& cplSiteName &

What OTT Can Learn From Big Telecom

Steve Leonard
8/29/2013
50%
50%

Over the last couple of years, over-the-top (OTT) voice and messaging applications have gained traction, so much so that Hollywood's own Ashton Kutcher is firing off warning shots to the wireless carrier community, telling them at CTIA they are in danger of losing business to a decentralized model of OTT players offering a better, cheaper user experience.

This is sage guidance from a person who is refreshingly well qualified to deliver it, given Kutcher's extensive and successful venture capitalist background, focusing on cutting-edge technology such as Dwolla, milk, Airbnb and others.

But let's step back. Are traditional telcos really that far behind the times? Are OTT providers really that far ahead? The truth lies somewhere in the middle. Industry experts are pointing a finger at traditional telecom suggesting they take a page from OTT, using a laundry list of critiques. But there is a flip side to that coin.

The fact is, even with the buzz around the latest OTT startups, there is a great deal to learn from traditional telecom; the things telecom providers have done to become one of the most stable and established industries in the world. Some of these lessons include:

  • Break down walls to interoperability: Ubiquitous communications -- the ability for someone in Mali to send a text message to someone in Raleigh -- depends on interoperability. Interoperability depends on standards. Standards depend on competitors getting together to agree on how they will work together. If your app only lets your users communicate with others on the exact same platform (are you listening, social networks?) your opportunity for growth ends once the walls of your garden are reached. To become ubiquitous, OTT needs to create a gate from which users can interact with the world outside.

  • A phone number is one of the most valuable things a person owns: Don't come up with an app that requires users to change their number or get a new one. Figure out a way to let them use your app while keeping the number they have.

  • 911 is the most important service you don't currently offer: Communications services are quite literally lifelines and make traditional telecom ubiquitous. To date, many OTT providers operate within a gray area of existing 9-1-1 requirements. While they can argue they follow the letter of the law, it's harder to argue they follow its spirit. Until OTT providers accept their 911 responsibility, consumers will be left with little option but to continue to keep a landline or wireless phone.

  • Trust in the value of your services and that people will pay for it: Traditional telecom providers don't do things for free, and they learned quickly that add-on services that brought value also brought revenue. Look at caller ID. Once the switch was upgraded it cost traditional telecom nothing to deliver, but they were able to charge customers $5 per month. Before you default to a model based on free services, think hard about the value you bring and don't be afraid to charge accordingly.

    Each lesson requires a nimble internal structure that is open to introspection and change as new regulations surface. But this is just the tip of the iceberg. OTTs will also need to respond to operators' network reliability, service quality and device availability -- features that are harder to simply emulate -- if they want to disrupt a crowded marketplace.

    ó Steve Leonard, EVP & GM, Bandwidth.com

    (14)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    Page 1 / 2   >   >>
    sarahwallace
    50%
    50%
    sarahwallace,
    User Rank: Light Beer
    9/4/2013 | 11:39:42 AM
    Re: Phone number
    With OTT, shelf life can be a concern as users are always looking for the next best thing
    MordyK
    50%
    50%
    MordyK,
    User Rank: Light Sabre
    9/2/2013 | 6:16:18 PM
    Re: Best of both worlds
    Additionally i'd like to point out the FCC's work on NextGen-911 which is looking at adding the capability for OTT apps to interface with emergency services with similar requirements to carrier phone calls. Once a solution is defined they are linkely to mandate it for apps in the US, and if it works there's no reason why other regins wouldn't join the fray.
    MordyK
    50%
    50%
    MordyK,
    User Rank: Light Sabre
    9/2/2013 | 6:12:39 PM
    Re: Phone number
    Thats a great point and with all the data collected by carriers the opportunity the carriers have to create an advetizing platform with analytics second to none that can hep monetize OTT apps and gain a share of its revenues.
    Dean Bubley
    50%
    50%
    Dean Bubley,
    User Rank: Light Beer
    8/31/2013 | 5:01:52 PM
    Services? Or just features?
    One of the problems here is that traditional telco "services" such as telephony and messaging are morphing into applications, and ultimately to features/functions of other services or websites.

    We are used to the idea that phone calls and messages are billed "services" offered to "subscribers". But delivering capabilities as a service is only one approach. Increasingly, we will see these and similar functions embedded into certain "contexts", which will displace usage of the standalone services provided by telcos or the so-called OTTs. (The false distinction between the two groups is laughable anyway).

    The way to think about it is that we have various ways to deliver words from point A to point B. In future, the web will be able to send words as "italic", "bold" or "spoken".

    We'd all laugh at the idea of having an "distant italics service" & subscription - so why do we automatically think that "distant voice services" (tele-phone) is in any way the natural or optimal state of affairs?
    F,Alpizar
    50%
    50%
    F,Alpizar,
    User Rank: Light Beer
    8/31/2013 | 1:47:42 PM
    Re: Phone number
    If the broadband service is not profitable enough, then yes, turn it off... if you don't do it is because you believe that you can get profit from that infrastructure in another way. Better business models are what we need, thats how services get better and markets get open. Here we had a monopoly for long time, when cable operators started to provide voice and internet, we started to have option and better service. Same thing happened with the music industry. New business model, now they don't sell pieces of plastic anymore, sell the sell bit streams.
    brookseven
    50%
    50%
    brookseven,
    User Rank: Light Sabre
    8/31/2013 | 11:43:49 AM
    Re: Phone number
    Its really simple....just stop offering residential broadband service.  Just turn it off.  It is not a mandatory service.

    Now that you have said in your mind...NO....they could not do that!  Look at the profit the carriers are making and ask yourself.  What the carriers are complaining about is that somebody else came up with a good or great business model.  They can NOT complain that their business model is not profitable.  If they were LOSING money then discontinue the service!

    seven

     
    F,Alpizar
    50%
    50%
    F,Alpizar,
    User Rank: Light Beer
    8/30/2013 | 10:48:52 PM
    Re: Phone number
    I believe value will come from the connectivity. OTT applications are useless without the connectivity (try to make a skype call in Mexico over 3G to see if you can...). Also, OTT is not really free... advertising is a way to get revenue from those free messaging apps, an that comes with your location, name, phone number, etc.. all that information that we like to keep private, but give away for "free" services. So, telecom operators will need to reinvent themselves to compete against OTT, as IBM did to compete in the IT business world, went from hardware to software to services.. what would a carrier do?
    Dries Plasman
    50%
    50%
    Dries Plasman,
    User Rank: Light Beer
    8/30/2013 | 5:34:52 AM
    Best of both worlds
    While all of the above is true, solutions exists that allow OTTs to add (or port in) telephone numbers, dial 911 (or 112 in Europe), etc.

    Your companies offers such services in wholesales to OTTs, ours does as well.

    It allows them to focus at what they do best : developping innovative new services (far better than what traditional service providers will ever be able to build themselves), while including the good things of the traditional telephone networks : quality of service, interoperability with other networks (OTT or traditional networks) and 911/112 reachability.

    But these features have a cost and OTT services including them will never be free...

    Cheers,

    Dries (VP Marketing & PM, Voxbone)
    R Clark
    50%
    50%
    R Clark,
    User Rank: Blogger
    8/29/2013 | 10:25:04 PM
    Partners
    Good points - telcos bring plenty to the table, including an actual revenue stream, but it's tough to compete against free. I'm watching to see if more telcos strike partnerships with the messaging firms, on the basis of the 'if you're going to get cannibalised you may as well cannabilise yourself' principle.
    Scott Fincher
    50%
    50%
    Scott Fincher,
    User Rank: Light Beer
    8/29/2013 | 3:00:19 PM
    Re: Phone number

    Great question, Sarah. I am a colleague of Steve's here at Bandwidth. RingCentral is a perfect example of a carrier that is innovating with phone numbers. The company powers talk, text and fax for end-users, all from a single phone number.  This capability has great potential for innovating in enterprise mobility. It's about decoupling a number from a specific device and moving it into the cloud.

    Page 1 / 2   >   >>
    Educational Resources
    sponsor supplied content
    Educational Resources Archive
    More Blogs from Column
    Spectrum sharing is becoming a bigger issue as the 5G radio specification evolves.
    Addressing current and future app demands while laying the foundation for mobile's next big network transition.
    Broadcasters can no longer rely on pulling audiences to the TV screen; they need to pursue their audiences on digital, wherever they are.
    Why advanced data analytics are the future for streaming video services.
    5G could ride the traditional wireless hype cycle, or – quite possibly – break the chain, suggests Nokia's North American CTO.
    From The Founder
    Light Reading today starts a new voyage as part of a larger Enterprise.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    Women in Comms Introduction Videos
    TalkTalk Exec: Find Your North Star at Work

    12|7|16   |   3:38   |   (0) comments


    Women need to find their purpose, a professional North Star, and create a personal board for themselves, according to Alex Tempest, director of partners at TalkTalk Business.
    LRTV Interviews
    Verizon: Beware Unknown Unknowns

    12|7|16   |   04:58   |   (0) comments


    Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
    LRTV Interviews
    ETSI's CTO Talks NFV, 5G & NGP

    12|5|16   |   09:45   |   (0) comments


    Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
    Women in Comms Introduction Videos
    Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

    11|30|16   |   4:10   |   (2) comments


    Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
    LRTV Custom TV
    We Can Make the World More Sustainable

    11|29|16   |     |   (0) comments


    GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
    LRTV Custom TV
    Finding a New Way to Engage Customers & Drive Revenue

    11|29|16   |     |   (0) comments


    Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
    LRTV Custom TV
    Do You Really Need Gigabit Infrastructure?

    11|29|16   |     |   (0) comments


    Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
    LRTV Custom TV
    BTís Openreach Strategy & Its Updates in 2016

    11|29|16   |     |   (0) comments


    A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
    LRTV Custom TV
    ITU: The Broadband Is Our Future

    11|29|16   |     |   (0) comments


    At Ultra-broadband Forum, Houlin Zhao, Secretary General of ITU, discussed how important it is for countries, companies and everybody to be working together to help to build the broadband and digital economies (UBBF2016).
    LRTV Custom TV
    Tackling 5G in Dallas

    11|28|16   |     |   (0) comments


    Here are our highlights of the 5G North America show in Dallas, Texas with Light Reading's Dan Jones.
    LRTV Interviews
    Cox Prepping for Virtualization Trials

    11|14|16   |     |   (0) comments


    In this video interview, Cox's Jeff Finkelstein discusses MSO's plans to test managed business services in early 2017 and tackle Distributed Access Architectures.
    LRTV Custom TV
    Drivers & Potential of NGP

    11|11|16   |     |   (0) comments


    ETSI has created an Industry Specification Group to work on Next Generation Protocols (NGP ISG), looking at evolving communications and networking protocols to provide the scale, security, mobility and ease of deployment required for the connected society of the 21st century. The NGP ISG will identify the requirements for next generation protocols and network ...
    Upcoming Live Events
    December 6-8, 2016, The Westin Excelsior, Rome
    May 16-17, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    Hot Topics
    Cable Nodes Becoming a Choke Point
    Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
    WiCipedia: After-School Coding, Salary Probing & Pro-Parenthood Companies
    Eryn Leavens, Special Features & Copy Editor, 12/2/2016
    Consolidated Snaps Up Fairpoint for $1.5B
    Iain Morris, News Editor, 12/5/2016
    Altice FTTH Bill Could Hit Almost $9.6B in US
    Iain Morris, News Editor, 12/1/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
    Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
    Animals with Phones
    Live Digital Audio

    Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.