WebRTC – Implications & Opportunities for Telcos

Dean Bubley, Disruptive Analysis
adapted from presentation at WebRTC Expo SF, Nov 2012

information@disruptive-analysis.com

@disruptivedean

Contact information@disruptive-analysis.com for information on workshops & consulting projects about WebRTC & Future of Voice. Watch for upcoming reports & subscribe to the Disruptive Wireless blog http://disruptivewireless.blogspot.co.uk/p/subscribe-via-email.html

Introduction
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This is adapted from a Nov 29th 2012 presentation by Dean Bubley at the WebRTC Expo & Conference in San Francisco It assumes a working knowledge of what WebRTC technology is, and how it works. If you are looking for a WebRTC introduction, check out:
www.webrtcworld.com/ http://bit.ly/xUfKud http://amzn.to/TS7Adp

This presentation focuses on issues for telecom operators To understand WebRTC implications, it is necessary to first have a good idea of what is happening to voice comms anyway More WebRTC detail & analysis is available from Disruptive Analysis’ consulting services, research reports, workshops & blog
December 2012 Copyright Disruptive Analysis Ltd 2012

About Disruptive Analysis
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London-based analyst house & strategic consulting firm Cross-silo, contrarian, visionary, independent Advisor to MNOs, vendors, regulators & investors Focus on 3G, 4G, operator strategies, VoIP, OTT, disruption Published report on “Telco-OTT Strategies”, Feb 2012 Workshops on Future of Voice & #TelcoOTT

With Martin Geddes Consulting (credited for various slides here) Next events in London & US in H1’13 (futureofvoice.com)

Twitter @disruptivedean . Blog: disruptivewireless.blogspot.com
To understand the impact of WebRTC on telcos, it is first important to understand their current marketplace & trends. WebRTC is then a catalyst & accelerant
December 2012 Copyright Disruptive Analysis Ltd 2012

It’s all looking pretty grim anyway
Voice & SMS saturation & cannibalisation Regulation & competitive impacts Weak content & VAS propositions Economic pressures Ecosystem competition

Connecting the last unconnected Smartphones & data growth Better segmentation, pricing & promotion Innovative services & enablers Embracing & exploiting fragmentation
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Basic services’ demand & pricing is falling

December 2012

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“It’s all those nasty OTTs’ fault!!”

STOP looking for a scapegoat & take responsibility

December 2012

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Voice ≠ Telephony
• Now: 2G & 3G
Voice

• Future: Smartphones & LTE
Voice

Telephony

Telephony Gaming, CEBP, surveillance, social voice, TV voice etc

Voicemail Conferencing PTT

Video

Video, context, sense
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December 2012

Service
e.g. Telephony

Product
e.g. Skype, IP-PBX

Feature
e.g. Zynga IM
We have seen a years-long trend for billable “services” to drift down to ownable products, and eventually appear as mere features of functions of other apps or even device OSs
December 2012 Copyright Disruptive Analysis Ltd 2012

Function

A telephony demand cliff?

It’s not just so-called OTT competitors, it’s apps removing the need for phone calls. When was the last time you phoned a travel agent? Taxi apps are better than phoning
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Telephony: Catastrophe imminent?
Supply Price & revenue Demand

Core question: Can data services offset the decline of voice & messaging? Uncomfortable answer: probably not, based on recent evidence

Disruption and innovation are both inevitable & essential, irrespective of WebRTC
December 2012 Copyright Disruptive Analysis Ltd 2012

Voice & messaging go in-context

Telephony and messaging is increasingly done “in-context” or “in-app”. But in many cases, telco APIs don’t offer the right “raw ingredients” or business model.
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Peak telephony & SMS is here
Mobile core services revenue, indicative W Europe BASELINE, ie excluding WebRTC
Total c40% fall from peak Telephony c80% fall from peak

SMS & today’s mobile data services Mobile telephony
Source: Disruptive Analysis, Telco 2.0 Analysis

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Even without WebRTC, serious revenue falls are expected in basic telco services. Given that telephony is >100 years old, it is now looking an old & creaky product
December 2012 Copyright Disruptive Analysis Ltd 2012

Personalisation is done by people
Mobile calls SMS MMS Email
99% of personal comms for all use cases User-selected portfolio: perfect fit for specific use cases

+
Mobile calls SMS (RCS?)

Lowest common denominator just when needed

“Ubiquitous” & standardised interoperable telco services will increasingly be used only as lowest-common denominators, when no better app/service is available for a given instance of communication. Everyone will curate their own service portfolio.
December 2012 Copyright Disruptive Analysis Ltd 2012

Fragmentation is valuable

Convergence & standards

Fragmentation & innovation

It will fragment “because it can”. Consumer need for ubiquity is over-rated

… new standardised services are neither necessary, nor sufficient. They are irrelevant at best, and actively damaging at worst.

December 2012

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Device diversity = OTT inevitable
Probability of all of a user’s Internet / messaging devices being on a single telco’s network 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Free 3rd party WiFi

Shared data plans only a partial response

# connected devices owned

1

2

3

4

5

6

Users will want same apps & service ID on every device – but will inevitably have multiple telcos. This means that OTT-style services will be mandatory
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Telcos already exploiting Internet

Owned & operated by mobile operators Usable by anyone, not just subscribers Via apps & public Internet Telco-OTT Services
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Harsh truth: Telco-OTT mandatory
• Telephony & SMS prices have peaked • Telephony & SMS demand has peaked • APIs, HD, Video, Bundles only delay the inevitable • Need for new voice-based services beyond “calls” • Too fast-evolving for new “federated” services • Too uncertain / innovation-driven for standards

OTT-style services offer the only hope for continued telco services growth & increased relevance
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Telco-OTT: more than just VoIP/RTC
Comms

Connectivity

Over 100 identified Telco-OTT products in the market.

Content

Cloud

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Biz models may not be obvious

…. Carriers need to move away from the obsession with “subscriptions” with WebRTC/OTT
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WebRTC: game-changer & threat

The future?

Microsoft CU-RTC-WEB

In the crossfire ????
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December 2012

WebRTC is a magnifier & catalyst

Now

With WebRTC
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My enemy’s enemy is my friend….

???

“WebRTC will hurt OTTs more than Telcos!” … & create new, better, more disruptive OTT players. Great.
Actually, my enemy’s enemy is probably even nastier & uglier than the current bunch. Anything that damages Skype is bad news for telcos too
December 2012 Copyright Disruptive Analysis Ltd 2012

Telco involvement with WebRTC

AT&T most visible
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Participant in standards, eg proposing push for notifications Developer-centric approach TokBox acquisition Firefox OS advocacy TUMe & other TefDig products

Telefonica likely a major player


DT & FT at recent events

FT on W3C WG Vodafone, Telecom Italia, SKT, Smart, China Unicom also on WG

Increasing anecdotal evidence from client interest
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December 2012

Multiple constituencies involved
Enterprise VoIP / UC / conferencing moving to WebRTC

Ground-up interest in WebRTC (in labs etc)

VoLTE & TelcoOTT teams curious/worried by WebRTC

Telco WebRTC interest

Apps, developer & HTML5 initiatives adding WebRTC

+ Policy / broadband teams: Can we detect / block / bill for it? Regulatory: What does this mean, how do we do 911 etc?
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Overlapping universes
Telco services
Softphones etc

“Gateway into IMS”

WebRTC

Pure OTT apps
Network & platform APIs

Browser-based Telco-OTT
December 2012 Copyright Disruptive Analysis Ltd 2012

“Easy options” for Telcos+WebRTC
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Charging platform Legal requirements Notifications Numbers / directories WiFi access (in theory…) Network QoS (in theory…) But does any of this really move the needle?

December 2012

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Some myths to avoid for WebRTC
A quick diversion to some pet topics of mine:
Quality & QoS
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WiFi
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Impending quali-pocalypse Users appear to care less than expected
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Some high-Q use cases (eg sales call) Internet vs. non-Internet

Quality driven by much more than network

“Seamless connection” HetNets Mobile carriers are very important or in control The user & operator are the only stakeholders

Eg Coverage (esp for LTE)
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December 2012

Main WebRTC strategies for SPs
Extend onnet services

Perpetuate legacy models “Put lipstick on a pig” – eg RCS

Improves relevance… but revenue?

Enhance developer platform

Turbocharge Telco-OTT apps

Sell genuine “new stuff” to existing audience
December 2012

Sell packaged WebRTC services to subscriber

Lower costs/complexity & improve reach & “virality”

Also: invest / incubate

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Conclusions: WebRTC & SPs
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No definitive answers yet Makes the threats worse & the opportunities better

Battle new OTTs or old ones: result is the same


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Extending “reach” for poor services doesn’t help SPs need to exploit WebRTC to create or resell Avoid the “federation trap” Manage diverse internal stakeholders & teams

WebRTC will be pervasive across telco “domains”

Be nimble

Contact information@disruptive-analysis.com for information on workshops & consulting projects about WebRTC & Future of Voice. Watch for upcoming reports & subscribe to the Disruptive Wireless blog http://disruptivewireless.blogspot.co.uk/p/subscribe-via-email.html
December 2012 Copyright Disruptive Analysis Ltd 2012

www.disruptive-analysis.com disruptivewireless.blogspot.com @disruptivedean

information@disruptive-analysis.com Skype:disruptiveanalysis
Contact information@disruptive-analysis.com for information on workshops & consulting projects about WebRTC & Future of Voice. Watch for upcoming reports & subscribe to the Disruptive Wireless blog http://disruptivewireless.blogspot.co.uk/p/subscribe-via-email.html
December 2012
Copyright Disruptive Analysis Ltd 2012

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