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Monday, August 24, 2015

Deutsche Telekom's disappointing visions for telephony, VoLTE & WebRTC. And it still backs RCS

I've just listened to a webinar by RCRWireless, covering opportunities for VoLTE, RCS, WebRTC & WiFi-calling. The link is here. It's an hour long and worth a listen.

As well as the RCR editor Dan Meyer, it has comments from another analyst (Mike Thelander from Signals), a vendor (Comverse), it also included participation from Deutsche Telekom's head of voice and messaging - who was also the former head of RCS at the GSMA.

There's a lot of angles I could cover in discussing the content of the call, some which I agree with, but also quite a lot that I don't think is right.

The positives:

 - Nobody really seems to believe that ViLTE, aka IR.94 IMS-based video-calling, is a winner in its current form.
- VoLTE has some benefits as a basis of LTE telephony, notably faster call setup time than circuit fallback, and the potential to (eventually) allow operators to refarm spectrum.
- However, VoLTE is still difficult to implement, and even harder to interoperate between telcos because there's different flavours of it. I agree that interop will help
- NFV is helpful in reducing costs of IMS & VoLTE. I'd agree with this - cloud implementations will generally be "least-worst" and can also scale up with demand, which should help limit the downside from "peak telephony" impacting investment ROI
- DT recognising that some communications is "primary" and some is "secondary". Yes, but see below. 

 The so-so's:

- VoWiFi is useful. Yes, it is, but that's hardly news. It's been around in various guises for 10+ years, and simply combining it with VoLTE for better indoor coverage isn't a big deal. The sudden hype around 3GPP WiFi calling deserves a whole extra blog post, as it ties in with the concept of primary / secondary comms discussed below. Extra revenue? No.
- WebRTC will help with service extension and also the creation of new comms services via APIs. Yes absolutely, but those are only some of WebRTC's use-cases for telcos. The main opportunities arise from new areas outside traditional telephony models. Look at Comcast's video-streaming, Telenor's appear.in, Telstra's telemedicine apps or Telefonica's TokBox platform as examples

- VoLTE is a "must". Well, for some operators, especially if they're either really spectrum-constrained, or they lack 2G/3G coverage everywhere they've got LTE, so can't use fallback. But for most, it's still a distress purchase that costs money, without bring any new revenues or real customer benefits to the table. If spectrum, regulations and licence terms allow, operators should either just stick to 900MHz GSM in perpetuity for "plain old telephony", or perhaps take a major leap to either "bring your own voice" models,  or outsource it to a 3rd-party cloud-voice provider, as some fixed/cable players are doing.
- DT mentioned something it's working on called "enhanced voice", with extra features pre/post call and the ability to drop content into a voice interaction mid-app. Apparently they're working with Orange and device vendors like Sony & Samsung. It apparently combines RCS with VoLTE - and there's some hints it might allow some more granularity and hints of context, such as allowing an "urgent" flag to be added pre-call. I'll reserve judgement until I see it (allegedly towards the end of 2015)
- Oblique references / hopes to Apple becoming more supportive of IMS (especially its VoLTE implementation), with what sounds like a relatively forlorn hope that it might put native RCS into iPhones - but probably only if & when RCS gets enough support from users to make it worth the effort. As I've said before, RCS needs to earn its ubiquity - it can't just assume it will become ubiquitous because the telcos say so.

The negatives:

- The continued obsolete framing of "telcos vs. OTTs". This narrative is dead. The only argument advanced for why anyone might switch back from alternative voice or messaging to telco-offered services was that they don't incur data charges. Given that 50-90% of use is on WiFi anyway, that's not very convincing. Very little discussion about functionality, UX, or user design.
- No argument why operators can survive slowly on "primary" communications, given that current evidence show that secondary alternatives are becoming much more important, and WebRTC, contextual comms and various 3rd-party apps are making them ever better. Worse, there was no analysis of what % of current voice or messaging traffic is actually "primary use-cases", and what is left exposed to more-functional (but less-ubiquitous) competing alternatives. My view is that we're probably let with 20-40% of historic voice traffic, and maybe 10% of SMS's, once all the "secondary" uses have been siphoned off. In some cases, secondary comms will be more valuable than primary - it's wrong and misleading to use semantics that imply value and importance.
- No distinction was made between "voice" as a broad media type, and the specific model of "calling" we are familiar with in 130yr old telephony. No reference was made to contextual communications, new interaction modes, hypervoice, ephemeral communications - or even conferencing, for that matter. All the speakers seemed stuck in a voice=call mentality.
- There was hardly any mention of developers, although Comverse talked about APIs and revenue-shares. (It also mentioned sponsored data, more negatively)
- DT was quite negative about WebRTC, advancing a straw-man argument that it's not appropriate for primary communications. Well, it's not a direct replacement for primary telephony on mobile phones yet, I'll agree, but it's certainly fine in enterprise situations like call-centres, numerous innovative mobile apps (especially video-based ones) and more importantly, it's where the innovation & disruption is. DT has been working on various prototypes using WebRTC & discussing them at conferences for ages now - it needs to get them out there, perhaps focusing on business units outside the reach of the conservative IMS dinosaurs. Learn by doing, and perhaps find some new niches in enterprise or TV or elsewhere. Look at NTT, Telenor, Telstra, Telefonica, Comcast & others who are being aggressive rather than taking a narrow, historical view of telcos' role in communications apps
- RCS. Unsurprisingly, the ex-head of RCS at GSMA is still enthusiastic about it at DT. It's still dead, despite the attempts by speakers to assert a "resurgence" of interest. Yes, there's a predictable attempt to bolt it onto the slow & grinding uptick in VoLTE, but no, there's no reason why anyone would ever use it. Pretending otherwise is fooling nobody - a supposed 270% increase in active use from what is almost certainly a pathetically-low base is an irrelevant figure. Unless hard numbers on MAUs/DAUs are issued about genuine RCS use (not just IP-messaging infrastructure as SMSC replacement) then it's safe to assume it's a continued failure.

- As ViLTE/IR.94 is lacking in practicality, the focus of video-calling will be around RCS instead. I'm running out of palms to slap my face on this.... (Hint: call Telenor and licence/rebrand appear.in instead, and save yourself 5 years of pain, millions of euros, and maybe get some upside at the end of it)

Overall, the webinar had some interesting things - but also revealed the lack of ambition and vision among service-provider folk when it comes to exploiting and leading the "future of communications". 

I see where Signals is coming from about spectrum refarming and capacity efficiency for VoLTE vs. so-called "OTT apps", but if makes a false equivalence and assumes they offer the same product/purpose for the end-user. They don't, in general. People pick the best/cheapest tool for the job. Nobody will switch from SnapChat video or Talko voice to a less-featured, less-cool telco alternative based on VoLTE, even if it has QoS and is zero-rated. Having guaranteed "quality" for the wrong service doesn't improve experience. It just gives a fallback option if nothing better is available. Most communications won't look like a "call" at all.

Comverse appears to be being led by the path of least resistance from some customers (some of whom presumably are asking for RCS) rather than making a stand and propounding a bold vision about what's really possible with the future of communications. The talk about "fourth wave" digital services with connected cars & healthcare didn't articulate why those opportunities should fall to IMS-based telcos rather than external innovators designing for the problem, not the platform. Hopefully the Acision acquisition - including the more developer/enterprise-focused Forge WebRTC platform - will nudge them in the right direction, rather than vice versa. More focus on context, or vertical applications unencumbered by legacy telco mindsets, will help.

The DT position was very much about standardised, interoperable incrementalism, trying to eke out 130 years of telephony and 20 years of SMS into mildly-updated forms. While there's definitely going to be a long tail for "vanilla" "primary" voice calls, I expect the revenue to plummet as supply massively exceeds demand. Meanwhile, denigrating new use-cases for communications as "secondary" pretty much guarantees exclusion from the vanguard any new and exciting opportunities. Disappointing, but unsurprising.

EDIT: A comment on the LinkedIn version of this post made me think about how DT's strategy might play out. Hopefully it will be relatively easy for wiser & more visionary units of DT to act autonomously, and ignore the HQ dinosaur herd. Telefonica has managed it, from time to time, with groups like Tuenti and TokBox following their own paths. Similar story for Orange Business Services or the Vallee team that did the original work on Libon. Normally it's the enterprise unit that's most empowered to do its own thing at a telco or some of the web/content guys, but hopefully with DT its various national OpCos & T-Labs can exert more leverage as well.

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