WAC Leading Telcos to Digital App Success

Many telcos accept that they need to encourage third-party developers to work with them to augment their service development efforts and boost revenues from data services. Heavy Reading has been tracking operators' readiness to embrace third-party developer ecosystems for several years.

Yet research Heavy Reading carried out in 2010 showed that a significant number of operators are still reluctant to interact with an untrusted "long tail" of application developers. They remain unconvinced by the investment made by those high-profile exceptions such as NTT DoCoMo Inc. (NYSE: DCM), Sprint Corp. (NYSE: S), Telefónica SA (NYSE: TEF) and Vodafone UK , especially as the telecom industry has failed to make headway against device manufacturers and Internet players such as Apple Inc. (Nasdaq: AAPL) and Google (Nasdaq: GOOG).

These companies are eating telcos' lunch when it comes to building massive portfolios of applications and generating over-the-top (OTT) revenues. They have presented developers with compelling platforms for application development, the prospect of huge customer bases – in its latest results statement, Google says there are 350,000 Android device activations per day – and a relatively simple means of getting applications accepted and published. In contrast, telcos present a fragmented channel to market, with poor track records for developer support, a limited customer base, proprietary toolkits and onboarding processes, and terms and conditions that differ from operator to operator.

So the Wholesale Applications Community (WAC) – an alliance of 28 operators and some 40 vendors aimed at defragmenting the telco channel to market for application developers – is a welcome sign that operators are beginning to fight back. WAC was announced at Mobile World Congress in 2010, but was initially dismissed by many as merely a rerun of earlier attempts to give developers a common client device platform, when it was already clear that the market was making bets on what the de facto "standard" device platforms would be.

Interest in WAC has been building over the past year, as it has shifted focus toward network application programming interfaces (APIs) – which are, unlike devices, under the control of operators and key to opening up the value locked into network assets. WAC's drive to support "onboard once, sell through many operators" is praiseworthy, and the alliance showed up at MWC 2011 with 12,000 WAC-compliant applications in its catalog – no mean feat after barely a year in operation.

Despite impressive achievements to date, WAC still has to counter developer loyalty to device platforms with huge momentum. Through its members, WAC offers developers access to 3 billion subscribers globally. Google's results show that Android has already chalked up 3 billion application downloads worldwide. Developers of consumer applications dislike the constraints of "lowest common denominator" API sets, and if a platform such as Android or Apple continues providing a large enough market, they will stick with it.

WAC's biggest opportunity lies with enterprise app developers that need their apps to run across any network anywhere in the world and are most likely to trade rich platform function for ubiquity. This fact is not lost on WAC vendor supporters – such as Accenture and Alcatel-Lucent (NYSE: ALU) – that are encouraging their developer communities in this direction, as explained in the new Heavy Reading Service Provider IT Insider, "Telcos Take One Last WAC at Digital App Success."

But the report argues that operators also need to play their part in setting up their own platform-as-a-service (PaaS) capabilities to support third-party developer ecosystems that must then be encouraged and given incentives to support the WAC channel. Vendors with service delivery platforms (SDPs)/network exposure gateways/storefront portals have been flocking to WAC in the past year, and this report finds most of them making good progress in evolving their products to support the initiative.

WAC has made a good start, and its 28 operator members is a strong vote of confidence in the third-party development model. It is to be hoped that the WAC 3.0 specifications due in September, which will include two network APIs, will help to persuade the telco skeptics that exposing network assets is worthwhile.

— Caroline Chappell, Analyst, Heavy Reading Service Provider IT Insider

Telcos Take One Last WAC at Digital App Success, an 18-page report in PDF format, is available as part of an annual subscription (6 bimonthly issues) to Heavy Reading Service Provider IT Insider, priced at $1,595. Individual reports are available for $900.