Summary slides from the inaugural Telco-OTT workshop from Disruptive Analysis Ltd and Martin Geddes Consulting Ltd. Telco-OTT is the description of telecom operators’ own Internet-based (over the top) services. While the telecoms industry likes to claim that companies such as Skype, Google, Facebook and Netflix exploit their “pipes”, the truth is that the operators themselves do exactly the same thing. Although telecom-branded Internet services have only had minor success to date, various market trends are making them both more common – and critical to the future success of the telecoms industry. The old-fashioned “integrated” concept of linking “services” to ownership and sale of network capabilities is becoming untenable, and telecom companies need to learn how to transition to an alternative model. Initially, most operators will just extend their current “on-net” services over the Internet – a sort-of partial Telco-OTT approach. However they are also creating their own completely unlinked web-based services in areas as diverse as VoIP, content, cloud services and connectivity. This presentation is a sample of what is discussed in the live Future of Voice / Telco-OTT workshops, and Disruptive Analysis’ strategy report on Telco-OTT Strategies.

1. Introduction to
Telco-OTT (‘over the top’) Services
dean.bubley@disruptive-analysis.com
mail@martingeddes.com
© 2012 Disruptive Analysis Ltd and
Martin Geddes Consulting Ltd

2. Telco World OTT World
Service-centric Experience-centric
Telco-controlled devices Any combination of
Telco-owned access device, access
Telco-created services and service*
Network roaming Experience roaming
* Supported within any one ecosystem
This is the familiar world …and this is the world
of telecoms service they see encroaching on
providers… their territory

3. The telecoms world today
IMPORTED
Interconnected
IMPORTED call & SMS A-B
CLOUD
IPTV, WEB APPS
CONTENT
Telco A Telco B
Interconnected/federated
services make up the bulk
of telecoms profits
Telco C EXPORTED
EXPORTED BULK SMS
CONTENT
DELIVERY
On-net call /
SMS C-C

4. The “traditional” vision of future IP/4G telecom
Interconnected
VoLTE & RCS A-B IMPORTED
IMPORTED M2M
HDTV, SERVICES
SOCIAL TV
Telco A Telco B
“More of the same” has
been the main strategy
response to OTT
Telco C EXPORTED
EXPORTED RICH APIs
QoS
DELIVERY On-net VoLTE /
RCS C-C

5. Sessions Subscription Service
based
Regulated bundling
Minutes & Telco Converged
messages
World Services
Customer Phonebook
-centric Ubiquity &
loyalty &
churn Interconnect
This response is based on
unspoken assumptions as
to “what really matters”

6. Problem:
What worked in the past…
…won’t work in the future

7. Because in parallel….
Consumer Enterprise Contextual
Comms Comms & BYOD change
But telcos keep pursuing a
“convergence” approach
when “divergence” rules…

8. Muliplicity of services
+ Multiplicity of devices
+ Multiplicity of networks
+ Multiplicity of ecosystems
+ Multiplicity of interactions
Federated telecom services
…and telcos rely on (lowest common denominator)
“ubiquity” – buy they can’t
even deliver that any more

9. Device diversity means OTT models inevitable
Probability of all of a user’s On-Net
Internet devices being on a • WiFi roaming & Next-Generation
single telco’s network Hotspot
100% • Telco QoS (?)
Free 3rd party WiFi
80%
60% Off-Net
40%
• More devices (and rising)
20%
• More (free) WiFi & 3rd party connections
0% • More places of use
1 2 3 4 5 6 • Roaming & federation scaling issues
# connected devices owned • Slow uptake of triple/quadplay
The math of a multi-device
world works against the
federated telco model

10. Service
e.g. Telephony
Meanwhile, the Web is
turning telco services into
browser capabilities
Product
e.g. Skype
Feature
e.g. Xbox Live
Function

11. Unsustainable Going from Changing user Collaboration is
number of local scarcity to behaviour too slow,
service abundance in (apps are cool, bureaucratic &
creators apps not geeky) non-creative
NOW!
Smartphone
Operators need & tablet
to compete at a penetration
service level So it’s time for rocketing
a change of strategy
Clever adaptive
No more “you’ll Good-enough
Viral uptake of software
eat what you’re fixed & mobile
apps makes OTT
given” networks
work better

12. $1tn question
How can telcos meet the
OTT services challenge?
(deep breath…)

13. Answer:
If you can’t beat them…
…join them
(…phew!)

14. Telco World Telco-OTT World OTT World
Service-centric Product-centric Experience-centric
Telco device Mixture of telco and Any combination of
Telco access 3rd party devices, device, access
Telco service access and services and service*
Network roaming Experience roaming
?
Bring the best of both * Supported within any one ecosystem
worlds together

15. Telco World Telco-OTT World OTT World
Service-centric Product-centric Experience-centric
Telco device Mixture of telco and Any combination of
Telco access 3rd party devices, device, access
Telco service access and services and service
Network roaming Experience roaming
Comms
Connec
-tivity ?
There are four Telco-OTT
segments – already with
Content Cloud
many products & services

16. How?
Build businesses that…
…use OTT strategies

17. Operators must offer OTT extension services
Operator A is at a
competitive
disadvantage
Telco A Telco B
C-IPTV app on 3G Interconnected call
(A gets data C-B
charges)
On-net rich IP
A Prisoners’ Dilemma call & UC C-C
effect forces losers to Telco C
carry cost, but no revenue Telco-OTT disrupts call &
SMS origination and
termination regimes
Telco C’s domain
OTT extension

18. Logical end-point? Full Telco-OTT services
Telco C’s OTT
apps
Telco A Telco B
We are seeing a
free-for-all to retain the Telco C
user & billing relationship
On-net QoS-
optimised call C-C

19. OTT is a trade-off for users
More choice of applications
Wider distribution for applications
Lower cost of usage
(Sometimes) better performance at
Demand
low network load
Make the trade-off to give
users a broader reach of
Performance is
richer services
- more variable, and
- worse at high network load

20. OTT is a trade-off for telcos
New markets & new customers
Extend value of existing services & retain
customers
Remain relevant beyond transmission
Supply Direct competition with Internet-OTT
Accept that your business players & “cult of free”
strategy needs to change Lack of control can damage brand if
to achieve this experience is poor
Stresses organisation and exceeds
core competence

21. Create value propositions
that address both telco
and OTT characteristics
Telco-style Familiar Functionality OTT-style
services Transmission
Reach services
Convenient Storage Delivery
Mobility Universality
Tailored
Rentable
Usability Ubiquity
Coolness
Preinstalled Relevance Governance
Exclusivity
Availability Urgency
Simple Personalised
Accountability
Dependable Affinity
Example: Peer-to-peer messaging

22. Telco-style OTT-style
services Adopt a design rather than services
engineering culture in
solving user needs
Design!
Engineer!

23. Pick use cases which are
less sensitive to variable Mobile VoIP
Perceived or poorer performance
value
Mobile
Acceptable
telephony
Application
performance
(speed,
WORST BEST
Unacceptable
accuracy,
CASE CASE responsiveness,
continuity)
Better
Worse
“best case”
“worst case”

24. Other characteristics may be equally or more
important than the network
DEVICE DISTRIBUTION
Screen size Pre-installation
Battery life Apps store promotion
Understand & mitigate all
the bottlenecks to QoE
and value-in-use
REGULATION CONTENT RIGHTS
Legality (e.g. intercept) DRM
Numbering License agreements

25. What next?
Join in…
…everyone’s at it!

26. Comms
Connec Over 100 identified
-tivity Telco-OTT products in the
market.
Content
Cloud

27. Operator strategies & positioning vary widely
Key
partnerships,
customisation, Full details in report from
co-branding Disruptive Analysis
(click for information)
Internet-OTT Tactical
enthusiasm collaboration
Hostility
Skeptical Tactical / Strategic
niche focus
Telco-OTT enthusiasm
Source: Disruptive Analysis Telco-OTT Strategies report

28. Free resources
Dean Bubley
Founder & Director, Disruptive Analysis Ltd
@disruptivedean
Blog: disruptivewireless.blogspot.com
Martin Geddes
Founder, Martin Geddes Consulting Ltd
@martingeddes
Newsletter: www.futureofcomms.com

29. Premium resources
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private
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Telco-OTT
services
Next public workshops: US East Coast, Summer 2012
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30. www.disruptive-analysis.com & www.martingeddes.com
Thank you…