Future of Voice & WebRTC - Implications & Opportunities for telcos (service providers)

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
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Introduction
 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
 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

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


Basic services’ demand & pricing is falling


“It’s all those nasty OTTs’ fault!!”

STOP looking for a scapegoat
& take responsibility


Voice ≠ Telephony
• Now: 2G & 3G • Future: Smartphones & LTE
Voice
Voice

Telephony

Telephony

Voicemail Gaming, CEBP,
Conferencing surveillance, social
PTT Video voice, TV voice etc
Video, context, sense


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,
Function
and eventually appear as mere features of
functions of other apps or even device OSs


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

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

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.

Peak telephony & SMS is here
Mobile core services revenue,
indicative W Europe Total c40% fall
BASELINE, ie excluding WebRTC 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

Personalisation is done by people
User-selected
Mobile calls portfolio:
SMS perfect fit for
MMS specific use
Email cases

99% of personal + Lowest common
comms for all Mobile calls
SMS denominator just
use cases
(RCS?) 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.

Fragmentation is valuable

Convergence & Fragmentation &
standards 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.


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

Telcos already exploiting Internet

Owned & operated by mobile operators
Usable by anyone, not just subscribers
Via apps & public Internet

Telco-OTT Services


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

Telco-OTT: more than just VoIP/RTC

Comms

Connec- Over 100 identified
Telco-OTT products in the
tivity
market.

Content

Cloud


Biz models may not be obvious

…. Carriers need to move away
from the obsession with
“subscriptions” with
WebRTC/OTT


WebRTC: game-changer & threat

The future?

In the crossfire
Microsoft CU-RTC-WEB ????


WebRTC is a magnifier & catalyst

Now

With WebRTC


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


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
 Vodafone, Telecom Italia, SKT, Smart, China Unicom also on WG
 Increasing anecdotal evidence from client interest


Multiple constituencies involved
Enterprise VoIP
Ground-up
/ UC /
interest in
conferencing
WebRTC (in
moving to
labs etc)
WebRTC

VoLTE & Telco- Apps, developer
OTT teams & HTML5
curious/worried initiatives adding
by WebRTC Telco WebRTC
WebRTC
interest

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

Overlapping universes

Softphones etc
“Gateway into IMS” Telco
services

Pure
WebRTC OTT
apps

Network & platform APIs
Browser-based Telco-OTT


“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?


Some myths to avoid for WebRTC
A quick diversion to some pet topics of mine:

Quality & QoS WiFi

 Impending quali-pocalypse  “Seamless connection”
 Users appear to care less  HetNets
than expected
 Mobile carriers are very
 Some high-Q use cases (eg
sales call) important or in control
 Internet vs. non-Internet  The user & operator are the
 Quality driven by much only stakeholders
more than network
 Eg Coverage (esp for LTE)


Main WebRTC strategies for SPs
Perpetuate legacy models
“Put lipstick on a pig” – eg RCS
Extend on-
net services

Enhance Turbocharge
Improves developer Telco-OTT
platform apps
relevance… but Lower
revenue? costs/complexity &
improve reach &
Sell “virality”
packaged
Sell genuine “new WebRTC
services to
stuff” to existing subscriber Also: invest / incubate
audience


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


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

information@disruptive-analysis.com

Skype:disruptiveanalysis



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