Back To WWW ; WebRTC a new game changer disrupting the OTT/Telcos

In my last blog I talked about how HTMl5 could potentially disrupt the app market, and the fact that device manufacturers and operators have teamed up to build a platform eco system leveraging HTML5, called Tizen, and the adaption of this platforms by CSP and Telco's.

Enter WebRTC..an open sourced project championed by Google, Mozilla and Opera, to enable Real Time Communications in the browsers via Javascript API and HTML5. This would mean seamless communication between users using browsers with WebRTC capability, regardless of what network/service provider they are from. This technology is essentially going to bring down walls and barriers to communication, and mostly would affect providers who have created boundaries, such as OTT providers who have associated the voice/messaging service to a user-id.

OTT vendors base their strategy around reaching as many users as possible, offering them a compelling free service, locking them into it and then trying to monetize it via four main approaches:

1. Advertising
2. Connectivity to PSTN such as Skype
3. Value-added services, such as multipoint video calling
4. Acquistion prospects in the future.

OTT vendors make their money out of mass usage of their system, and for that, they prefer having users work within the boundaries of their service, and not letting them interact with competing OTT offerings: (Just try calling from Viber to Skype. You can’t.)

Thus WebRTC is inevitably going to disrupt the OTT market, and will it disrupt for OTT players to look at new way of doing things.

How would the Telco's respond to these challenges

HTML5...Disrupting the App Market

In the sidelines of Apple posting a whopping revenue in the last quarter, the technology buzz in the industry is on HTML5 technology and it's wider implications to the app market. This is indeed good news for the Service Providers, who have been relegated to dumb pipe providers, with the whole app industry being dominated by the likes of Apple and Google, consisting the development software/platform, devices/hardware, the developer audience, and the Application/store front supply chain.

Device Manufacturers (Huawei, Intel, NEC, Samsung) and Operators  (Sprint, NTT DoCoMo, Orange, Vodafone, SK Telecom and Telefonica) have teamed up with the stewardship of the LinuxFoundation, to create a robust and flexible platform for application developers called Tizen Association, using HTML5 and Wholesale Application Community (WAC). This portends well for the service provider industry, in order to consolidate it's position from a bit pipe provider to a 'Value Provider' on the pipe.

HTML5, with it's rich capability in working in the context of the client-server programming paradigm, and it's possibility of exploring the device features such as UI, accelerometer, contact list etc. in a device agnostic manner, presents a huge opportunity for the service provider. Further the service provider can expose it's network assets such as network derived location, call-control/signalling, billing etc. through  server side API exposition. This bodes well for the service provider market.

Crtainly 'Code once run anywhere' mitigates the stumbling block which is present in the native app arena, where there has to be multiple development cycles for creating native apps for iPhone and Android, in enterprise mobile development - and albeit with the same look and feel as the native app.

It will be interesting to see how fast service providers adopt to this platform, from the point of view of fostering and sustaining an eco system of developers/solution providers, device manufacturers, and storefronts. Would CSP's have a staid approach and create there own 'siloed' storefronts, or will they follow an open store front participatory model.

I see this has many opportunities, provided the CSP's takes it right. For an example in mission critical systems which are interconnected over the IP network (M2M), HTML5 could be the standard to interchange data and control/policing between two end points running on diverse systems, perhaps the end points being on a global IP network.

 

Telco 2.0 Business Model as a means of Telco Operations Improvement

Telco's the world over are under increased pressure to sustain and grow the business particularly to serve the burgeoning data business brought on by the growth in mobile smart phones, and myriad other services coupled with data. This I speak of a network a decade ago was designed for voice centric and data service with low data rates such as SMS.

Suddenly the operator has to experience a Transformation of their business and operations to meet a changing expectation of the customer. Central to this transformation from the business/opportunity perspective is a business model called Telco 2.0 espoused by STL Partners UK. (The above image sourced courtesy from M/s STL Partners). The said company presents this Telco 2.0 Two sided business model as follows. (see http://www.stlpartners.com/).

The Opportunity

Fortunately telecom's companies possess a whole host of assets that could be exploited much more to support new, sustainable market growth. The key is for telcos to create open platforms that help other service providers (enterprises, SMEs and government) interact with end-users in more efficient ways than they can today.

Telco 2.0™ 'two-sided' telecoms business model

We call this the 'two-sided' telecoms business model, delivering value to and generating revenue from 3rd party service providers as well as end-users. The 'two-sided' business model has consequences for the design of existing services such as conventional voice, messaging and data/broadband products (e.g. see Voice & Messaging 2.0 "What to learn from - and how to compete with - Internet Communications Services") and also creates opportunities to create new revenues and B2B Platform Services.

Notwithstanding the need to Transformation, the greater concern for a typical Telecom company

is how best to transform, amidst a range of internal operational challenges brought on by the decadence of existence. In order to mitigate these challenges Telco's turn on to IT Enterprise Resource Management tools, and intend to make investments in IT with a view to increase operational efficiency. Too often not knowing the outcome of such investments.

Taking a cue from the above Telco 2 business model, I propose a multi faceted approach of a customer, in that the same business model can be applied inward with the customers being the internal customers/functional department of the relevant Telco.

So for instance, the Telco could host the internal ERP system as an asset/capability in this model, and maintain upstream supplier (of goods and services) relationships. This would conceptualize the whole organization function as services (eg. Planning, Finance, Procurement) and map on to the above business model. Another scenario would be the Telco obtaining Media/Advertising services from prospective agents using a hosted CMS tool. The one-to-one functional relationship between departments (eg. Planning and Finance) will be based on this model.

This would meet the operational expectations of the Telco, and would provide a basis to scale up on demand with the growth of the customers/networks. With the appropriate security measures and optimization of the resources, the Telco could market these services to downstream enterprise and SMB customers. By this also the Telco is de-risking his internal IT investments.

Android beyond the phone….

Google shows some startling statistics that there are around 550,000 android based activations per day, and 250,000 apps in the Google Market (this figure does not include third party application stores). The emergence of the android OS among a myriad of devices has enable android to have a 36% market share in the Smartphone market. Despite the fragmentation issues which the OS pose among diverse hardware, and, the user interface being not as consistent in look and feel as the Apple iOS, a profound adoption of the android based devices is evident. However the story does not end there…

The Android OS has transcended from the Smartphone, tablet device, to be adapted to the STB (Set Top Box) market, primarily for Interactive TV and Video services. The key proposition in this is the Android architecture framework.

Android is a software platform, rather than an OS. This helps exploit the potential for deployment across a much wider range of device. The Application framework in Android presents high level services to the application in the form of Java classes. Through the combination of layers and the enabling environment for software reuse, Android goes beyond standard Linux in the provisioning of everything needed in an integrated manner. Furthermore Android Webkit2 UI library is ported across many platforms such as Symbian OS, GTK, Qt, iOS and also embraced by several media SOC manufacturers such as Sigma Designs.

The only aspect lying between the Android capability and the Set Top Box, is the market requirement, and specifically between the “lean-forward” and “lean-back” market. Whilst “lean-back” viewing such as TV viewing at home presents an overwhelming requirement to watch TV and VoD rather than interactive services such as Facebook, Twitter and other apps etc., the “lean-forward” viewing such as OTT,PC-TV presents a good opportunity to provide an admixture of content and applications much akin to what is available in the appstores. Obviously these markets present different challenges to IPTV manufacturers in the whole value chain from encoding, ingest, encryption to delivery, in terms of their positioning.

Notwithstanding, the Android Framework can be the common glue amongst these two markets from a middleware platform perspective, as its feature rich modular framework and consonance to work among devices and STB, will present the ideal platform for service providers.
This does not avoid the Holy Grail for service providers (1) Know your market and the product positioning (2) Holistic technology vision for addressing these market requirements

Rising up to the challenge for Telco's

Telco's the world over are faced with tough challenges in survival in the face of high competition briniging about customer churn and reducing ARPU. Case in point is the imminent acquisition of T-Mobile by AT&T in the US. The downfall of T-Mobile may be due to the shift of customers from T-Mobile to Verizon due to Verizon being the second operator on iPhone. Think again - how would operators wise up to the dilemma of having (say in AT&T perspective) 130M customers with around a USD 60 blended ARPU vs Facebook having a soaring 500M customers with around USD 20 ARPU.

It is evident that mobile applications/smartphones are shoring up the demand for mobile connectivity. An app in a store typically priced at USD 2/= does not take into consideration the cost per bit accrued to the operator as a result of acquiring and delivering the content from network to the device. The splurge of data and content from apps and the evolution of the appstore model has necessitated the operator to scale the network in capacity in exponential proportions. This has also brought about the shift of the pricing models of Telco's from the 'All-you-can-eat' model to the Tiered pricing structure as evidenced recently.

What are the pointers for Telco's in the context of this trend of increased data usage.

(1) Cost per Bit - Telco's have to be conscious of the overall cost structure in serving the customers from customer acquisition -> service delivery -> operation and maintenance. Leaner processes supplanted with increased/rational automation of these processes should help in the long run, and moreover transcending to managed service offerings should also contribute to keeping the bottom line low for the Telco.

(2) Business Model agility - Telco's should move into creating business models and relationships in a dynamic manner and more importantly the internal business processes should support this robustness. This is most important as Telco's would need to have business relationship with their stakeholders such as customers, suppliers in order to form B2B or B2B2C business relationships.

(3) Service Delivery - Telco's should invest on Service Delivery Platforms, that facilitate rapid service creation from orchestration, work flow, to service on-boarding, deployment and service billing. Also central to this will be the ability for third party app development and integration of Telco capabilities such as Content (Voice/Data/Video), Signalling, Network/Information Management, Provisioning and Billing. Hooks to social networking sites such as Facebook and Twitter etc. would also be a nice to have.

(4) Cloud and Content Strategy - With cloud opportunity set to explode Telco's should evolve and adopt a cloud strategy looking at all dynamics such as the overall market, sevices, network, devices. The Content streategy should be tightly ingrained and manifest from the evolution of the cloud.

(5) The Network - The all IP network from the data centre -> core -> distribution/aggregation -> access should be based on guiding principles (i) Delivering customer expectation on defined QoE on services (ii) Support the roll out of wired or wireless access (iii) Should support end user device ubiquity

Apple iOS 5 - To Be or not To Be

In the backdrop of Steve Jobs introduction of the iCloud and iOS 5.0 at the WWDC 2011 conference it is interesting to see the feature set of iOS 5 in the context of the Appstore developer community and the Appstore market.

The primary features of the iOS 5 are, Notification Center, iMessage, Newsstand and Reminders.

Notification center essentially lets you see all the recent notifications pertaining to calls, sms, email all on a single interface and thereby direct access to the respective application. Also twitter messages can be invoked in any interface of the iOS and does not require you to cut and paste the content to the twitter app. Newsstand is a repository of books, papers and magazines wherein registered magazines are seamlessly and automatically downloaded to the Newstand for easy reading. Reminders can be set on tasks which are based on time, place and context and moreover location based reminders can be set using the sensory system of the phone. iMessage gives opportunity to do free messaging across iphone, ipad etc. simlar to Blackberry Mobileme service.

These are some of the 200 odd features of the iOS 5 and further illustration of the features can be seen at the Apple website http://www.apple.com/ios/ios5/gallery.html

All well and good...however as I observe these features or similar type of applications are developed by the Appstore developer community. Eg. ibooks, foursquare and many other messaging and productivity apps. On the one hand Apple kindles the innovativeness by promoting the Appstore and developer eco-system, on the other Apple embeds similar features in the iOS to be in step with the market as illustrated above - thereby stifling innovation. Clearly the iOS has to be a lean and an agile framework, and more importantly Apple should attempt to promote their products and services by leveraging and promoting their best in class apps found in the Appstore. Undoubtedly the 80:20 rule should play in the Appstore market where 20% of the Apps are generating 80% of the revenue.

Google heats up the Game Market

After years of not caring, Google yanked all the console emulators from the Android Market. Never fear, however, you can find them many of them (for free even!) at the off-market Android store SlideMe.

Yongzh, the guy behind some of the most popular Android emulators around–including Nesoid, SNesoid, and GameBoid–dusted himself off after being booted from the Android Market and put his emulators up on SlideMehttp://bit.ly/ioYBg8 (source howtogeek.com).