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Tuesday, 14 February 2012

"Semi-OTT" extension services for telcos - less risky than full standalone Telco-OTT

Posted on 01:24 by Unknown
Often, when I refer to Telco-OTT Services (Twitter hashtag: #TelcoOTT) people assume that I mean operators creating standalone Skype-type services, or running completely open social networks or web portals accessible to anyone with an Internet connection.

Yet while that is certainly a critical area for operators going forward, many are more cautious about stepping into the wider world of content or communications services, wary of the execution risks, software expertise required, and cultural dislocation to hit "Internet speeds".

A key intermediate step is what might be termed a "semi-OTT" approach. This involves extending an existing access-based, network-resident service out over the Internet, typically to existing access customers using different devices or in different places.

There are numerous sub-types and subtleties described in my new report but the most obvious two examples are:

  • Extending an operator's core voice and messaging services out to softphones or on-device apps
  • Deploying "TV anywhere" services which give access to home IPTV, from a mobile device
I'm not going to drill into the TV-anywhere trend in this post, although I will note that even Verizon has stepped into that fray recently - and point out that the OTT play is a bit less controversial, as fixed IPTV and cable operators usually only play regionally, so extending reach seems "natural".

The voice and messaging extension is more disruptive, as the services tend to look "Skype-like", at least for existing subscribers. There are numerous sub-types of proposition here - PC vs. smartphone apps, full VoIP vs. "dial-through", WiFi vs. 3G connections, consumer vs. business, roamers vs. domestic and so forth. Some are driven by fixed operators, some by mobile, some by hybrid providers. UMA could also be considered distant relative of this type of thing, as it worked as a Telco-OTT service extension technology, albeit without full VoIP. The report goes through a selection of variants in some depth.

Even with VoIP and SIP, there is some history here back to 2006-2007 and some early attempts at FMC (fixed-mobile convergence - remember that acronym?) from companies like BT (Corporate Fusion) and Telekom Austria (A1-over-IP). To be fair though, none exactly set the world on fire at the time.

The more recent examples of Telco-OTT Voice & Messaging Extension services are more polished, however, exploiting better smartphones, HTML5 browser apps, better UI designs on touchscreens & faster processors, improved SMS integration, faster & more prevalent broadband and WiFi, and so on.

The latest one to emerge is Rogers' OneNumber in Canada, laptop-based, powered by CounterPath's software and hooked into an existing IMS core network and using an existing mobile number. There's a good write-up here.  [disclosure: CounterPath is a client of Disruptive Analysis]

It is highly noteworthy that Rogers has gone for a proprietary OTT extension to IMS. In my mind, this makes MUCH more sense than trying to use a standardised client such as RCS or VoLTE.
  • Firstly, it's faster to market and doesn't need protracted rounds of negotiation between local operators. The telco has the choice to start with PCs, smartphones, featurephones, WiFi or whatever depending on its local conditions and can get started without waiting for the standards bodies to catch up
  • Secondly, it can use a variety of best-of-breed components - browser-driven vs. app, acoustic elements like codecs that are the operator's choice and so on. The UI or UE is much more customisable, for example with aspects like "friend invitation" and presence.
  • Thirdly, it exploits the cloud for doing interoperability only where the operator wants and where it makes commercial sense. Sometimes, interop can be blocked for marketing and competitive reasons (the video-call aspect of the Rogers service is on-net only between subscribers). The cloud platform can also do security, transcoding and so on.
  • Fourthly, the operator can make various "controversial" local partnerships - for example with Skype or a foreign operator if they choose.
  • Fifthly, it makes working around local preferences for numbering, identity, interconnect rules more flexible. For example, a Middle-Eastern telco might want to use email or password/PIN as a login, as many users keep mobile phone numbers strictly private.
  • Sixthly, it doesn't require extending IMS down to the device. This means it's usable on non-SIM devices, competitors' phones, it's not hard-coded into the OS or chipset, it can be easily removed or updated or debugged - it looks like any other app or browser client, rather than tightly-integrated telco bloatware.
In Rogers' case it looks like the deployment is slick but relatively conservative (as I'd expect from Canada - a market where 3-year mobile phone contracts are still common) but it will be interesting to see how it evolves. It appears to be intended to displace some users' Skype/SkypeOut use when on their PCs, by giving better experience for SMS and more free calls. The GigaOm article speculates about a Facebook-embedded version similar to T-Mobile US's Bobsled, for example. I'm curious to see what a smartphone or tablet version might look like.

One of the things I'd note about services of this type is that localisation is very important. So for this example, outside the US, the PC-to-mobile call switching concept might encounter problems from regulators, as interconnect fees depend on whether termination is on a fixed or mobile device / number. In the US and Canada, there isn't the same distinction in numbering or termination fees. Other regional variations will reflect Net Neutrality rules, the prevalence of WiFi, demographics of laptop ownership and so on.

I think that this type of "unilateral" service innovation using OTT-style components is far more likely to succeed than the "forced ubiquity" seen in new standardised service platforms like RCSe. As I pointed out the other day, the lowest-common denominator approach is likely to fail - and may even accelerate damage to core voice and messaging revenues if badly implemented. 
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