Light Reading

Operators Can't Kik the OTT Habit

Sarah Reedy
12/12/2013
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Do you Kik? Ever even heard of it? Maybe not unless you're under the age of 20, but it's the latest over-the-top (OTT) platform to join the 100 million club and give the operators a run for their SMS revenues.

The mobile messaging app announced today that it has more than 100 million registered users, triple what it had this time last year. The app has been around since 2010, but Kik CEO Ted Livingston tells CNet it's now signing up around 250,000 new registrants every day, primarily teens in the US.

Kik is essentially another SMS alternative, but it lets its users pick a user name rather than use their phone number. So you can give out your Kik name over other popular OTT sites such as Instagram, Tumblr, and Twitter to chat without having to reveal your phone number. People aren't using it because of the expense of SMS, but because it's more fun.

Kik is also using open APIs to let third-party developers build apps on top of the messaging service for games, music-sharing, or location-based services. One game, Costume Party, a mobile version of Pictionary for Kik users, already has around 4 million users.

One-hundred million may not carry the weight that it used to -- WeChat and Line have around 300 million, and KakaoTalk, Viber, and Tango have all cracked 100 million -- but what's remarkable to me is the level of innovation that continuously comes from the OTT camp, as well as the success that so many of them are having. Kik is now getting more downloads than another OTT success WhatsApp in the US, but WhatsApp is managing to hold on to more than 350 million users.

The traditional knock on OTTs is that they can't achieve ubiquity, like SMS, but that is increasingly becoming a moot point. It's also becoming clear that this type of innovation won't (ever?) come from the wireless operators. The smart ones are striking partnerships in the space, but even those, like Sprint Corp. (NYSE: S) with Jibe, don't even come close. Frankly, even Telefonica Digital's much-heralded homegrown Tu Go service that lets you text from your tablet is boring in comparison to what the OTTs are doing. (See Sprint Jibes With OTT Comms, Genband Acquires fring to Help CSPs Go OTT, Meet Voxox, the OTT CLEC, and Et Tu, Telefónica?)

I'm not sure what the answer is here. I've come to realize it's just not in operators' DNA to be this innovative. I would suggest that they partner, but I'm not sure a company such as Kik or WhatsApp would be interested. SMS certainly isn't dying, but it's also not thriving, and OTTs continue to point out how much it lacks.

The operators could learn a lot from these OTT players, and, if they're smart, they'll play close attention to how the next generation of mobile users chooses to communicate.

— Sarah Reedy, Senior Editor, Light Reading

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MordyK
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MordyK,
User Rank: Light Sabre
12/12/2013 | 2:56:48 PM
Telco as identity
On the financial side I think you're right, but on the carrier's relevance I think one can argue that they can wield some influence and bring real value.

Even if the phone number is not used as the public ID, it's a useful identity for an array of uses. If carriers created a basic framework for using phone numbers as a universal underlying identity - AT&T is doing something along these lines - akin to FacebookConnect and its Google and Twitter equivalent I think it would add relevance.

That said it's gotta be dead simple which again makes it impossible :)
SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 4:14:39 PM
Re: Telco as identity
The GSMA was working on that, too, with is OneAPI initiative to let mobile users have use their phone number as their sign-on and universal identify. I haven't heard much about it since it was launched though. It would have to be very simple and incredibly useful. I just don't see it happening anytime soon.
SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 4:18:21 PM
Kik
Anyone out there use Kik? I hadn't heard of it so I asked some much cooler 15 and 16 year olds. Both had heard of it, and one uses it occassionally. She said that all the juniors and seniors at her high school use it to do group messages. She says,

"I like it but I just don't think there's that much difference between that and imessage except for group texts can be sent faster which is a benefit!"
Carol Wilson
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Carol Wilson,
User Rank: Blogger
12/12/2013 | 4:38:55 PM
Re: Kik
What's the business model? Where are they making their money - on selling the app or things that go with it?
SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 4:46:39 PM
Re: Kik
It's a free app, and I don't think it has ads, but Kik has built a Card platform for games and the like. They're free, but Kik charges brands and other companies for custom cards.
MordyK
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MordyK,
User Rank: Light Sabre
12/12/2013 | 5:02:58 PM
Re: Kik
I did for awhile when I was still on BB and needed a cross platform messaging service but then BB kicked them off because they were competing with BBM. Now i'm largely on whatsapp.
MordyK
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MordyK,
User Rank: Light Sabre
12/12/2013 | 5:04:15 PM
Re: Telco as identity
Te littered fields of carrier possibilities. When you look at nearly every popular app and you look back at old telco promoted possibilities, you see a whole lot of vision but a lack of follow-through
SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 8:25:13 PM
Re: Telco as identity
Yeah, it's pretty frustrating. I bet the execs in charge of innovation at carriers (those that have them) are pretty frustrated too getting good ideas and forward momentum blocked by bureaucracy. 
SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 8:26:43 PM
Re: Kik
Ah yes, things got pretty ugly between the Canadian companies: http://www.engadget.com/2013/10/08/blackberry-and-kik-settle-lawsuit-over-messaging-patents/
MordyK
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MordyK,
User Rank: Light Sabre
12/12/2013 | 8:34:52 PM
Re: Telco as identity
Carrier's are ruled by the RAN guys along with their few "chosen" vendors, and anything that they perceive interferes with their systems will get shut down. If an idea passes muster they put their overengineering mindset and choke the concept until its dies a slow death, or is picked up by an OTT and then they complain that OTT's are riding their networks for free.
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