Service Providers and OTT: WebRTC as a Game Changer?

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2 November 27-29, 2012 South San Francisco Conference Center Service Providers and OTT: WebRTC as a Game Changer? Dean Bubley Founder & Director Disruptive Analysis November 28, 2012

3 About Disruptive Analysis 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 event in London & US in H1 13 (futureofvoice.com) Blog: disruptivewireless.blogspot.com

4 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

5 It s all those nasty OTTs fault!! STOP looking for a scapegoat & take responsibility

6 Voice Telephony Now: 2G & 3G Voice Future: Smartphones & LTE Voice Telephony Telephony Voic Conferencing PTT Video Gaming, CEBP, surveillance, social voice, TV voice etc Video, context, sense

7 Service e.g. Telephony Product e.g. Skype, IP-PBX Feature e.g. Zynga IM Function

8 A telephony demand cliff?

9 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

10 Voice & messaging go in-context

11 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

12 Personalisation is done by people Mobile calls SMS MMS 99% of personal comms for all use cases + Mobile calls SMS (RCS?) User-selected portfolio: perfect fit for specific use cases Lowest common denominator just when needed

13 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.

14 Device diversity = OTT inevitable 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Probability of all of a user s Internet / messaging devices being on a single telco s network Free 3 rd party WiFi Shared data plans only a partial response # connected devices owned

15 Telcos already exploiting Internet Owned & operated by mobile operators Usable by anyone, not just subscribers Via apps & public Internet Telco-OTT Services

16 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

17 Telco-OTT: more than just VoIP/RTC Comms Connectivity Over 100 identified Telco-OTT products in the market. Content Cloud

18 Biz models may not be obvious. Carriers need to move away from the obsession with subscriptions with WebRTC/OTT

19 WebRTC: game-changer & threat The future? In the crossfire Microsoft CU-RTC-WEB????

20 WebRTC is a magnifier & catalyst Now With WebRTC

21 My enemy s enemy. WebRTC will hurt OTTs more than Telcos! & create new, better, more disruptive OTT players. Great. Copyright Disruptive Analysis Ltd. 2012

22 Telco involvement with WebRTC AT&T most visible Participant in standards, eg proposing push for notifications Developer-centric approach Telefonica likely a major player TokBox acquisition Firefox OS advocacy TUMe & other TefDig products DT & FT at recent events FT on W3C WG VF & Telecom Italia also on WG Anecdotes about China Mobile but no confirmation On W3C WebRTC WG list along with China Unicom, Huawei, Baidu, TenCent & China Academy of Sciences Also on W3C working group SKT (Korea) Smart (Philippines) Copyright Disruptive Analysis Ltd 2012

23 Multiple constituencies involved Enterprise VoIP / UC / conferencing moving to WebRTC Ground-up interest in WebRTC (in labs etc) VoLTE & Telco- OTT 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? Copyright Disruptive Analysis Ltd 2012

24 Overlapping universes Gateway into IMS Telco services Softphones etc WebRTC Pure OTT apps Browser-based Telco-OTT Network & platform APIs Copyright Disruptive Analysis Ltd. 2012

25 Easy options for Telcos+WebRTC Charging platform Legal requirements Notifications Numbers / directories WiFi access (in theory ) Network QoS (in theory ) But does any of this really move the needle? Copyright Disruptive Analysis Ltd. 2012

26 Some myths to avoid for WebRTC A quick diversion to some pet topics of mine: Quality & QoS Impending quali-pocalypse Users appear to care less than expected Some high-q use cases (eg sales call) Internet vs. non-internet Quality driven by much more than network Eg Coverage (esp for LTE) WiFi Seamless connection HetNets Mobile carriers are very important or in control The user & operator are the only stakeholders

27 Main WebRTC strategies for SPs Extend on-net services Perpetuate legacy models Put lipstick on a pig eg RCS Improves relevance but revenue? Enhance developer platform Sell genuine new stuff to existing audience Sell packaged WebRTC services to subscriber Turbocharge Telco-OTT apps Lower costs/complexity & improve reach & virality Also: invest / incubate Copyright Disruptive Analysis Ltd. 2012

28 Conclusions: WebRTC & SPs No definitive answers yet Makes the threats worse & the opportunities better Battle new OTTs or old ones: result is the same 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

29 November 27-29, 2012 South San Francisco Conference Center Thank You Dean Bubley Disruptive Skype: disruptiveanalysis