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
    PICMG, which develops open modular standards for embedded computing, looks ahead to the next decade.
    As it embraces SDN and NFV, the networking industry needs to ensure it doesn't create new silos and repeat the innovation-stifling mistakes of its past.
    Give it up for the optical specialists who are more than mere 'plumbers.'
    Operators can cut the cost and complexity of extending legacy services to all-IP environments.
    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 Huawei Video Resource Center
    Interview With Rick Talbot, Principal Analyst, Current Analysis

    10|31|14   |   2:12   |   (0) comments


    At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
    LRTV Huawei Video Resource Center
    Interview With David Snow, Principal Analyst, Current Analysis

    10|31|14   |   2:24   |   (0) comments


    David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
    LRTV Huawei Video Resource Center
    Interview With Roz Roseboro, Senior Analyst, Heavy Reading

    10|31|14   |   3:13   |   (0) comments


    Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
    LRTV Huawei Video Resource Center
    Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

    10|31|14   |   5:25   |   (0) comments


    Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
    LRTV Huawei Video Resource Center
    Interview With Jerry Caron, Senior Vice President, Current Analysis

    10|31|14   |   3:11   |   (0) comments


    At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
    LRTV Documentaries
    Broadband Battles

    10|31|14   |   01:39   |   (0) comments


    This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
    Jonestown
    Mobile Backhaul: Going to the Dark Side?

    10|30|14   |   2:26   |   (1) comment


    Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
    LRTV Huawei Video Resource Center
    2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

    10|30|14   |   4:13   |   (0) comments


    SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
    LRTV Huawei Video Resource Center
    2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

    10|30|14   |   4:08   |   (0) comments


    Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
    LRTV Huawei Video Resource Center
    2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

    10|30|14   |   5:46   |   (0) comments


    Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
    LRTV Huawei Video Resource Center
    2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

    10|30|14   |   3:31   |   (0) comments


    Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
    LRTV Huawei Video Resource Center
    2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

    10|30|14   |   4:29   |   (0) comments


    In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
    Upcoming Live Events
    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
    February 10, 2015, Atlanta, GA
    May 6, 2015, McCormick Convention Center, Chicago, IL
    May 30, 2015, The Westin Peachtree, Atlanta, GA
    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
    Microsoft's Skype Embraces WebRTC on IE
    Sarah Reedy, Senior Editor, 10/27/2014
    FTC Slaps AT&T With Throttling Lawsuit
    Sarah Reedy, Senior Editor, 10/28/2014
    Wheeler Gets Down With OTT
    Mari Silbey, Independent Technology Editor, 10/29/2014
    China's MVNOs Hit the Wall
    Robert Clark, 10/27/2014
    Let's Not Kill SDN & NFV With Silos
    Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
    Like Us on Facebook
    Twitter Feed