Recently I published a blog post on BlogGeek.me titled, "Network outage makes service provider's CEO go Over the Top". It talks about mobile network outage and the use of OTT (Over The Top) services by service provider and telecom equipment manufacturer executives. Naturally, the conclusion was around ease of use and not so much about pricing. I ended that post by saying:
"All this brings me to thoughts about what can the service providers do about this phenomena of users shifting to OTT and the future of VoLTE and RCS in this regards. I guess that is food for another blog post...stay tuned."
Time to continue that thought and bring some new ideas about the future of traditional mobile service providers. A good place to start would be with the key values that service providers offer to their users, and how VoLTE (Voice over LTE) and RCS (Rich Communication Suite) will be used by them when competing with OTT. These competitive differentiators for the service providers would probably include:
* Interoperability across networks--If I'm on service provider A's network and you are on service provider B's network, I can still call you and use all those great RCS services and they will work magically
* Service continuity--Always on; those five 9s we are all familiar with when it comes to carrier grade
* Quality of service--Not only can a service provider assure quality/bandwidth of a specific session, but he can also bill for that quality assurance for that specific session.
All these values are key points in the discussions between the camps of OTTs vs. service providers and the X Billion question--will VoLTE and RCS happen?
Let's take a closer look at each of these values.
Interoperability across networks
This of course is one of the key service provider values to the end user. The model should be that of SMS--it simply works, between networks in the same country and internationally--not to mention simple voice calls. But there is a caveat here: these services require servers on each network to communicate and federate with the other network; there are things like transcoding, protocol moderation, security and QoS (Quality of Service). These functions are all bundled in a big and mighty box called SBC (Session Border Controller)--so mighty and important in the network that Oracle just poured $1.7 Billion on one such company, Acme Packet.
OTTs can, and to some extent already are providing such cross-network connectivity; for example you can IM and call between Yahoo and MSN. Moreover, the ability to post something on one website/blog/service and share it on another service such as Twitter through APIs available to any developer, is a concept OTTs can adopt for their advanced communication services.
Even though interoperability and services working across networks is a key value that service providers bring today, the future lies in:
1. The way service providers will deploy their advanced services, and whether they will give in to the temptation of creating proprietary islands or walled gardens
2. Whether OTTs will allow for connecting between their islands, giving users the option not to switch between applications for reaching different contacts and using different services.
Service continuity
The beginning of this post references another post about service provider outage, but these things happen also in the OTT world; we hear of such "glitches" once in a while. A good place to learn about Web service availability is http://downrightnow.com/. I can't say I did a survey to compare uptime of traditional service providers vs. OTT, but as the cashbox of traditional service providers continues to be crunched, requiring them to reduce their Total Cost of Operations, and as services become richer and more complex, such "glitches" will happen more often.
Moreover, those leading OTTs are built for scalability, some relying on elastic cloud providers, some having a global presence that supports offloading traffic geographically, which makes them more capable of handling local disaster situations.
Source: down right now
Having said that, we the users don't really care about the number of 9s our provider commits to as long as the service has fair reliability as we experience today from the leading OTTs. Therefore, I don't believe service continuity is a key selling point for the service providers when trying to attract the consumer.
Quality of service
As long as we don't pay for the service it is hard for us to complain about bad audio or bad video, but when it becomes too bad of an experience we simply switch to another provider. Users are willing to pay for better service--even consumers are doing that, in many areas of their lives. They pay for toll roads to get faster to their destination, they pay for express delivery of an order they need urgently, and they pay for faster Internet connection.
People are willing to pay for measurable and tangible service premium. That is why a model of instant quality boost for premium cost is a value that users will be willing to pay for; instant satisfaction is what we the users are looking for.
Conclusion
The question of whether VoLTE and RCS will happen does not have a black or white answer. I do believe these networks and services will be launched by a significant portion of the service providers, but I also believe that this is not the right question. The right question in my view is, will users use these traditional providers' services, or will they continue to use OTT?
For service providers to make the users' usage ratio of OTT vs. traditional service provider services lean towards them will depend on the overall quality of experience they provide. If they provide an easy way to start the service, avoiding the need to switch between Apps, providing a good quality and competitive cost, they will be able to sustain their "Service Provider" title, otherwise, they will earn a new title--"Pipe"--and the winners then will be those with the best pipe.
As for the competitive cost, service providers will need to adopt some of the OTT and Web business models. These include in-service purchase (similar to in-App purchase) of quality and premium features for that specific session and other monetization models common today on the Web. The old world models of pay per minute/SMS/MB or all you can eat will not do the job. The service provider cashbox calls for reinventing the revenue model and introducing innovative new ones.
If you have some thoughts about such innovative monetization models and views about this subject, I would love to hear them in the comments below.
* Opinions presented in this blog post are the author's personal opinions and do not necessarily represent those of his employer.
