Light Reading
Hey, it goes both ways!

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
    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
    Norway's Lyse Smart is showing how broadband-enabled applications can improve the lives of elderly people and provide a cost-effective alternative to traditional care home services.
    If we can build complex systems from simple components with precise functionality, we can more easily change those systems as new technologies arise.
    A list of 10 considerations for municipalities pondering building their own broadband networks.
    Communications service providers need to become digital service providers, but what exactly does that entail?
    Here are some ideas for how cable operators can help low-income households connect to pay-TV and broadband services.
    Flash Poll
    From The Founder
    It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
    LRTV Custom TV
    Distributed Access Architectures – 2

    10|21|14   |   8:51:00 AM   |   (0) comments


    ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
    LRTV Custom TV
    Distributed Access Architectures – 1

    10|21|14   |   9:01   |   (0) comments


    SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
    LRTV Custom TV
    The WiFi Road to Riches – 2

    10|21|14   |   3:58   |   (0) comments


    ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
    LRTV Custom TV
    The WiFi Road to Riches – 1

    10|21|14   |   10:15   |   (0) comments


    SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
    LRTV Custom TV
    Advantech Accelerates 100G Traffic Handling

    10|17|14   |   7:56   |   (0) comments


    Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
    LRTV Huawei Video Resource Center
    Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

    10|16|14   |   4:49   |   (0) comments


    Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
    LRTV Huawei Video Resource Center
    Huawei's Comprehensive Storage Solutions Vital for SVR

    10|16|14   |   6:16   |   (0) comments


    SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
    LRTV Huawei Video Resource Center
    Mexico's Servitron's Impression of Huawei at CCW 2014

    10|16|14   |   6:35   |   (0) comments


    Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
    LRTV Huawei Video Resource Center
    Building a Better Dubai

    10|16|14   |   2:06   |   (0) comments


    Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
    LRTV Huawei Video Resource Center
    Huawei Lights Up Malaysia Partner Maju Nusa

    10|16|14   |   1:59   |   (0) comments


    Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
    LRTV Custom TV
    Evolving From HFC to FTTH Networks

    10|15|14   |   2:19   |   (0) comments


    Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
    LRTV Custom TV
    Exploring the Future of Cable Access

    10|15|14   |   6:23   |   (0) comments


    Cisco's Brett Wingo looks at where cable access architectures are heading, discussing the impact of DOCSIS 3.1, CCAP, Remote PHY, SDN, virtualization of cable networks and related technologies.
    Upcoming Live Events
    October 29, 2014, New York City
    November 6, 2014, Santa Clara
    November 11, 2014, Atlanta, GA
    December 2, 2014, New York City
    December 3, 2014, New York City
    December 9-10, 2014, Reykjavik, Iceland
    June 9-10, 2015, Chicago, IL
    Infographics
    WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
    Hot Topics
    Forget the Internet, Brace for Skynet
    Stephen Saunders, 10/15/2014
    HBO Will Go OTT in 2015
    Mari Silbey, Independent Technology Editor, 10/15/2014
    Google: Carriers & Cloud Providers Need to Cooperate
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/16/2014
    Could Data Be the New 'Currency'?
    Ray Le Maistre, Editor-in-chief, 10/16/2014
    iPad Air 2 Lets Users Switch Carriers Any Time
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/17/2014
    Like Us on Facebook
    Twitter Feed