& 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.

    — 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
    WiFi is offering a challenge to the network-centric cellular status quo and that's something that mobile network operator CEOs recognize, believes Devicescape CEO Dave Fraser.
    NFV can bring operational headaches as well as operational gains, argues Andy Huckridge.
    5G is about so much more than just very high bandwidth and low latency – and SDN is going to play a key role in enabling 5G full potential, argues ONF Executive Director Dan Pitt.
    To ensure the best possible customer experience, service providers must find ways to make more performance metrics available to users.
    How cable operators can prepare to grasp the mobility opportunity.
    From The Founder
    Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Documentaries
    LRTV Report: Mobile Core Innovation

    4|28|16   |   25:32   |   (0) comments


    Hear from multiple industry experts from Deutsche Telekom, SK Telecom, Heavy Reading, Huawei, Cisco, Ericsson, Nokia, NEC and many more about developments in the mobile core as operators virtualize their IMS and evolved packet core systems and prepare for a 5G world.
    LRTV Huawei Video Resource Center
    NFV World Congress Highlight

    4|26|16   |     |   (0) comments


    The highlight of the NFV World Congress contains exciting telecom news. Join us for an inside look at Huawei's ICT 2020 plan and its latest collaboration with industry leaders.
    LRTV Interviews
    Unified Comms Finds Its Voice

    4|25|16   |   03:44   |   (0) comments


    Peter Quinlan, VP of UCC Product Management at Tata Communications, talks about the evolution of the unified communications and collaboration services sector and how voice is now a big part of current developments.
    LRTV Documentaries
    So... What Do We Do Now?

    4|25|16   |   03:24   |   (0) comments


    After a long hiatus, Max Dingman, the CEO of a GeeGhiz, returns for a motivational board room pep talk.
    LRTV Documentaries
    NAB 2016 Highlights

    4|21|16   |     |   (0) comments


    Light Reading's Cable/Video Practice Leader Alan Breznick climbs down from the slots to tell us about the latest news in broadcast technology at NAB 2016 in Las Vegas.
    Between the CEOs
    CEO Chat: Deepfield's Craig Labovitz

    4|21|16   |     |   (0) comments


    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Shades of Ray
    Leading Lights 2016: Shortlists Announced

    4|20|16   |   0:53   |   (0) comments


    The judging is over and the Leading Lights 2016 shortlists have been published -- you can see who made the cut by clicking on this link.
    LRTV Custom TV
    Introducing MulteFire – Qualcomm at MWC 2016

    4|18|16   |   3.29   |   (0) comments


    MulteFire is the latest option for using LTE in unlicensed spectrum. As oppose to its close 'siblings', LAA and LTE-U, MulteFire operates solely in unlicensed spectrum, which enables it to offer the best of two worlds – LTE-like performance with WiFi-like deployment simplicity. In this interview, Sanjeev Athalye, Sr. Director, Product Management at Qualcomm ...
    Between the CEOs
    CEO Chat: Grant Van Rooyen of Cologix

    4|18|16   |     |   (0) comments


    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    LRTV Huawei Video Resource Center
    ONS 2016 – Demonstration of Huawei's NetMatrix Multi-Vendor SDN Orchestrator

    4|15|16   |     |   (0) comments


    This demonstration shows how Huawei's NetMatrix SDN Orchestrator (SDN-O) addresses an operator's core service agility needs for services spanning multi-domain, multivendor networks: it includes a demonstration of:
    - Rapid New Service Design: using YANG to model a complex example of multi-domain, multivendor L3VPN network connectivity service that ...
    LRTV Custom TV
    AT&T Wants to Own North Carolina

    4|15|16   |     |   (1) comment


    Venessa Harrison, president of North Carolina for AT&T, tells how the company will expand its GigaPower service beyond the seven N.C. cities it already serves.

  • This blog, sponsored by AT&T, is the second part of a ten-part series examining next-generation broadband technologies titled "Behind the Speeds."
  • LRTV Interviews
    Will NC Be First Gigabit State?

    4|15|16   |     |   (1) comment


    Alan Fitzpatrick, co-founder of Charlotte Hearts Gigabit, spells out the state's progress in at least starting to wire nearly every major market for gigabit service.
    Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Ultra-Broadband Summit, Hong Kong
    Iain Morris, News Editor, 4/27/2016
    GoT Fans Curse HBO (Not Right) Now
    Mari Silbey, Senior Editor, Cable/Video, 4/25/2016
    Analysts More Than Bullish on Comcast MVNO
    Mari Silbey, Senior Editor, Cable/Video, 4/22/2016
    Mitel Asks: What Time of Day Do You Shower?
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/25/2016
    Charter Jumps Gun on TWC Restructuring
    Mari Silbey, Senior Editor, Cable/Video, 4/26/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.