. Microsoft, in turn, has recently been advertising for HTML5-savvy developers to bring Skype to browsers. So what does it all mean?

It’s probably too early to say for sure. But for the rest of us it’s clear that we’re going to be hearing a lot more about real-time communication on the web (WebRTC) in the coming years. Microsoft and Apple are just some of the players – albeit two of the potentially most high-profile – in a still-nascent sector that could have a huge impact on the way we use the internet.

When services such as Skype become part of the browser experience, the possibility of integrating communication with web pages suddenly opens up. I can read my favorite Apple rumor blog on my tablet, see which of my friends are doing the same thing at precisely the same time, and start up a proper voice conversation there and then.

I don’t need to download a native application, and I certainly don’t need to know anything about web development. But do I need an operator?

That depends on the kind of communication I’m looking for. WebRTC has the potential to enrich communication in areas as diverse as social networks, e-health or education. The chances are that at least one of these offerings will be valuable enough for me to pay an operator for it. This gives operators the chance to develop their own applications and – at long last – force their way into the app store revenue party.

On the other hand, perhaps I’ll just be happy to surf the wave of creativity that WebRTC will inevitably unleash, as I glide from one voice-enabled page to another without paying a cent to anybody. And operators shouldn’t expect any favors from the competition, which will probably do everything possible to cut them out of the picture.

So it’s up to the operators to show they mean business. If they get it right, WebRTC can be the basis for a range of offerings that people won’t be able to do without. And it might reduce the chances of either Apple or Microsoft doing an end-run around the whole industry and succeeding with their own communications services ecosystem. How many bloggers see that one coming?

Facebook and the (lack of) mobile imagination

The world is awash in Facebook news, and almost all of it centers on one theme – Facebook’s lack of mobile success. 

Facebook’s rocky IPO?  All the financial worries revolve around the fact that Facebook is not making money from its exploding mobile user base (the Facebook mobile app is ad-free) and was seemingly not prepared for this huge shift to mobile.

Speculation that Facebook might buy independent browser company Opera?  This is largely about leveraging Opera’s huge mobile browser presence, and gets to the same message as our last post on Mozilla’s Boot to Gecko.  From Rethink Wireless:

The new wave of mobile platforms will increasingly rely on slimline operating systems, with most of the work being done in the HTML5 browser, and content streamed rather than downloaded. This opens the opportunity for web players to seize the reins of the mobile experience and weaken Android and iOS - and also puts browser makers on center stage. Firefox developer Mozilla has already unveiled its cloud OS system, Boot2Gecko, and it would be logical for Facebook to follow suit with a browser partner.

Rumors of a third try at a Facebook phone, including hiring away Apple engineers?  Obvious. Facebook does not want to be just an app on an Apple phone. It wants its own platform. This means building a phone, which is going to be very hard for a company with no hardware experience.

The Facebook phone rumors in particular have generated much skepticism and speculation, with news reports suggesting Facebook could or should buy both Nokia and RIM, among others. GigaOm gave the most lucid summary of all this action:

In many ways, the battle to control the mobile experience is a logical extension of the walled-garden building that both Facebook and more recently Google have been engaged in—that is, an attempt to control almost every interaction with users and thereby convince (or force) them to spend more time within the company’s ecosystem, where more data about them can be harvested. That was the rationale behind the launch of Google+, and it has been Facebook’s primary motivation for virtually everything.

There are a couple questions here.  Is Facebook well positioned to be this kind of company?  And can any company – including Apple – accomplish this in a mobile world of 6 billion phones?

The real question here, however, is … why?  Why didn’t Facebook see their mobile revenue problem coming? Why weren’t they better prepared?

Could it be that Mark Zuckerberg, who is all of 28, is too old?

Yes, that seems a silly question (and people are starting to argue that Facebook will do fine), but it also recognizes how disruptive the shift to mobile is, even for “digital” companies that are experts on the internet. Analyst Eric Jackson says Facebook could fade into irrelevance by 2020 exactly because it is a “second generation” internet company as we enter the “third generation” of mobile.

Maybe we need to wait for kids born after 2007, who grew up swiping at smartphones from the beginning, to solve the mobile revenue puzzle.  Kids like this one that we featured in a post on France Telecom and its OTT efforts:

Or maybe it just means that there is still a window for the people who know mobile best – you know, telecom companies – to make their mark and not concede the playing field to Google, Facebook and all the other OTT challengers.

Are latency and quality of service the keys to crowning the next mobile game master?

We’ve touched on the possibilities of developing the mobile and social aspects of gaming through better voice integration. But let’s get down to the details.  The mobile gaming market is now dominated by either simple games like Angry Birds or Doodle Jump, or mobile versions of the old games included for free on PCs, such as FreeCell and Minesweeper. 

Both these categories are incredibly successful, as mobile gaming companies have leveraged the huge installed mobile user base and the emotional attachment players develop to games that occupy their commutes and spare moments. The gaming demographic is also skewing older, with wealthier players who are more willing to pay for content but also with less time to sit in front of their TV playing at home.

But what about the next step, as in making money? How can operators and gaming companies create experiences to attract both serious gamers to the mobile sphere and casual gamers to more involved – and more lucrative – games?

How about quality of service?

Today most teams in popular multiplayer PC-games like World of Warcraft communicate on services like Skype or Ventrilio, running in parallel to their game, while also using text chat within the game. This ad hoc system could run into trouble if used on mobile networks, especially if the network neutrality debate ends in a way that encourages more operators to follow the lead of TeliaSonera and start charging for mobile VoIP use.

Also, just practically, simultaneous texting and playing, on either a tablet or smartphone is a challenge considering the size of the keyboard on either device.

Latency is also a huge issue in games. Just the slightest pause could mean that your avatar gets shot and killed, especially when facing a player from a high-speed broadband connection.

Fixing this is not as hard as it might appear. Only a small portion of gaming data needs to be prioritized to increase the user experience – perhaps voice communication and certain immediate game functions (like bullets flying).

The gaming industry is in flux right now. The distribution system for the dominant consoles like Wii, Xbox and PlayStation has been oddly unaffected by the digital distribution, with millions of games still sold at stores and then taken home to be inserted into the console.

That is changing, just like in music, movies and journalism. And that means there are openings for new players, whether they be EASports alumni, Czech gaming studios, Japanese social networks … or a telecom incumbent.

Device manufacturers and operators need content that separates itself in terms of quality and functionality. But what if their app stores featured real-time on-line games with integrated voice?  Or prioritization through quality of service? What if the players were billed in the game instead of on their phone bill?

Could this help them compete against the likes of Apple (AppStore) and Google (Google Play, formerly Android Market)?

And will they hit the play button in time?