UK Net Neutrality - moving towards the right idea

I've long taken an interest in the machinations & politics around Net Neutrality, especially here in the UK. My view has long been that fixed and mobile operators should be allowed to sell various "managed service" forms of data connection and broadband service, as long as it is made absolutely clear to end-users that this is not "Internet Access", and that it doesn't unduly interfere with Internet Access also provided on the same infrastructure.

My view has been that "Internet Access" means real Internet Access - ie as neutral and non-discriminatory as possible, except in emergency circumstances relating to necessary traffic management to protect overall network integrity.

(I'm not too purist about Net Neutrality, because most of the more slanted and anti-OTT vendor notions about application-based policy either don't work technically, or wouldn't be accepted by users in competitive markets)

I've talked about an "Appelation Controlee" or maybe a protected brand for the term Internet. It's like Champagne - it only comes from one place. Other drinks can't use the name. But it doesn't stop your local bar selling Cava or other sparkling wine as well.

If you're an operator selling Internet Access (TM), it has to be 100% Certified Prime Internet Access. Not "processed Internet-like substitute", or "I can't believe it's not Internet". You can call that something else, but it needs to be clear to customers that's it's fake little-i internet and not the real thing.

All traffic management policies should be made transparently available, and regulators should encourage the use of neutrality-checking tools by users, to make sure that they're not being hoodwinked. It should be a criminal offence equivalent to fraud, to deliberately or covertly manipulate open-Internet Access traffic.

Users should also be protected against non-Internet managed services causing congestion on shared links, to the degree that full-Internet becomes useless. Publishing actual performance targets and attained historic numbers, rather than headline speeds, would be a good way,

It should then be up to a government & population to decide whether offering some form of Internet Access should be a universal service obligation, and based on what criteria (eg average attainable speeds & latencies).

After that, operators should be free to experiment with different models - partnering with software or Internet companies on new products, developing new charging models and so on. Ideally, this would be separated from proper Internet traffic - perhaps even using different frequency bands on cables or airwaves, although that will not be universally feasible.

Two years ago, I wrote up a suggested "Draft Code of Conduct" that gave some guidelines that I felt were a reasonable compromise between a hardcore NetNeut position, and a completely "liberal" telco-centric "we can do what we want with our pipes" viewpoint.

I then polished this up into a submission for UK Regulator Ofcom's 2011 consultation on the topic, which is downloadable from here. (The submission has slightly less opinionated views on what I thought "should" happen than my Draft Code)

Then last March, a group of ISPs issued their own first attempt at a Code of Conduct. My discussion of it is here. I felt that it was an OK start, but tried to treat traffic types (video, text etc) as applications, which is wrong - video is 1000 different applications, often embedded into other applications. Trying to separate out an arbitrary traffic type for different treatment is like charging more for a magazine depending on the amount of green ink.

The next step in the saga was Ofcom's publication of its stance on neutrality in November last year. This very clearly laid out the distinction between Internet Access and managed services:


"In particular, if ISPs offer a service to consumers which they describe as ‘internet access’, we believe this creates an expectation that this service will be unrestricted, enabling the consumer to access any service lawfully available on the internet. As a result, if a service does not provide full access to the internet, we would not expect it to be marketed as internet access."

This fits very closely with the view I've been propounding. It doesn't stop operators offering different sorts of connectivity - for example, prioritised IPTV or VoIP. It does however mean that any partner-type models involving end-to-end prioritisation (ie on the access network, not just middle-mile shortcuts like CDNs) would not fit within normal Internet access models, but would have to be marketed separately. This is another nail in the coffin of unworkable concepts like 1-800 Apps for the UK.

This was then followed up with the European Regulators' group BEREC announcing its preliminary findings on traffic management earlier this year (Spoiler: lots of places block VoIP) and it is now doing a full consultation up until October. It too has noted the difference between real-Internet and fake-Internet services, and is considering options for allowing prioritisation, blocking etc.

The Dutch, meantime, have introduced "hard" Net-Neut legislation, following KPN's rather careless remarks about blocking or charging extra for WhatsApp or Skype. Other operators have suggested some form of Internet tax to protect their legacy revenue streams from others who've actually innovated over the last 100 years since the invention of the phone call. (This is the usual weak argument of "we're dumb, so can you please tax the clever people for us").

Now, a new version of the UK ISPs' code has been issued - the full document is here . This is the pivotal line, in my view:

"Signatories also recognise the importance of best efforts internet access being a viable choice for consumers alongside any managed services that might be developed and offered."

As well as:

"in instances where a product does not support full internet access, i.e. where certain classes of content, applications and/or services are blocked, the term “internet access” will not be used to describe or market such products. ISPs also commit to effectively communicating any restrictions on such products."

(There's a bit of semantic wiggle-room here, with "blocked" not necessarily including "degraded", but I suspect Ofcom will come down like a ton of bricks on anyone following the letter and not the spirit of the thing, not to mention considerable PR and competitor opprobium)

The stated ability to do traffic management to avoid serious congestion, block child-unsuitable material, avoid DDoS attacks etc also seems reasonable.

Supposedly, about 10 ISPs have signed up, but reportedly Vodafone hasn't because it thinks it's too restrictive about the term "Internet Access", and Virgin Media thinks its too laxly-worded and wants loopholes tightened up.

In my view, Vodafone: you need to grit your teeth and sign. Internet is Internet is Internet. If you want to sell something else, I'm sure your marketing  department is smart enough to come up with another brand. I can even give you some advisory input if you get in touch. (How about "Internet-flavoured access"?)

Otherwise overall, I think the UK ISP community is now world-leading at developing a suitable compromise between Net Neutrality, leaving scope for alternative telecom products and new business models.

I'm pleased that I may have helped, in a small way, to clarify some of the arguments and debates with my various posts and official consultation submissions.

What's your "ecosystem mix"?

One of the most interesting big-picture trends in telecoms at the moment is what my colleagues at Telco 2.0 / STL Partners refer to as "The Great Game" (A historical reference to the Russian and British Empires' strategic struggles over control of Central Asia in the 19th Century).

Which of the various "ecosystems" will win the hearts, minds and wallets of consumers? Telcos, Apple, Google, Microsoft, Facebook, Amazon and so forth are in the frame here. The empires concerned span access, devices, voice services, messaging, social networks, advertising, content, apps, payment mechanisms, customer data, authentication and more.

The more components in each ecosystem, the greater the potential for lock-in. Apple is hoping that iPhone owners will buy iPads and Macs - and use iCloud and other services. Android users are steered towards Gmail, Google Apps and perhaps even Chrome on the desktop. Mobile operators are hoping to maintain their role in voice telephony, and add social functions, content and payments. Facebook's reach is extending across the web and betond - most recently, even to owning sub-oceanic fibre.

Some people have already made their initial decisions - there are Apple fan-boys, Google enthusiasts, quad-play telecom subscribers and so forth. Others are adamant about which companies they want to avoid - for example, there are many Facebook refuseniks, as well as people whose only telco interface point is via a SIM and anonymous prepay top-ups.

Myself, I fall into the camp of "a plague of all your houses". I deliberately structure my use of technology and services to avoid becoming beholden to any one of these organisations. I don't want to be bombarded with adverts, I don't want to be locked-in to any platforms, and I certainly don't want complete profiles of my life being deduced by any analytics systems. Paranoia or just sensible precaution - who knows? I also don't want to become a digital recluse, so my answer is to use a "bit of everything".

In particular, I try to keep work & personal stuff separated, except through touchpoints such as Google Search or my home broadband. (Hmm.... maybe I should delete personal friends from LinkedIn to keep it "pure" and business-focused).

My basic premise is that I don't want any one provider to see or control more than 20-30% of my communications & Internet existence. This is one reason why I wouldn't have an Android phone, and if I'm using an iPhone why I wouldn't also want a Mac - and why Apple doesn't have my credit card details in  iTunes. Google for me is about search, maps, this blog and an Adwords account. I sign out when I can, and wouldn't touch G+ if you paid me (and the only reason I use G Docs is for communicating with clients who do pay me).

It's also why Disruptive Analysis doesn't "do" Facebook, why Twitter is strictly work-only, why I wouldn't use a mobile phone account to buy stuff, or ever sign up triple/quadplay services. It explains why I had to create a new random Microsoft Live account to test a Nokia Lumia. It's also why my main personal email is still a (paid!) Yahoo premium one. I get music from Spotify, VoIP from Skype, books from Amazon and happily use Paypal and credit cards for most online transactions.

Frankly, the best thing about the Internet is choice and divergence not convergence into monolithic ecosystems.

What about you? Have you sold your electronic souls to any one of the communications devils? Or are you determined to withhold "loyalty" until it's is actually earned? And am I lulling myself into a false sense of security?

New Report: 10 Reasons Why the "toll-free" 1-800 Apps Concept Won't Work

I've published a 35-page report on one of the mobile industry's lastest overhyped ideas: the concept of a "1-800" model for apps, where the user doesn't pay for data against their quota or cap, but the app or content publisher picks up the tab instead.

The idea has been floated by various operators - notably AT&T and Verizon Wireless - and supported by assorted network and policy-management/charging vendors.

Although superficially compelling, there are numerous practical flaws with the idea, ranging from difficulties with pricing of such "sender-pays" data charges, through to unexpected side-effects as users and developers try to "game" the system. Add in uncertain IT systems, the rapidly changing nature of apps themselves and assorted other "gotchas" and the idea starts looking unworkable.

The report elucidates 10 separate reasons why the general model for toll-free apps can't work, as well as identifying a handful of niche use-cases where it might be OK.

One of the main problems is defining exactly what an app actually is - I've mentioned the famous YouTube-video-inside-Facebook example for a couple of years, but it's now getting much more complicated than that. HTML5 means that "apps" can be created on-the-fly, individualised for different people. How does a 1-800 model work when your Facebook app and mine are different?

Then there's things like WiFi. If I'm an app developer, why should I pay for someone's mobile data traffic when I can just suggest they connect via WiFi instead? Maybe for the small amount of "absolutely need-it-now" data there's more of a case, but that makes it much more difficult to separate out the time-critical vs. delayable parts of the app. Unless the price is so cheap that the developer doesn't care - in which case the operator probably won't be making much money either.

Then there's the IT and back-office side of all of this. How does an app developer sign up, track their data costs, manage fraud and abuse - or complain if it goes wrong and they're mischarged by the operator? And if you try and implement a version of the tollfree data model where the traffic isn't just charged differently, but prioritised or given extra QoS it gets 10x harder still.

My view is that it's a nice idea for press releases and conference soundbites, but when you look at the detail it just won't work, especially in the general case where any app-developer or content provider can use the platform. The 1-800 phone industry - where anybody from a florist's shop to an international airline can offer free calls - simply cannot be replicated for mobile data and apps. There are far too many gotchas, many of which I'm not mentioning in this blog post.

Let's just work out a way to gracefully back away from the idea, look at a couple of niche and highly-customised special cases, and move on. "Sender-pays" for mobile data simply will not work for massmarket apps and content.

The report's contents (total length 35 pages):

Introduction       

Several different models of “toll-free”   

1. No clear definition of “an app”          

2. Business Model Fit   

3. Apps’ data usage is device-dependent

4. Apps have multiple functions      

5. HTML5 changes the game again  

6. Poor fit with WiFi and femtocell offload  

7. OSS/BSS challenges & “dashboards

8. How would operators price toll-free? 

9. Network dependencies & standards   

10. Arbitrage & other unintended consequences

Can two-sided business models ever work

Exceptions where Toll-free might work

Conclusion     

About Disruptive Analysis

I'll put up a more full blog post and description in coming days, but for "early adopters" willing to pay upfront, I'm offering a $100 discount for a short introductory period.

The report is available as a PDF only, delivered via email within 24 hours of payment via the Paypal / Credit Card link below. The discounted price is US$595 for a 1-3 user licence, and $895 for a corporate licence. (If you're in the UK or EU, you'll need to select the option with 20% VAT added).

If you prefer to order and pay via PO/bank transfer, please email via information AT disruptive-analysis DOT com . Also please note that I have been experiencing occasional problems with the Paypal BuyNow links below - please let me know if you have trouble.
  
If paying via a personal email account, please also send me your work email address or a contact phone number.

Disruptive Analysis 1-800 Toll-Free Apps report:
1-3 User Licence

Toll-free apps report (PDF) 1-3 users

Non-UK/EU $595.00 USD UK/EU (+20% VAT) $714.00 USD

Corporate Licence

Toll-free apps report (PDF) Corporate

Non-UK/EU $895.00 USD UK/EU (+20% VAT) $1,074.00 USD

Reverse-engineering Ericsson's mobile data numbers

Ericsson has just published its new report on mobile subscriptions, traffic and so forth. I tend to view its methodology (certainly for past data) as pretty solid as it's got footprint in operators all over the world and so obviously has a lot of real data to aggregate.

I'm going to the press/analyst event in London this morning [June 6th], but I'd thought I'd do a quick skim & also a number-crunch. As is typical with these sorts of reports, there's not much of the granular detail we'd all like to see (broken out by region / device / user etc), as they keep that for internal use, but with some cunning use of spreadsheets you can distill a bit more from the charts.

Bear in mind that this is all very quick analysis, so it's possible there's an error or two creeping in. I'll try and correct anything I see or get told about, and also when I get a chance, do a comparison vs. Cisco VNI and some operators' own reported stats.

Some interesting highlights:

- Traffic growth forecast 15x between 2011-2017. Note that is a 6-year period rather than a 5-year one we sometimes see. Ericsson estimating CAGR as c60% [15x actually equates to CAGR of 57%]
- Traffic growth between Q1 2011- Q1-2012 was "almost double". Reading off the chart & recompiling the numbers in my spreadsheet, I reckon 99%
- Traffic growth Q-on-Q was 19% from Q4 2011-Q1 2012
- Some of its numbers include voice as well as data but "By 2017, voice traffic volumes will be
very small compared to data traffic volumes in all regions." so I'll just work on the totals for now.
- "Asia Pacific is expected to increase its share of global volume from around one third today to almost 50 percent in 2017" . They've included pie-charts but not the numbers, but recreating them (assuming Ericsson's graphics guys have got the real numbers) gives AP going from 37% to 46%
- Ericsson refers to "high traffic smartphones" - I reckon it's a politically-correct way of excluding all the Symbian featurephones still knocking around the world without any/decent data plans and usage.
- The report reckons that PC data traffic still dominates in most networks today, but it will move to roughly equal PCs (& & tablets) vs. smartphones in 2017.
- Current average usage is 2GB/mo for a PC/tablet or 500MB for a high-traffic smartphones. It estimates that will go to 8GB and 2GB respectively for 2017. Personally I reckon that's a bit unrealistic, especially given a lot of new smartphones in areas with low ARPU & thin networks, plus the impact of parsimonious dataplans and WiFi. I'll query their assumptions at the event tomorrow.
- It is excluding M2M, but I suspect that'll fade into the noise as most usage is tiny & likely to stay so, except for a few niche devices like realtime telemetry which will still be uncommon (in absolute numerical terms) by 2017
- It appears to exclude WiFi from the calculations & have data as mobile (cellular) only
- Generally impressed with Ericsson's appropriate use of significant figures rather than forecasting 15433.2PB/mo or something similarly ridiculous I've seen elsewhere.

Now, putting its various numbers into a spreadsheet yields some other (estimated) figures of my own calculation

- If I assume that growth in traffic for 2011-2012 falls to 80% from 99% the previous year, and taking their 15x growth from 2011-2017, brings down the global 5-year CAGR figure from 2012-2017 to 53%
- This compares with Cisco's 2011-2016 Mobile VNI forecasts [5 year] of 18x traffic growth
- In general, Cisco's forecasts are considerably more aggressive than Ericssons. The difference (hat-tip to Tim Farrar here) is mostly in the assumptions on average smartphone data use towards the end of the period
-  Then, reconstructing the regional breakdowns from the piecharts & reformulating the CAGRs, I reckon we have my best estimates as:

Western Europe Mobile Data Traffic CAGR 2012-2017 = 45%
North America Mobile Data Traffic CAGR 2012-2017 = 42%
Other global regions are 56-62% CAGR

While not quite in the realm of fixed broadband data growth, both are (comparatively) manageable, especially with the addition of small cells to the mix. So... do we really need LTE that desperately in developed markets, except in hotspots or for marketing purposes?

Again - note that this has all been done on ultra-rapid spreadsheets, reading numbers off charts etc. Caveat lector.

Updates on VoLTE - secondary not primary voice?

Unlike my criticisms of RCS (which I think was a lousy idea to begin with), I've always been broadly positive about the concept of VoLTE and its predecessor OneVoice. Indeed, I wrote a report in 2007 saying that operators urgently needed to develop a standardised form of basic VoIP telephony for 3G/4G networks.

However, that was 2007. The year the iPhone launched. VoLTE development is now running 4-5 years late, and the mobile world has moved quickly in that period.

A central theme of the report was that operators needed to "practice" with VoIP with HSPA networks in 2008-9, before being forced into using it with LTE. I argued that deploying a new voice technology, on a new network, with all the inter-dependencies and complexities involved, would be too difficult. Understanding the vagaries of mobile VoIP quality needed to be done without the distractions of simultaneously learning how to optimise the radio network itself. 

VoIP quality is a completely different ballgame to circuit voice - even on a well-managed ethernet corporate LAN, let alone a brand new wireless network. It fails in different ways (glitches and so on), has lots of on-device requirements in terms of UI and acoustics, and various challenges with interconnect, service assurance and maintenance. It also needs a way to hand off calls to/from 2G and 3G networks reliably.

One of my suggestions was that operators could use VoIPo3G for assorted less-demanding "secondary" forms of voice service, while leaving "primary telephony" on circuit-switched networks until they'd learned the tricks of the VoIP trade.

It looks like I was right. Verizon Wireless has long been at the vanguard of VoLTE development and testing. In February 2011 it indicated a mid-2011 for VoLTE. Subsequently - and to my complete lack of surprise - it has been pushing back the date. I've heard from various private sources that my assertion that VoLTE would be "harder than it looks" is  right. 

The VZW CTO has now been quoted as saying that the company is "not rushing it", and that full (primary telephony) VoLTE is probably going to be late-2013 / early 2014. Interestingly, in the meantime it looks like they might instead go for the "secondary voice" option, bundling some form of VoIP (and I guess maybe video) into a new communications client along with US-flavoured RCS.

If that happens as planned, it's a very interesting move, because:

1. It's a proper admission that mobile VoIP is *hard* to get right. That's good because it means the scale of the problem has now sunk in.
2. It means operators will have a stake in the "secondary voice" game, perhaps meaning that they now realise voice is about "more than telephony". It will be interesting to see if the new voice apps come with developer APIs, different user "journeys" such as call-invitation rather than interruption and so forth
3. It means that operators will be prepared to admit to users that having 2+ voice apps on one device can work, and that "ubiquity" isn't necessary. Most users know this already if they've got Siri or Skype or Viber, but it's quite something to see confirmation from the Establishment.
4. There seems to be recognition that the world is not standing still waiting for VoLTE to be ready for prime-time. Every month's delay is a month that Skype and its dozens of rivals get better at running 3rd-party voice apps over 3G/4G networks - and a month in which users get habituated to them. Therefore operators either need to do "something" with beta-grade VoLTE, or go down an alternative OTT-style route.
5. It looks like the operators - in the US at least - will try to stick to a "federated" model for mobile VoIP rather than doing a #TelcoOTT . Although maybe some will follow Telefonica's lead and back both horses.

The last two points are worth revisiting. The idea of "hedging" is one that seems to be taking hold in telecom operators. I had senior representatives of both  Deutsche Telekom and FT/Orange on my panel "Operators vs. OTT" session at the Open Mobile conference the other day. Both suggested that it "wasn't a black and white situation" and that there was scope for various forms of grey in partnerships, Telco-OTT services and so on. I'd goaded them a bit with Telefonica's recent bold moves with TU Me and other services, and the response surprised and impressed me. They're prepared to try multiple options for voice and messaging, probably targetted at different customer segments.

My question is whether operators have the management and governance (and resources) to back multiple horses - and also whether they can still say "It's just there, it will be ubiquitous" while simultaneously planning another option if it isn't. I'm not sure if anyone has ever devised a version of the Prisoner's Dilemma in which the inmate tells different stories to two different prison guards, but that's what this sounds like. If any game-theorists would like to comment, I'd be very interested.

There are also some interesting challenges if we have VoLTE for secondary voice - such as how it interacts with the primary voice user experience. Which takes priority for incoming calls? Do both feed into the same call register? Do you have a number (and if so is it the same?). Does it work over WiFi? It'll be very interesting to see how that UI is managed, especially if there are also 3rd or 4th voice apps on the device from someone else.

I also had  another Open Mobile session on 4G, with  an EVP from Tele2 and the CEO of Everything Everywhere, while the head of mobility at Teliasonera had a keynote. None of them sounded particularly excited by the imminent arrival of VoLTE either, expecting it vaguely "next year". A common theme seemed to be that circuit-switched fallback "should" be good enough, although there's a conspicuous lack of data about uptake or user-satisfaction for CSFB.

Fitting all this together with a comment I'd seen in a GSMA presentation a few months ago - that VoLTE would be "massmarket" in 2014 - and an interesting picture emerges. We're about to have at least two years where mobile operators are going to be forced to do interesting things with voice, because primary-telephony VoIP isn't ready yet.

The one operator that leaves in the cold is probably MetroPCS, which seems to have been banking on VoLTE being mature this year, and which is probably in greatest need for it as it has capacity headaches for circuit. It will also be interesting to watch what the Asian LTE operators do - my guess is stick with CSFB or perhaps revisit the dual-radio idea already seen on CDMA/LTE phones.

Lastly, I've seen a couple of things about VoIP on HSPA (notably from Qualcomm), but that seems to be positioned as a follow-on to VoLTE, allowing use of full mobile VoIP in areas with no 4G coverage, without the extra horribleness of SR-VCC handovers to circuit.

The telecoms industry and a dual-dilemma problem

I had an interesting late-night Twitter spat with Keith McMahon last night, about the appropriate future model for telecoms operator strategy. He disagrees with my stance on Telco-OTT (operators launching their own pan-Internet services) and reckons that it will accelerate "value destruction". I'm adamant it's inevitable even if it does imply cannibalisation and revenue decline taken at a macro industry level.

Thinking about this more today, I've realised that my view can be explained quite simply. The telecom industry is (as far as I can tell) the first to face two classical "dilemmas" simultaneously:

• The Innovator's Dilemma: The title of Clayton Christensen's seminal book on disruptive innovation (from which I take a great deal of inspiration, including my company name). It refers to well-managed, profitable companies watching disaster unfold, as they ignore a low-cost / low-profit new technology because it targets only adjacent markets, and would threaten cannibalisation if applied to their own. But it improves over time, gaining strength and scale, and eventually kills them anyway, as it expands from adjacencies to core.
• The Prisoner's Dilemma: This is a famous thought-experiment applying "game theory" to collaboration and cooperation. Do two prisoners remain silent & complicit - both receiving short sentences - or does one frame the other, going free while the other languishes in jail? Or, if both try to betray each other, they both get long sentences. (Edit: Martin Geddes has pointed out the different game if you change the apostophe to prisoners' dilemma)

The parallels in telecoms should be obvious. IP communications, new styles of voice & messaging, and smartphones are the disruptive innovations, while following the rigid federated/interoperable model of telecoms (or "defecting" to #TelcoOTT) is the equivalent of cooperation vs. self-interest.

However, there are differences here which make the situation even more painful for the telecoms industry.

On the disruptive innovation front, the telcos' response has been made even more lethargic by the distraction of slow-moving, expensive and inappropriate solutions like IMS. And rather than just having scrappy startups driving the disruption, we have the force of behemoths like Google, Facebook, Apple and Skype. Add in the fact that ordinary telephony and SMS seems to be "going out of fashion" and that LTE represents a "market transition" forcing a change from the incumbents at precisely the wrong time, and you see the problem. I don't disagree with Keith's view that telco bundling is important - but it implicitly requires having valuable things to bundle.

And the prisoner's dilemma is skewed by the addition of time as a critical factor. First-mover advantage for the "traitors" might be sustainable, albeit at the likely cost of the unfortunates who stay quiet - or who procrastinate for too long. This is why the argument I've heard in the last few days, that Telefonica's TU Me launch might spawn another 50 Telco-OTT Me-TU's is fallacious. Most of those will be TU Late. (ahem, sorry...)

The collaboration option is also subject to regulatory intervention, as well as even more delay - witness the push-back of VoLTE launch by Verizon to late 2013, and the ongoing farce of RCSe's supposed arrival. It's certainly not "just there" and as I wrote last week, it's doubtful that it will ever "just work" in a way that users actually want.

Extensions of these dilemmas apply in other telecom areas too - content and TV, commerce and payments, identity, cloud services and so forth. The details differ somewhat, but the story is the same.

Keith suggested that the #TelcoOTT approach was likely to lead to "value destruction" and "Dante's Inferno". I see his point, although I'd choose another example from more recent popular culture. If you're going to risk everything, then Fight Club's Tyler Durden isn't a bad role model "I say never be complete, I say stop being perfect, I say let... lets evolve, let the chips fall where they may." (And yes, I do remember the movie's ending. And there are plenty of other quotes I like, that are unprintable on this blog, but help yourself).

I'm not anti-telco. But I am realistic that solving those two dilemmas, simultaneously, needs some pretty radical moves. The industry en masse hasn't taken those moves. It's largely paralysed, shackled to the walls of its cell, by the manacles of legacy and interoperability. And now individual members can hear the executioner approaching, and some of them want freedom, rather than going to the gallows together.

Yes, Telefonica's TU Me - or its OTT mobile wallet solution or WiFi "onload" service - might not succeed. But they're all better than sitting and moaning about one's dilemmas in a support group, while the world collapses around you.

If you haven't yet bought the Telco-OTT report - details are here . Or inquire about a private workshop / advisory engagement.

Phone number as OTT identifier - a problem in the making?

I got an SMS this morning from a business contact - actually a client from an operator who came to the Telco-OTT workshop a couple of weeks ago. It was an invitation to download TU Me, the new Telefonica VoIP and messaging app, sent from within the app itself.

But as it happens, I've already got the app on my phone. But what I don't have on my phone is this person's phone number. So I can't connect to them. And so TU Me didn't realise we already knew each other.

This got me thinking. A lot of the more successful recent OTT apps (whether Telco-OTT or Internet-OTT) have used the contact list and people's phone numbers as easy ways to make connections. Viber and WhatsApp both do this. There's been a bit of a privacy outcry about such apps uploading your contacts to the cloud, but newer ones like TU Me seem to have smoothed peoples' fears and claim that they only use the data to find other contacts.

In many ways, this is a good thing. It helps automate the process of "virality", by seeing which other app users have your phone number, and vice-versa, in their phone books. Using the number gets around random spellings and nicknames - if you have 07111 222333 down as "Johnny Boy" it doesn't matter, as long as Jonathon / John / Jack / Jon has your number in his phonebook too. It also avoids the complexity of issuing and managing a separate ID and login (eg I'm @disruptivedean on Twitter, although I use my real name on LinkedIn and Quora).

But phonebook-driven virality only gets you so far. Traditionally, I would have had all my contacts replicated in my handset, including the client I mentioned at the start. But I don't. I only have people that I actually want to phone or SMS on a regular basis. I don't "add contact" in my Outlook and sync everyone to my phone. I don't use vCard. I only have about 50% of my Facebook friends, maybe 10% of my LinkedIn contacts and 1% of my Twitter followers' phone numbers on my phone.

I don't want 1000+ people in my handset phonebook. In my head, the phonebook is for certain use-cases - eg chats with friends and family, arranging meetings with regular clients and business contacts (often via SMS), some businesses I need to call frequently (accountants, bank etc) and a bunch of "legacy" numbers I ought to delete. I don't want to scroll past dozens of acquaintances that I'll never actually contact "by phone". I also want to reduce the risk of embarrassing mistakes, like accidentally mis-keying and sending personal texts to work contacts.

I've got plenty of good business and personal contacts I have no intention of saving in my phonebook, because I know I'll likely never phone them. In particular, I don't bother with most international numbers as usually I'll only call at specific times - and then I'll use Skype from my PC (or occasionally my handset). Or if I do suddenly need to call for some reason, I'll probably use Outlook to find an old email from them, and just dial the number in the footer. And then not save the number afterwards.

Now some people are probably different. They'll use various forms of syncing, and have a single contact list. Good for them, but not for me. I guess my client has my number in my phone for this reason - or perhaps he put it in his contact-list pre-emptively in case he got lost or delayed on the way to the Telco-OTT workshop. I prefer maintaining multiple independent lists - especially keeping work & personal contacts about 80% separate. I also use different names / pseudonyms, and avoid things like Android because I don't want everything converged.

Which brings me back to OTT apps like TUMe and WhatsApp and Viber. There may well be instances where I do want to connect with people like my client on these tools. They might evolve to have certain use-cases that go beyond my normal use of telephony and SMS, for example being good for occasional contacts, IM chats or image-sharing.

But if I'm forced to use a phone number as an identifier - and enter it in my main "master" phonebook" - then I simply won't do that.

I think that using the number is a neat way to get early "virality" - Viber proves this. But it runs into a ceiling after a while. Not only that, but many PC/tablet-based users don't want to associate a phone number with a given messaging or social account. No matter how many times Facebook and Google try to take my mobile number "for backup purposes", I tell them to get lost.

This is true for things like RCSe as well - I remember a Middle Eastern operator ask a question at a conference a few months ago, wondering if it was possible to have a separate ID (eg an email address or a BBM-style PIN) for the account, as users in his region are wary of sharing phone numbers but may still want to IM. There's a ton of social, cultural and psychological factors at play here around phone numbers.

I think there's a reason that the most successful OTT services such as Facebook, Skype, BBM, Twitter and others have managed to scale so well - unique IDs. They have also been able to use third-party directories - phone contact lists, Gmail and Yahoo and AOL accounts etc - to help find contacts, and selectively invite people to become friends/contacts on the new system.

As our use of telephony and SMS diminishes, one of the side-effects will be a parallel fall in the value and usefulness of the phone number. Add in multiple numbers, churn, portability, "temporary numbers" and other factors and it gets worse still. OTT players (Internet or Telco) who use the directory & E164 identifiers will get a short-term quick win, but face an uncertain future if they depend on a source of identity that is sliding gradually into irrelevance.

Telefonica TU Me - first salvo in full-scale interoperator Telco-OTT warfare

Regular readers of this blog will know that I am a big believer in operators developing their own OTT-style services. I published the first full analyst report on the Telco-OTT concept it a few months back, and conducted the first public workshop (summary deck here) about two weeks ago.

Telco-OTT offerings are not new - I've found over 100 examples, split between four broad categories of Communications, Content, Connectivity and Cloud. Some have been around for a decade or more, and I am adding more on a weekly basis. I've also been engaged in numerous private consulting projects and workshops, some for major international operators looking for a disruptive play.

One thing that has been absent so far has been any large-scale "operator-on-operator" battles for VoIP and messaging. No operator has really gone out to create a complete Skype / Viber / WhatsApp / Facebook from scratch, especially rolled out globally to the entire 2-billion strong Internet user base. There have been some regional plays for Telco-OTT VoIP in Asia, and innovative fixed-onto-mobile or niche/OTT-extension plays such as Rogers One Number and "roaming VoIP" plays from operators like Mobily and Cellcom. T-Mobile US's Bobsled is a customised version of Vivox's VoIP platform, but hasn't really got the same sort of scope and scale.

This has all changed with today's formal launch of Telefonica Digital's TU Me application, which is a sort-of combined Viber+WhatsApp with a unique "timeline" format for communications, which is stored in the cloud. It works over WiFi and 3G/4G data, but is currently only available on iPhone.

Various things make it unique. First off, it's an Internet-centric app with plain-English terms of service, no support for emergency calling, no (at the moment) TUMeOut or TUMeIn interoperability with the PSTN, and no interworking with SMS. It's not intended for "primary telephony replacement". It's also - uniquely for a telco proposition - unashamedly a beta "work in progress" app. It crashes, it's only available in English, the ToS basically says "If it doesn't work, sorry". Caveat emptor. (Caveat utilor? It's free at present).

Yes, there are various other VoIP/IM apps out in the wild that do broadly similar things. But apart from Skype and Google Voice, they're not run by companies with 300m+ existing users to whom they can evangelise and bundle. Telefonica also ought to have some cost advantages, as it's got its own cloud platforms and back-office capabilities.

Also, and what is surely causing some bulging eyes today, it's come out in advance of Telefonica's RCSe / Joyn launch. It wouldn't surprise me if there's a (politically-calculated) plan to interwork with RCSe at some point, but that's just paying lip-service to the old and out-moded federated approach to telecoms.

The other interesting thing is the apparent business model. It looks to me as if Telefonica has adopted cloud-based models for a communications-based service. It looks as though it may charge for hosting the "timeline" beyond a free first year, and I bet it does a bunch of other cloud-based clever functions around the voice and messaging content - perhaps recording, analytics, translation, seach and so on. This fits with my view (and the trend accelerated by WebRTC) that the actual business of shipping bits of speech or text around is moving down to become a mere function, not a service. Monetisable services will be what happens around voice or messaging.

I'm expecting to see various other operators enter the Telco-OTT space, either with other "big" plays like this - hopefully differentiated - or with niche offerings targetting travellers, voicemail, particular groups etc.

But for now, I've got to applaud Telefonica for putting TU Me out there - it validates a lot of what I've been saying about Telco-OTT, and makes me feel less like a lone rebel shouting into the wind.

Summary slides on Telco-OTT rationale

Last week, Martin Geddes & I ran our first public workshop on Telco-OTT services, and why both fixed and mobile operators should be developing their own Internet-based services. This was a full-day event, with a varied attendance from operators, vendors, Internet companies, regulators and others. Rather than just being presentations from myself and Martin, we ran the event to get a good amount of discussion, interaction and networking among the participants.

We covered general trends in the telecoms industry that make it inevitable that the historic "federation" model of telecoms services is going to break down - and sources of value that remain open to operators as that happens. We examined some of the underlying and unspoken assumptions that the telecoms industry often makes. Importantly, we also looked at some of the practicalities and organisational challenges involved in telcos developing innovative products and services, some of which may cannibalise existing busineses.

Our view is that "managed and minimal self-cannibalisation" is far better than simply burying heads in sand and waiting for the Internet juggernaut to do it instead, in a much more catastrophic fashion. It's also much better than trying to compete with Internet-OTT services with poorly thought-out legacy solutions like RCSe.

Our view is that the industry spends too much time thinking about "Telcos vs. OTT" and too little time considering "Telcos exploiting OTT".

The event drilled into the four main areas of Telco-OTT services: Communications, Cloud, Content & Connectivity. These are all covered in much greater detail in my recent report on Telco-OTT Strategies and Case Studies.

If you want to get a quick backgrounder on the "story", we've uploaded a summary slide-deck. You can view it here.

Have a look through it, feel free to comment here on this blog, and if you'd like to take it further, please get in touch (information AT disruptive-analysis DOT com) or buy the full report.

We'll soon be announcing future public workshops, as well as conducting private internal sessions for specific clients (under NDA where appropriate). I've also been doing various in-depth consulting engagements in this area with vendors and operators, and would be happy to discuss your specific requirements.

Upcoming Events: Open Mobile Summit, NGMN, Small Cells & more

Future of Voice & Telco-OTT

Firstly, a big round of thanks to everyone who came to last week's London Future of Voice and inaugural Telco-OTT workshops. Martin & I were very pleased with the levels of insight & interaction, and the general atmosphere of learning and collaboration among supposed rivals. I've come out of the events with a range of extra thoughts and ideas, and will be feeding those back into our ever-evolving story.

On that topic, we're still finalising dates for our next public FoV / OTT workshops in the US (and after that, back in UK/Europe and maybe Asia later in the year), as well as talking to various companies about running internal private or custom workshops for staff/partners/customers. We're also thinking about shorter varieties for breakfast roundtables, press lunches etc.

If you're interested in hosting or sponsoring an event on Future of Voice, Telco-OTT or related areas, please drop me a line via information AT disruptive-analysis DOT com . More detail is also available on the main Future of Comms website.

In addition to my own smaller workshop-style events, I'm also going to be speaking at or chairing various other major conferences over the next couple of months.


Open Mobile Summit

In particular, I'll be at the Open Mobile Summit in London (link here) on May 29-30 . I’ll be moderating a panel on the possible operator responses to so-called OTT providers, including whether operators should launch their own OTT services (ie my Telco-OTT hypothesis). Dr. Rainer Deutschmann, SVP Core Telco, Deutsche Telekom and Daniel Gurrola, VP, Orange, are just 2 of the heavyweight operators participating in this session’s line-up. It wouldn't surprise me if my favourite topic of RCS crops up as well, so anticipate some fireworks and the odd awkward question....

I'm quite a fan of the OMS events, having spoken at four previous conferences. There's usually a good mix of senior people from across the value chain - generally focused more on services (next gen voice, cloud, advertising, payments and commerce etc), rather than infrastructure. Unlike some events I've been to, I also don't get the sense that vendor sponsors set the agenda unduly or get a free-ride.

Use discount code DISRUPTIVE or click here for special delegate rates.


NGMN Conference

I'm not going to be going to the LTE World Summit this year. In general, I'm moving away from attending the larger events and trade shows, unless they are both profitable for me and enjoyable. I'm not at CTIA next week either, and I probably won't be at MWC in Barcelona next year, since as it's moving from the Fira to some new faceless barn way out by the airport.

Instead, I'm going to be at the NGMN Industry Conference in San Francisco from June 13-15. (Link here) which looks to be stuffed with CTOs and senior strategists. Hopefully that means there should be a focus on what's actually realistic with 4G technology, rather than marketing fluff and hype. I'm moderating a panel session on devices including NTT DoCoMo, Bell Mobility, Samsung and Qualcomm representatives. I'll actually be wearing my "second hat" as an associate of STL Partners / Telco 2.0 , and primarily representing their work & world-view, where it is congruent with my own.

(That means that I won't be at the STL/Telco 2.0 London event that's running at the same time, which I'd also heartily recommend for a less-tech heavy view on telco & media business models and service opportunities)


Small Cell World Summit

My other main gig before the summer is back in London, at the end of June, at the Small Cell Summit (formerly the Femto Summit). Link is here. I'll be moderating a panel session discussing the practicalities of rolling out small cells on a large scale, and also probably chairing one of the other sessions. Should be interesting to see what's going on in the world of small cells & femtos - in my mind a really important part of increasing network capacity, rather than trying to over-engineer the core and policy parts of the infrastructure.

(Special plug here for the organisers, who've clearly got their priorities right, as they've arranged it at a venue which is walking distance from my house.)


Other events & speaker requests

Later in the year, I'll be doing an executive training course on key disruptive trends in telecoms in Singapore (Sep 20th) - more details in a later post. I'll also probably be at one or more of the Telco 2.0 events in the Middle East or Asia-Pacific in Oct/Nov.

If you're interested in getting me along as a speaker, moderator or chair for another event, please drop me an email at information AT disruptive-analysis DOT com

My main topics are:

- Future of Voice (and messaging) services
- Telcos + OTT / Telcos vs. OTT / Telco-OTT strategies
- Mobile Data Policy/Traffic Management & Optimisation
- Wi-Fi (offload, devices, carriers, user experience etc)
- Operator Business Models
- Mobile Broadband Networks (3G / 4G)
- Mobile devices & ecosystems

Some of my current thinking about RCSe / Joyn

I realise that haven't commented on this blog about RCS in a while, although I've had numerous exchanges on Twitter over the past couple of months since the Joyn announcement. I've also had a chance to talk to various operators and vendors, both through general briefings and under-NDA private consulting engagements.

  

So this is a bit of an update on recent thoughts & conversations I've been having. The timing seems appropriate, given that next week there is both a legacy-view IMS conference in Spain, and for real telecoms thought-leadership, my own Future of Voice / Telco-OTT Strategies workshop with Martin Geddes (details here, sign up here).

That said, I'm not going to give away all of my new analysis about RCS in this post, just certain strands - the full story is reserved for my consulting and workshop clients, or paying subscribers to @DApremium on Twitter.

 

If you are interested in a consulting workshop about Joyn/RCSe please get in touch. I am particularly interested in hearing from COOs, CFOs or others having to make investment decisions, who need a counter-argument or "bear case" to set against the position of internal or vendor RCS advocates.

Note: One or two commentators on Twitter have accused me of having confirmation bias (giving disproportionate weight to data that confirms existing beliefs), so I've been very consciously "open-minded" about this whole area. At MWC I made sure I had a couple of Joyn demos without preconception or prejudice, and I seen the official GSMA "pitch" several times at conferences & webinars. Some of my opinions have shifted slightly, but overall I am still broadly negative.

*Sign up for this blog's email list*     *Attend #TelcoOTT / Future of Voice workshops*

Status

It's too early to judge based on results - we've only had Vodafone Spain launch, albeit in a very limited beta/trial fashion (5-10k downloads and very mixed reviews according to Google Play, especially as some comments seem to be from internal VF folk). German operators have talked about May as a target date, and "summer" seems to be the timeframe for a broader European launch. Overall, there have been many delays and slippages - it's interesting to compare each GSMA presenter's charts at conferences with the previous ones to see what dates have moved. France, Italy and South Korea are all allegedly launching in H1'2012 as well - I'm willing to bet that at least one misses that date, especially for a full, all-MNOs, interoperable launch.

That said, one thing that seems to be clear recently is that RCS is being driven very heavily "from the top". There's definitely tighter marketing and messaging. I'm expecting to see IMS conference speeches with "See? We were right all along!" self-congratulatory (and very premature) messages. And to be fair, Joyn as a brand isn't bad, even if some amusing acronyms are possible. 

There's also a sense of urgency and committment which is (just) the right side of desperation. There are a lot more companies with "skin in the game", albeit with different levels of financial imvolvement. (Notably though, most vendors are dual-purposing their solutions for both IMS/RCS and also TelcoOTT-type use cases). The concept of "fake it till you make it" is understandable from a marketing point of view, but the mantra of "it's just there, it just works" is a huge liability, if it isn't/doesn't.

In my view, a better strategy would have been to target RCS at specific niches or use-cases, rather than pretend (against all evidence and realistic expectation) that it's going to suddenly become "ubiquitous".  (I wrote a piece about "the death of ubiquity" a while back). Nobody in the industry believes RCS will be everywhere - and certainly not on a 2-3 year timeframe - so it is credibility-damaging to assert it anyway. Not to mention the increasing share-of-wallet that will accrue to fragmented rather than ubiquitous telecoms services & capabilities.

What's it for? And why will people use it?

There are still very mixed messages about whether RCS is supposed to be a competitor to so-called OTT players, or something else entirely. I've yet to hear a single compelling reason why any existing user of WhatsApp or Kakaotalk or Facebook or BBM would be persuaded to switch to Joyn, and for which use-cases. 

The usual argument seems to be that "not everyone has smartphones" or "not everyone downloads WhatsApp, so this is a service for everyone else". Both of these arguments are completely specious - I cannot think of a single successful technology or service that was driven by late-adopters, especially a communications service which relies on Metcalfe network-effect square/exponential laws, and which is heavily driven by popular individuals as trend-setters or social "hubs". Plus, downloading apps is no longer onerous. Some people even view it as fun. (I suspect a lot of IMS engineers still have old Symbian phones, which might explain a few things).

Put another way - this late-adopters-first approach sounds like an attempt to "cross the chasm", but backwards.

Nevertheless, the force being applied to try to "make RCS a success" is commendable. I've met a number of people from operators recently - even from disruptive Telco-OTT business units - who seem to have had an edict handed down that they MUST have RCS compatibility. That said, it's fair to say I've spoken to a few supposed "converts" who have been singing its praises through gritted teeth.

Attitudes also seem to be different in the US to Europe. 

In Europe, the story is muddled. RCSe is being pitched as an OTT-beater (by some), SMS 2.0 (by others), an easy option for late-adopters without smartphones or Facebook (uh huh) and a variety of other mostly unconvincing stories. There's quite a lot of general skepticism about IMS, and an awareness of awkward practicalities such as 50-90% prepay users who buy phones unlocked without operator apps (and who SIM-swap a lot).

In the US, the approach is about much tighter coupling of RCS to VoLTE, to create a completely new personal communications experience for all-IP mobile networks. There's much more homogeneity in the user base (mostly on long contracts), less fragmentation among service providers, and a mentality that they can make IMS work. [We should see the re-unification of the now-divergent RCSe and full RCS in RCS5.0. At some point].

There's also more emphasis in the US on using RCS as a developer platform. In my view, it's a bigger bet, but a rather more coherent one, especially as 4G has become a marketing issue and the CDMA operators are being forced to LTE anyway. So they really need VoLTE or a VoIP alternative, and thus they seem to think that RCS might as well come along for the ride. Some of the demos and mockups I've seen (eg from Summit and D2) even look quite slick.

But it's also heavily interdependent on other issues - for example, if VoLTE struggles with radio issues (eg voice quality, cell handover or battery consumption) then RCS is tightly coupled and gets delayed as well. LTE outages on Verizon have also been blamed on the IMS core, which doesn't bode well.

Competition is intensifying - and not just from apps

And delay is critical here, because the longer it takes, the greater a foothold Apple, Google, Facebook and others (Microsoft/Skype?) will have. I can't see Apple ever putting a full, native RCS capability in its devices - they might do a server-side cludge via iCloud, but put a new telco comms client (and IMS!) on an iPhone to compete with iMessage and FaceTime, much less a SIM-free WiFi iPad or iPod? No, that seems implausible, especially in the short term.

Google is already allowing Android OEMs to implement RCS and presumably will do its own variants within Motorola (for now), but I'm unconvinced they'd put it in the basic Android build - again, not least because it's used increasingly in non-SIM/non-telco devices like tablets, and it won't want to sideline Google Voice, G+, GTalk, GMail and its various other comms properties.

There's also a sub-story with Google's involvement in WebRTC - it knows that much P2P communications isn't going to remain a "service" or even an "app" for long - it's going to be a simple feature of the browser, and that any service will need to be something provided over and above simple transport of voice, message or video. (WebRTC is a large-but-silent elephant in the communications services room. It'll take a few years to hit mobile in a big way, but has the potential to be the single biggest disruptor for the entire industry).

Facebook's 400m mobile users makes the Joyn story of "it's just there, it just works" look ridiculous already. It's already much more widely available than RCS will ever be (including down to featurephones with Facebook Zero, Java and even USSD / SIM toolkit applications - as well as being on PCs and tablets everywhere). If the telecom industry wants something "ubiquitous" it needs to go well beyond IMS-capable devices.

Then we have Microsoft, BlackBerry and numerous other players, none of which must see RCS as a panacea, even if they are getting arm-twisted into including it in devices by carriers. But if anyone thinks that RIM is going to willingly downplay the BBM experience, or that Windows/Skype messaging is going to be based 100% on an RCS API, they're on a different planet to me. [Edit - some details on WP8 + RCS here]

Developers, developers

Overall, I've got more sympathy for the US RCS approach, because at least there's a consistent story - and, critically, there's a clear developer angle. I think that RCS/RCSe/Joyn has very little chance of success (anywhere) as a messaging app but I can just about buy into the API story, at least in concept if not execution.

  

I can envisage certain B2C use-cases for video-share, such as customer support ("No, connect the wire to that socket"), or perhaps C2C mashups with a map ("I'm in the pub... where are you exactly? Look, I'll just send you a navigation widget"). But the problem with all of these - as with all other telco APIs - is convincing developers that this is the best route to solving the problem, something that is going to get ever-harder as the same features start appearing in HTML5 as well as native app plaforms. And I suspect that HTML5 - and even the telcos' own WAC-type device APIs - will be "just there" and should "just work" at least as well.

(It wouldn't surprise me if the industry tries to somehow tie such device APIs into RCS as part of its work in WAC and W3C - but I really don't expect that to be universal as HTML5 will extend far beyond mobile phones / SIM-enabled devices)

Some of what companies like Solaimes are doing around "thin client" RCS, with the bulk of the work done in the cloud, and just a much lighter app (or browser) on the device makes sense, especially as it makes it easier to do RCS-as-OTT implementations - something I think is critical if it's to succeed at  all. I'm less convinced that the phonebook / contact-list is where you would want to anchor such services on the phone, though.

OTT-RCS

One of the biggest failings of the current crop of RCSe concepts is tying the app to the SIM card - firstly because many devices don't have SIMs, and secondly because there needs to be the ability to download 3rd-party apps onto phones running on networks which haven't signed up. (eg a Vodafone Joyn app on a 3UK phone).

Increasingly,  people will also have multiple connected devices, and will start to want the same experience on all of them. If I've got a Vodafone SIM in my iPhone, an Orange one in my tablet, an unlocked MiFi with various national SIMs, a PC on WiFi, an MVNO-powered smart-grid electricity gadget, and a dual-SIM Android for travelling, I won't want to have a dozen separate RCS accounts. And that's even before I try porting them when I churn.

RCS is already usable over WiFi, so it will have to be OTT at least some of the time, especially on devices that don't have a SIM card. So that begs the question - why not have it OTT all of the time?

Interconnect

This plays into a critical theme. What's the interconnect business model (between operators) for RCS/Joyn? It's not something I've heard discussed openly anywhere.

Does an operator "terminating" messages or video-sharing get paid by the "originator"? On what basis? And if I start a chat with another person, but *they* upgrade the session to video or sharing, who's the originator anyway? Or is RCS going to be a "bill and keep" service where there is no commercial arrangement? How does it change for OTT-style RCS?

It could be that the reason I haven't heard anything is because RCS is going to be free at retail in perpetuity - and therefore will also be free between operators, so interconnect billing isn't needed. But that would be most unlike any other area of the telecoms industry, which mostly hasn't even been able to grasp the idea of "freemium" to any extent.

It's notable that some of the smaller European operators seem to be the most skeptical of RCSe, and I wonder if that's because they're worried that they become "net exporters" and end up having to pay out cash, just to deliver a service they can't even monetise directly with end-users.

In any case, re-hacking the wholesale billing and mediation side of operators' IT stack to handle RCS can't be too palatable for many, especially if they're currently in the middle of a transformation/upgrade cycle anyway. Add in dealing with RCS in the network policy and charging (eg how do you treat the "OTT" bits of RCSe traffic when it's sent to/from a PC?) and it becomes an even more expensive exercise.


International

The assumption behind Joyn is that the main use-case is similar to SMS - domestic peer-to-peer messaging between friends, for example. While that's also true for a lot of BlackBerry BBM use and (in certain countries) WhatsApp and some other Internet services, it's much less true for platforms like Skype which have a large international component.

Because RCS will only get adopted slowly (I think it will be doing very well if it achieves over 2% global active use, or over 10% for any country/operators, by end-2014) its uptake is likely to be much more community driven, or by specific niche use-cases. It will take a long time (if ever) to be expected to be available as a default by users.

One group that needs to be addressed, if RCS is really going to compete with Internet peers, is the international user base. Firstly: does it work, and secondly, does it cost extra? This brings the interconnect question right back to centre stage. To use an example, a friend of mine in London currently uses WhatsApp primarily to chat and exchange videos/photos/links with her girlfriend who's studying in the US (with a local US SIM). Alternatively, they use Skype for long calls or videocalls. The alternative - paid per-message international SMS or IDD voice - is clearly not a viable option.

Will RCS make any different to that scenario, where perhaps one user is on Orange, and the other on AT&T? Neither telco will want to risk cannibalising IDD telephony and international SMS revenues today, so can they construct a mechanism to allow Joyn-type apps to compete for that use case? If not, they can't expect RCS to be a realistic competitor to WhatsApp, Skype and its peers: "free IM... as long as your buddies aren't abroad" is a poor fit with user expectations.


Summary
 
As I noted above, this is a snapshot of my current thinking, on a few areas that RCS/RCSe/Joyn needs to address.  Overall, the technology is starting to look a bit more like a complete proposition, but it was already much too little, too late at end-2011 and it's now even later.

In 2012 we've already had Instagram annointed as "the next big thing", we've seen new services like Pinterest spring up as flavour of the month, and only yesterday I heard about astonishingly fast viral growth to 30m users of "Line" a new Japanese messaging app. It's added 20m just in the extra time that RCS launch in Spain has been delayed.

The idea that RCSe will be a "Top 10" success against such a fast-moving competitive background is improbable - and even if it does, getting beyond a short-term "one-hit-wonder" must have lottery-scale odds. I really can't see how it might stay the favoured, coolest messaging app given the furious pace of evolution by startups who actually employ designers and behavioural psychologists, and who can roll out an updated version tomorrow.

There is a (small) chance that RCS might evolve to be the next "lowest common denominator"  communications platform alongside telephony, SMS, email and postal services. But even if it does, it's far from clear that such ubiquitous forms of communication can retain more than a tiny fraction of today's telecom market - especially as WebRTC takes hold. Every user is building their favoured personal "wardrobe" of fashionable communications services. The share-of-wallet of the telecoms equivalent of basic, proletarian Marks & Spencer underpants isn't going to be very high.

I'm running out of terms for RCS - I've used "dead" and "zombie" already in the past. So I think I'll just stick with "inanimate". It's still not moving, and it's certainly not capable of running after its competition with much vigour.


*Sign up for this blog's email list*     *Attend #TelcoOTT / Future of Voice workshops*