Light Reading

What OTT Can Learn From Big Telecom

Steve Leonard
8/29/2013
50%
50%
Repost This

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
    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   >   >>
    More Blogs from Column
    Not everything you thought you knew about multi-play services is necessarily so.
    Small cells have taken far longer than many have expected to take hold in the market, but now, as the industry is maturing, what's needed for several different deployment scenarios?
    Will eMBMS be the mobile broadbcast technology that takes off, or the latest in a line of flops?
    Those consumers who watch the most video on mobile devices may actually be willing to pay for it too.
    There are several things the FCC must do to make the IP transition successful for service providers and consumers alike.
    Flash Poll
    LRTV Documentaries
    Cable Eyes Big Technology Shifts

    4|16|14   |   03:02   |   (4) comments


    US cable engineers are facing a lot of heavy lifting in the coming years, notes Light Reading Cable/Video Practice Leader Alan Breznick.
    LRTV Custom TV
    Maximizing Customer Experience & Assuring Service Delivery in an IP World

    4|15|14   |   4:57   |   (0) comments


    Steven Shalita, VP of Marketing, NetScout Systems, Inc., discusses the challenges cable/MSO operators face in assuring the delivery of new IP-based services. Key points include the value of proactively managing performance, and using rich analytics and operational intelligence to better understand service and usage trends, make smarter business decisions and ...
    LRTV Documentaries
    Bye-Bye DVD: Consumers Embrace Digital Video

    4|10|14   |   04:17   |   (6) comments


    Veteran video analyst Colin Dixon, founder and principal analyst of nScreenMedia, says research shows 56% are using digital video already.
    LRTV Documentaries
    Video: TW Cable Puts Multicast Gateways to the Test

    4|8|14   |   04:13   |   (1) comment


    Tom Gonder, a chief architect at Time Warner Cable, explains how its trial of multicast gateways is impacting IP-based video plans.
    LRTV Custom TV
    Managing & Monetizing Big Data in Operator Environments

    4|7|14   |     |   (1) comment


    At Mobile World Congress, Gigamon's Director of Service Provider Solutions, Andy Huckridge, and Heavy Reading Analyst Sarah Wallace discuss the 'big data' issues facing carriers and operators today.
    LRTV Huawei Video Resource Center
    Data Center Energy – Build Your Data Center in a Modular Way

    4|7|14   |   2:13   |   (0) comments


    Dr. Fang Liangzhou, VP Network Energy Product Line, shared his thoughts about the challenges for data centers during CeBIT 2014.
    LRTV Huawei Video Resource Center
    Agile Network Solution – An Overview of Huawei's Agile Network Solution

    4|7|14   |   2:31   |   (0) comments


    Ajay Gupta, Director of Product Marketing, Networking Product Line, gives an overview of the Agile Network Solutions during CeBIT 2014.
    LRTV Huawei Video Resource Center
    Huawei’s eLTE Voice Trunking, Video and Data Applied for Railways

    4|7|14   |   1:38   |   (0) comments


    Gottfried Winter is the Sales Director at Funkwerk, a German specialist in GSM-r terminals and a long-time partner of Huawei. At CeBIT 2014, Winter talks to Light Reading about this partnership and the integration of enhanced voice trunking, video and data functions.
    LRTV Huawei Video Resource Center
    LeaseWeb Speaks Highly of Huawei's Datacenter Products

    4|7|14   |   1:37   |   (0) comments


    Rene Olde Olthof, Operations Director LeaseWeb, talks about the next data center transformation during CeBIT 2014.
    LRTV Documentaries
    Comcast: Reshaping the Cable Network Architecture

    4|3|14   |   07:11   |   (8) comments


    Shamim Akhtar, Comcast's architect and senior director of network strategy, explains why the cable company is moving to a more distributed network architecture.
    LRTV Custom TV
    VMware CEO Pat Gelsinger at Mobile World Congress

    4|1|14   |   3:41   |   (0) comments


    VMware CEO Pat Gelsinger speaks to Heavy Reading about the value of virtualization spanning from the data center to service provider networks to mobile devices.
    LRTV Huawei Video Resource Center
    Analysts' Impressions of Huawei SoftCOM at ONS 2014

    4|1|14   |   1:11   |   (0) comments


    After visiting the Huawei booth at ONS, Lee Doyle of Doyle Research gives his appraisal of Huawei's SoftCOM solution.
    Hot Topics
    BlackBerry Invests in Healthcare IT Startup
    Sarah Reedy, Senior Editor, 4/15/2014
    Cisco, Juniper Treating Gear Against Potential Heartbleed
    Dan O'Shea, Managing Editor, 4/11/2014
    Cisco & VMware Are Apple & Google of SDN
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/14/2014
    T-Mobile Petitions Operators to Kill Overages
    Sarah Reedy, Senior Editor, 4/14/2014
    Mobile Apps Susceptible to Heartbleed, Too
    Sarah Reedy, Senior Editor, 4/14/2014
    Like Us on Facebook
    Twitter Feed