The death of communications "ubiquity" - and why the GSMA has got it wrong on RCS & VoLTE

Overview

This is a long and important post about the future structure of the telephony, messaging and communications services business. It argues that "ubiquitous services" are a thing of the past, and that the telecoms industry needs to embrace fragmentation, not fight it, in the future.

It leans on the work I've been doing on my Telco-OTT report, my recent advisory work with operators and others, as well as the findings that I've learnt during my Future of Comms events & operator engagements with Martin Geddes. (Sign up for our newsletter here)

It covers:

• The history of telecoms ubiquity
• Why fragmentation is happening now
• The user appeal of "silo" services
• Why service standardisation can do more harm than good
• Why RCS & VoLTE may hasten the demise of the traditional operator model
• What can be done by operators about communications services

But first, let me set something straight.

I make a sizeable % of my revenues from mobile operators and "traditional" telecom vendors. I do not dislike them, nor do I want to see them go out of business. I'd like them to continue having the need and means to pay for my services, as well as the funds to build out faster and better networks.

But that doesn't mean I'm a cheerleader, especially when the telcos sometimes act collectively like a herd of ostriches. It is in my own long-term interests to see the telecoms industry maintain its health, and so I'm unafraid to make some hard calls in the short term when I see imminent strategic mistakes.

I also certainly recognise that large organisations harbour many different opinions and initiatives, and I meet as many clued-up and insightful operator employees who I respect and learn from, as I do relics of the telecom Jurassic period who make me shake my head in bewilderment.

The history of telecoms ubiquity

Perhaps the largest failing of many I encounter in the communications services industry is their belief that "ubiquity", "standards" and "interoperability" are always more desirable (and profitable) than "niche", "proprietary" and "silo" as service attrributes.

If anyone has any doubt about this, consider how a "niche" provider of "proprietary" mobile phones & computers now makes enough money to significantly alter the overall profitability of corporate US as a whole, while another "silo" provider has just filed for an IPO that would comfortably put it in the list of the Top 10 telcos by market cap.

Clearly for some organisations, ubiquity is far from essential. So why is it still taken for granted in telecoms?

This "standards first" mentality is most damaging in the area of personal communications - specifically around voice and messaging services. It is often taken for granted that "ubiquitous" services or applications are inherently better than more tailored or niche alternatives.

Now it is certainly true that we have a number of successful, useful and ubiquitous services today - telephony (fixed and mobile), SMS, and (for all intents and purposes) MMS and email. I am excluding "Internet access" as that is a connectivity service rather than an application.

Clearly, taken together (especially telephony and SMS) we have a huge precedent for ubiquity being "good". They generate getting on for a $trillion per year worldwide. We also get a warm and egalitarian feeling from their democratic nature  - everyone can have them, whether they have a $20 phone or a $1000 super-device. Against that backdrop, it's easy to see why people hope to find the "next ubiquitous service".

It is also easy to see why organisations such as the GSMA are so emphatic about re-inventing and promoting "ubiquity" as a principle. It has had a hugely successful history, and they would like to perpetuate that trend - both in terms of democratisation of communications for users, and in terms of control and profitability for their members.

But the problem is that from now on, Ubiquity is Dead in telecoms. Unfortunately, the telecoms past is not a reliable indication of how the future will evolve. New services can never become ubiquitous again, while the existing ones will slowly, but steadily, die. (See Martin Geddes' fantastic article on "peak telecoms" for more).

That's not all. Not only is the age of ubiquity over, but attempts to "force" ubiquity may well backfire and make the fragmentation and cannibalisation worse and faster. Such attempts are inherently "brittle" and will lead to unsustainable tensions that will at some point break down catastrophically, rather than gracefully.

 

Why fragmentation is happening now 

In a nutshell, fragmentation of communications services is happening "because it can". 

The history of the telecoms industry has been about standardisation and ubiquity (at a service level) because of the costs and complexities involved in bringing new applications to market. They have needed to be hosted in the network, "hard-wired" into dedicated boxes, linked to complicated billing and OSS systems. The phones were essentially "dumb endpoints" with no ability to host much application logic themselves.

Also, historic regulatory structures have tended to drive national regimes for licencing, numbering and interconnection, fragmenting the providers of a few well-defined services to provide competition, rather than encourage competition between services. That is unsurprising, given the technological limitations of the past. In Disruptive Analysis' view, there needs to be some significant regulatory evolution to cope with the new landscape.

The old backdrop has now changed because of multiple trends and drivers:

• The growing base of open smartphones and appstores allows easy distribution and installation of 3^rd-party mobile communications applications 
• Home PC & broadband penetration catalysed the initial growth of popular new communications services, that have then reached across to the mobile domain (webmail, IM, social networks, PC VoIP etc).
• The general trend towards “cloud” is catalysing the separation of application hosting and network access.
• Operators are starting to de-layer into NetCo and ServiceCo divisions anyway, either because of regulatory intervention, or by the direct entry of new wholesale-centric "UTF" (under-the-floor) operators that are forcing separation through competition.
• All-IP networks – and especially LTE – are forcing a range of decisions to be made now about future operator-hosted applications and supporting infrastructures.
• There is growing awareness that “telco grade” QoS is not always the pre-eminent driver of customer adoption, or arbiter of communications excellence. Some customers will accept lower network quality in exchange for higher experience quality, for example through clever web-based interactions. Facebook and Skype exemplify this.
• Software and development tools and techniques have improved massively, along with supporting capabilities such as Amazon cloud platforms to host scalable applications.
• CFOs are aware that much of the value creation in the communications and Internet industry has been driven by asset-light, rapid-growth services such as Google or GroupOn. They want to capture some of this capital growth for shareholders, even if it does not fit traditional revenue/margin business models.
• WiFi allows a variety of communications services to circumvent operator visibility and control, exploiting fast and low-latency IP connections.This then seeds the market with applications capable of using HSPA+ and LTE networks when they reach the necessary quality.
• A few "non-Internet" OTT services have also emerged - notably BlackBerry Messenger (BBM) and various corporate VoIP/UC products.

Taken together, these mean that innovation - and fragmentation - of communications products has accelerated. Companies like Viber and WhatsApp have been able to emerge with tiny amounts of funding, creating improvements on legacy standardised alternatives, and benefiting from viral adoption and social media word-of-mouth. Even if a new standardised service is temporarily popular, it will need to "run just to stand still" as otherwise users will churn to newer, cooler alternatives.

The user appeal of "silo" services

The generally-accepted assumption in the telecoms industry is that end users always want ubiquity. Services need to work everywhere, on every platform, for every user. Isolated or proprietary “islands” are seen as impediments. Ideally, services are standardised and adopted by all operators. Stories abound of how SMS only “took off” after it become possible to send messages across networks, or how "everyone just wants to pick up the phone and call someone".

But this assumption needs closer scrutiny. Users do indeed want some services that work over all access networks but they also seem to be happy to tolerate access-neutral service islands – even where there are other constraints such as lock-in to specific device platforms.

Experience seems to prove that users are willing to tolerate (or embrace) fragmentation in messaging in particular – many see it as a benefit, in compartmentalising their groups and slightly-different modes of engagement. Users seem entirely at ease having multiple IM and email accounts, SMS/IMS, Twitter, Facebook, BBM and so forth. Disruptive Analysis believes that the same will happen with voice capabilities – they will fragment and multiply, absorbed into multiple applications and web services, rather than just being “phone calls”. Apple’s Siri is a good example of this.

The population is getting much better at multi-tasking and segmenting its communications experience. Many users have multiple IM addresses, logins, devices, numbers and other identifiers. Despite the industry bodies crying wolf about the dangers of losing ubiquity (or trying to converge the various apps with aggregation layers), this is not a "tragedy of the commons" scenario. 

Fragmentation often adds value and consumer utility, rather than reduces it.

Customers seem highly able to find the application(s) which precisely fit their needs and price/quality points, even if they don’t have the same level of ubiquity and interoperability seen in the traditional telco world. In some cases (eg BlackBerry Messenger), a lack of ubiquity has counter-intuitively been re-framed as desirable exclusivity for example.

In the past, 99% of human "distant" communications has used a few standardised models - telephone calls, SMS, email and so on. 

Now, the picture is shifting. For maybe 80% of communications, there are now better or cheaper tools available - especially among closed groups such as friends or employees. "Ubiquitous" services are being downgraded to being just a fallback. If I want to invite 50 friends to a birthday party, I'll send 48 invitations via Facebook, and the other two by SMS to the recalcitrant non-users. Similarly, once in a while I'll make an old-school phone call for a pizza, as the restaurant isn't a "friend" on Facebook or a contact on Skype.

The problem is that for the telcos, the standardised services (old and new) are still expected to be primary channels, not just the secondary option, or lowest-common denominator.

In other words, new services need to be either

• The best primary option for a given use-case (& to stay the best through regular updates)
• The cheapest fallback as a compromise, when none of the preferred silos works

Why standardisation can do more harm than good

But even if we accept that services like iMessage and QQ will take a good share of the "optimised communications" market, surely it makes sense for the industry to at least try to create new ubiquitous services? Like, to name a couple of examples, RCSe or VoLTE?

On the face of it, that sounds like a smart solution. If it doesn't cost that much to try for a collaborative, standardised solution, then what's the harm in trying?

And that's where the problem lies.

In my view, failed attempts at creating ubiquity may in fact be worse-than-useless. There may be additional damage caused to operators' legacy revenue streams and customer loyalty, above and beyond that which will happen anyway.

For example:

• Some new services will be integrated with existing telephony or messaging. If the new experience is poor, then usage of the older services may drop too, and the user may investigate alternatives more thoroughly. For example, mid-2000's phones which put 3G videocalling above telephony in menus caused significant user resentment.
• Users may opt for devices that do not feature the new "forced ubiquity" services - for example unlocked $100 Android phones, or Apple devices. They may also "root" or jail-break operator-supplied devices with different software stacks
• One or more operators may pull out of the GSMA/3GPP model unilaterally (for services, not underlying network access) leading to a crumbling of traditional models in an unpredictable fashion - perhaps through removing SIMs from the value chain and moving to alternatives (eg Soft-SIM)
• Operators may be forced into infrastructure investments that are expensive or cumbersome (eg full IMS implementations). They may also delay investment in LTE or migration of users towards it, while they find alternative voice and messaging solutions.
• The time and effort wasted on failed "ubiquity" projects may have impacts beyond the upfront costs. Delay may mean relinquishing other opportunities, a reduction in work to enhance "old" services, and also allow other companies to further overtake the telcos and dictate events and pricing.

The problem is that services designed to work in a ubiquitous fashion often work poorly in a non-ubiquitous context. They're perfect at 100% compliance, useful at 90%, OK at 80%....but then below that, they rapidly become a liability, especially if they get in the user's way in the device UI. At 70% "ubiquity", the chance of any two users having the capability is 49%.

Conversely, services designed as silos typically have mechanisms to cope with that fact. They have sophisticated "invitation" mechanisms, APIs for importing and exporting communications if needed (eg SkypeOut / SkypeIn), or are intended for specific niches and communities. Their makers expect them to exist in a convoluted world - and even Facebook and Google aren't arrogant enough to prohibit their apps from being deleted or uninstalled.

Why RCS & VoLTE may hasten the demise of the traditional operator model

In two weeks' time, MWC will launch a huge upsurge of talk about the GSMA's favoured RCSe and VoLTE programmes. We might even get the long-delayed launch of the Spanish RCSe service, rumoured to be called Joyn. 

For the reasons above, I think that RCSe in particular is one of the most damaging and divisive services that the telcos and their vendors have proposed. It is a huge and unnecessary distraction at precisely the wrong time. It has numerous flaws in design and conception, and in any case will have (at best) patchy acceptance by vendors. It is too little, too late, and in the wrong direction anyway. The industry can't even decide if it's supposed to compete with Internet-OTT players or complement them.

Worse, the approach by the GSMA is somewhere between strident and delusional, with a side-order of bullying.The mantra of "it's just there, it just works" has been trumpeted loud and long, but is entirely the wrong concept. There is a transparent attempt to pitch RCSe as a "fait accompli" in the hope that more operators will sign up, for fear of being left behind. 

That approach can most charitably be described as "fake it 'till you make it"

Firstly, it isn't "just there" on all devices - the iPhone implementation will be app-based as Apple is unsurprisingly unwilling to implement it natively, as it would compete with its own communications products such as iMessage and FaceTime. It's unlikely to be in the native Android stack but implemented by OEMs on certain specific phones. Its relationship with RIM and Microsoft remains unclear (especially its fit with/against BBM and MSN/Skype), and it seems improbable that "vanilla" featurephones for the prepay market will integrate all the software, unless the manufacturers are convinced it will sell more devices. Even Samsung, a supporter, will have to position RCSe carefully against its own ChatON service.


In addition, the attempts to strong-arm manufacturers by getting handset certification rules changed at the GCF, or specifications adopted at OMA, look like a triumph of power over consumer demand and "ecosystem good practice". Such moves appear Machiavellian - they put the "cart before the horse". When/if RCSe has proven itself to be liked by users and successful, then it is the time to entrench and optimise it.


Worse, the effort to embed RCS capabilities low-down in the device "stack" will  make it difficult to update (or bug-fix), and possibly unable to be deleted or removed by users if they decide they don't like it. Keeping a disliked and possibly invasive feature front-and-centre on a phone is a good way to breed user disloyalty.

VoLTE is a bit different and will probably emerge to the market in some usable form - but likely later than anticipated and only by some operators for some users. Also, the timelines are a bit different - it won't be deployed (in most cases) until LTE coverage is good enough, while the SR-VCC mechanism for handoff to circuit-calls has only just been lab-tested. By that time, it should be apparent to all that phones will have multiple voice services (not just telephony) and so hopefully it will be implemented to be a "good citizen" in the company of various other apps. 

There is also much less rhetoric about VoLTE being "ubiquitous" - except in some vague, "middle of the 2020's utopia" sort of fashion. Apart from anything else, the telcos know that it will have to coexist with 2G and 3G circuit-only phones, as well as various flavours of VoIP. That said, if early implementations are problematic (eg poor voice quality or battery life) they will hand the battle to Microsoft/Skype or perhaps one of the new Telco-OTT alternatives. But that is a different issue to the "forced ubiquity" weaknesses of RCSe

What can be done by operators about communications services?

On a recent call with an operator strategist, a point was made to me that telcos increasingly need to be "portfolio managers" rather than being focused on traditional single-product metrics. This is absolutely the case for next-gen communications services around voice and messaging (and also video).

The winners in this space will be the ones which acknowledge that they are not the only game in town, and which aim to gain traction gradually, and alongside others, pulled along by users actually liking the service and its ongoing iterations. Designing and solidifying a platform technology, before getting real customer feedback on early service implementations is foolhardy. 

Designing the mobile IMS architecture before services like RSCe and VoLTE get wide user acceptance is a 1970s-era view of telecom service development. RCSe should have been designed as an OTT-style service first and then when it met user demands (and was embraced enthusiastically), it could have been "platformised" later. Given that there are various RCSe-type OTT options (eg Metaswitch Thrutu) it is perhaps not too late. 

The GSMA and the G5 operators urgently need to drop the claim to ubiquity for RCSe, ideally before Barcelona. Facebook's 400m+ mobile users make them look foolish - if reach is the critical indicator of success, they have already lost the battle. The claim in various RCS slide-decks that it's somehow difficult to to install 3rd-party services is even more risible: it's much easier than going to a shop to buy a new RCSe-capable phone, while the operators themselves will be depending on that much-derided model for iPhones and existing Androids. 

Even "it's just there" is empty rhetoric, when even prepay SIM cards can work out-of-the-box with OTT services like BBM, while it clearly won't be "just there" on iPhones at least, and probably many other devices. And let's wait to see how RCSe actually operates in the user's hands before we claim "it just works....", when we know if the fourth word is "well" or "badly". If it's the latter, it will do the operators more harm than good.

My view is that proponents of RCSe should forget about "ubiquity" as a driver, and instead focus on specific niches or use-cases, and evolve the service over time based on user feedback. Because this may be country-specific, it should also move away from the multi-operator interoperability model, and towards a Telco-OTT basis. It may be that Vodafone does something clever with RCSe implementations that Orange does not. It could be that we each end up with three or four different RCSe-OTT apps on our devices if they're done well.

Operators should be thinking about specific use cases and service "look and feel". They should absolutely have a long-term aim to launch services that could reach a billion people or more eventually, but should not try and leap straight there on the first iteration. They need to adopt Google's approach and try services like Wave, Buzz and Google+ and be prepared to kill them and move on if they don't work. 

Creating binary "unkillable" services that can only ever be ubiquitous or entirely absent is an existential mistake. Given what's going on in the industry, trying to create "forced ubiquity" will likely accelerate the movement towards "total absence".

Economists might want to think about an unfortunate parallel here, with attempts to force a certain "ubiquitous" currency on a diverse group of nations, leading to a possible "disorderly breakup" when one defaults on its debts, with "contagion" taking down the other dominos via "interoperable" holdings of debt by banks. 

When the first major operator "defaults" on the 3GPP/GSMA world-view, the outcome will not be pretty either.

So for telecoms, ubiquity is dead from here onwards. Even if RCSe miraculously succeeds, its most optimistic destiny is to become the lowest-common denominator fallback when nothing else better is available. The sooner telcos, their vendors and the GSMA admit it, and embrace fragmentation and flexibility, the sooner they can hope to recreate their role as services providers of choice. 

Whether operators partner with Internet companies or each other, acquire promising Internet startups (eg Viber, Tumblr, WhatsApp, Pinger, Path, Yammer etc), or build their own Telco-OTT services from the ground up, an acceptance of "communications diversity" is a non-negotiable starting point. 

They need to find best-of-breed communications apps, because the value is going to shift permanently. "Ubiquity" = "lowest common denominator" = "minimal value".

(Disruptive Analysis has recently published a report on Telco-OTT Strategies. Click here for more details)

There will be a pushback against user profiling, big data & analytics

When it comes to Internet or telecom companies and personal data and privacy, I think there are two classes of abusive behaviour that tend to annoy end-users:

• Revealing specific data-points without permission
• Over-analysis of user behaviour during longer periods of time

The first class is more "obvious" - we've seen outcries about abuses from companies such as Google (with its WiFi logging and Google Streetmap content), Telefonica O2 (revealing phone numbers to websites during mobile browsing) and Carrier IQ (logging all on-handset activity).

But the second type is more insidious, yet leaves many people with a sense of unease. Just how much does Facebook know about you? What can Vodafone or AT&T or Etisalat deduce from your mobile phone usage - and link to your billing/registration details? What exactly are the "dark sides" of Google new privacy policy as it integrates its various personal datasets

Of course, this worry isn't confined to telecom and Internet companies. Both Microsoft and Apple probably see more of our behaviour than we feel comfortable with. And, obviously, governmental scrutiny extends to both instantaneous activity (eg CCTV, passport checks) and longer-term analytical capabilities.

Many libertarians rightly dislike the idea of governments joining the dots & connecting various datasets about citizens. The state should fear the people, not the other way around.

The same is true of online and telecoms user data as well. It needs to be collected to *serve* end-users, not creepily over-analyse them for the purpose of selling advertising, or attempting to up-sell them. I always have a sense of unease when I speak to a OSS/BSS companies that try to predict when customers are about to churn through service usage analytics, for example. I don't want to have my intentions inferred, especially by companies I'm paying money to. It's slightly different for Facebook, where I am consciously aware that I am "the product", as it's a free service.

Now some companies seem to use analytics responsibly - they're open about it, and demonstrate how it offers value. Amazon's recommendations are pretty useful, for example - and moreover, they are not intrusive (this is critical). Conversely, many mobile operators know exactly where they have coverage gaps, from their RAN analytics, but do nothing to plug the holes (some get the same data from their social media analytics & ignore that too).

Either way, we are likely to see more abuses (and also more useful instances as well). Both telecom companies and Internet players are acquiring more and more personal data - and are aggressively expanding their analytics capabilities. I'd expect "big data" to be a big deal at MWC.

However, I sense a mounting push-back against privacy invasion and over-analysis. We already see regular outcries about Facebook's fluid and questionable privacy policy and website tactics. Disgruntled people use that very same service (as well as Twitter and others) to complain vociferously - and have succeeded in getting changes made rapidly by the company. CarrierIQ fell before the lynch-mob of social media too - and O2 shut down its phone-number exposure within hours after a concerted online campaign.

I expect we'll see more of that type of thing... but I also think we'll see a fightback about on the analytics front too. I'm expecting to see a steady rise of behaviours and software tools that deliberately set out to undermine oveer-analysis of customer data, especially where there is low transparency, or the value accrues disproportionately to the company rather than user.

We'll see software plug-ins that log you out of Google automatically unless you're specifically searching or using gmail.com. We'll see obfuscatory smartphone apps that send "spare" bundled SMS
to random (well, actually pre-agreed) numbers. We might get easier or automated ways to switch off the cellular radio to avoid location tracking. We'll get software layers that make it easier to manage multiple Facebook accounts. We may get ways to share or pool "identities" - if necessary with record-keeping to keep law enforcement happy. We'll get browsers that generate random traffic & go to random websites to minimise any profiling from the likes of Phorm.

You get the idea. There is a built-in negative feedback loop with customer data and analytics. If the "market" perceives that over-analysis of "big data" is a danger, then there will be a concerted effort to pollute those datasets, made ever easier by social media, HTML5 and smartphones apps. The interesting thing is that this trend will apply equally to telcos and Internet companies.
 
**NEW! DISRUPTIVE ANALYSIS' REPORT ON TELCO-OTT STRATEGIES here **

An update on @DApremium - the world's first paid Twitter channel. Now available with quarterly or annual subscriptions

It's now been six weeks since I announced the launch of @DApremium, my second Twitter stream - one which is available only to paid subscribers. (The original announcement with the background of the disruptive and ground-breaking concept is here).

Since then, I've added 173 tweets to @DApremium, and signed up a couple of dozen followers; a mix of standalone paying Tweet-stream subscribers, and those who have obtained access bundled with purchasing the new Telco-OTT Strategy Report, or various consulting engagements.

Firstly, it has been pretty exciting to see an entirely new business model come to life. I had a number of people express doubt that anyone would pay for Twitter access - and given my normal cynicism about many social media "innovations" (and my historic Twitterphobic stance) I can't really blame them. Nevertheless, it's been very edifying to prove them wrong.

It's also been interesting that other people have been watching the progress closely - my Future of Communications associate Martin Geddes tweeted the other day that he may follow suit, and a couple of my analyst peers have also asked about progress, when I've bumped into them. A few watchers of general social media trends also appear to have taken an interest. I'd love others to follow my lead here, as it would further validate the concept and give encouragement to more people to subscribe as a mainstream alternative to newsletters or other premium analyst content formats.

I've now got a good feel for how the Premium-Tweet concept should work going forward, both in terms of content and sign-up process. I think I've got the balance right between my normal free-to-air @disruptivedean posts, and the paid-for content. The paid tweets include my real "ah-hah!" insights and epiphanies, as well as more company-specific commentary.

This is a selection of recent paid Tweets:

1. Virtualisation of core IP infrastructure may be the answer to wholesale LTE mobile networks - have various network nodes as multi-tenant

2. Cisco's Videoscape + soft client architecture is an enabler for #TelcoOTT video services (eg telco buys football rights, sells/streams OTT)

3. Bundling SMS plan with data plan may stem short-term SMS rev erosion. But "forced bundles" cause customer resentment if low perceived value

4. Many telcos reporting results soon. Will be embarassing if vendor slides at MWC still show "scissor diagram" if data rev growth > volumes

5. For #RCSe to be taken seriously as a developer platform, G5 operators need to show it working for own major IT systems eg customer support

6. Microsoft more likely to acquire RIM than Nokia IMO. Easier integration Seattle-Waterloo & US Gov will much prefer NAm buyer for RIM

7. Think about your personal spend on voice/telephony. What % would you ascribe to the utility of true "moving about" element of mobility?

8. If Net Neutrality laws modified to permit "premium" QoS for certain services, strong argument that must be available non-discriminatorily

9. There's a strong argument for 3GPP to be broken up into radio, core & application bodies. Integration was synergistic, now its a liability

10. Discussion on LinkedIn VoLTE group asserts it is an "open" standard. Open? But biz model is closed: subs, SIMs, IMS, roaming etc.

Going forward, I am going to be putting the majority of my "event" tweets on the premium channel - notably from MWC - although I'll be keeping the items that should drive open discussions & debate on @disruptivedean. It's still too early to know how the "community" aspect will evolve on the premium channel - given that there are unlikely to be other analysts or pundits on it, I suspect there won't be as much to-and-fro. But over time, it may shift from a broadcast / newsletter model to one which looks closer to the LinkedIn philosophy. (I might actually set up an LI group anyway).

I'm also closing down the introductory pricing structure, and moving to a new plan. There are now two options: quarterly ($100) or annual ($300) subscriptions. The quarterly option has been added as a way to get a "trial run" for those uncertain about a full year's commitment.

The terms and conditions otherwise remain the same as I'd previously published . One new point though - I'm getting a number of "speculative" follow requests without payment. I'll try to track these down & send a Twitter direct message from @disruptivedean about subscription options, but I will reject the requests after a week if I don't hear anything.

The sign-up process is simple:

1) Pay for 3-month or 12-month subscriptions via credit card or Paypal, below.
2) Access @DApremium on Twitter, and request to follow
3) Send an email to information AT disruptive-analysis.com with relevant VAT details if you opt for the EU VAT-exempt pricing. Also, drop me a note with any particular areas you'd like me to cover when possible.
4) I will authorise the follow-request ASAP, typically within 24 hours of payment, unless I'm travelling somewhere obscure

Many thanks to my original pioneering followers, many of whom have shown an enthusiastic interest in the business model as well as the content. I look forward to having valuable online and offline discussions with a larger community of participants in future. (I'm also interested in discussions about extending the general notion of paid/disruptive social and community models for analysis - get in touch if you've got a neat business idea I might find valuable).

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You may want to send me an email anyway, or add me on LinkedIn so I can get to know my community a bit better. If you're an existing Disruptive Analysis client, please let me know and I can give you a complimentary subscription.

BYOD trend means BYOSP (bring your own service provider)... and will driveTelco-OTT services

One of the largest trends in enterprise IT right now is “BYOD” – standing for “bring your own device”. This is just a snappy acronym for what’s been happening for a while – employees using their own mobile phones, tablets or other products for work as well as in their personal life. Previously, it was given the less-cool name of “consumerisation of the enterprise”, although pedantically that also implies the use of consumer-grade services (eg Skype) as well as hardware.

BYOD is important for a whole host of reasons relevant to enterprise CIOs and their suppliers – security, management, fit with IT applications and so on. In the past, IT departments would have typically had a proscriptive “Thou shalt use company-approved Device X if thou wisheth to receive support”. Or in other words “Use your BlackBerry or E71 for business email, not your iPhone or Galaxy S”. But over time, the pushback has become more solid – often starting with C-level executives or top staff ignoring those edicts and demanding that IT support their favoured products. It’s a brave IT manager that will tell the CEO or top salesperson that they can’t use their iPad when they’re with clients.

But this post is not about those practical issues – it’s about how this impacts telcos.

The first point is that this potentially doesn’t just mean BYOD – it also implies BYOSP (bring your own service provider). Employees’ own devices, if used for business, are likely to be connected via a broad array of mobile network operators, or if WiFi-only, perhaps no SP at all. This is a completely different model to the idea of a corporate “fleet” of mobile devices all provided by the same company, with a bundled device+SIM deal. Instead, BYOD means that employees will have various SIMs, and various operator-customised versions of phones, plus some that are “vanilla” bought through retail.

This is a major problem for operators that have been trying to develop and sell enterprise mobility applications such as mobile PBX clients, or dedicated middleware for connection to back-end corporate applications. If a company’s IT department now has a mix of users with iOS, Android, Windows and other devices, connecting via Vodafone, O2, Orange and WiFi, it makes it much less likely that they will want (say) Vodafone OneNet or an Orange VPN client .

Instead, they will want applications that can work on any device (and OS/firmware build), running on any network. In other words, OTT-style functions using generic data connectivity – probably via the public Internet, but perhaps also via a dedicated connection like BlackBerry’s BES.

If you’re a regular reader of the blog, you can probably see what’s coming next:

If mobile operators seriously want to offer advanced mobile enterprise services, they are going to need to run them over their competitors’ networks, at least part of the time. Maybe they will be better when integrated with their own optimised device and network, but to reach the BYOD community they will need to push towards an OTT model themselves.

MNO services + BYOD + WiFi-only devices = mandatory Telco-OTT

That, needless to say, is easy neither for operators to accept, nor execute upon. Yet it will be essential, unless operators want to confine their enterprise exposure to the dwindling group of corporate-provided homogenous fleets of users.

This is one of the themes covered in Disruptive Analysis’ new report on Telco-OTT Strategies. If you're interested, contact information AT disruptive-analysis DOT com or click here

Telco-OTT Strategies report now published

The report is now available.

• 135 pages
• 88 operator services mentioned
• 4 service categories
• Content, video & portals
• Communications, social & identity
• Corporate & cloud 
• Connectivity

Comprehensive discussion of what "Telco-OTT" means, why it's inevitable, and key success factors for making it work. Covers everything from VoIP to femtocells to SaaS to IP-VPNs to portals to IPTV-anywhere.

For full details or to order via PO/invoice, please email:    
                                                                     information AT disruptive-analysis DOT com


**NEW! Contents are available here **

Or to purchase immediately by credit card or Paypal, please select licence option (1-3 users, or corporate) and click the links below. The report will be emailed as a PDF, wherever posssible within 24 hours.

Telco-OTT report (PDF) 1-3 users

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Peak Telephony - why voice has to be about more than phone calls

This thread is from my Facebook page. The original poster is a 23yo friend, others range up to about 40-45yo. I thought it was worth a post as it highlights the reason why re-organising a trillion-dollar industry about something as near-obsolete as the 100-year old "phone call" is so dangerous.


[Note: I don't know "Samuel" who defends the phone call, but by an interesting coincidence there's someone on LinkedIn who's a "technology analyst" with the same age & academic background].

Ruth: Am I alone in really not liking talking on the phone? Or am I a bit weird? It's just that someone phoning you on a mobile is a bit like someone leaping into the middle of your room yelling "Talk to me! Drop everything you are doing and talk to me RIGHT NOW! Talk to me!"

Samuel:  No different to a Facebook update

Scott: I like voicemail. My phone is for me to talk to people when i want to. Not for them to bug me at their leisure.

Ruth: Totally is, and to a text message. Those I can ignore and deal with at my leisure.

Matt: ‎*nods* Asynchronous communication FTW!

Samuel:  You can ignore the phone call too. No-one is making you answer it, it's just that the alert is a little longer. You obtain and deal with the information at a later date, just like with a text, except that rather than opening, reading and replying to a text, you're calling, listening and replying to a contact. Or opening, listening to a voicemail, and then calling back.

Dan: I totally agree with your aversion to phone calls. I used to think it was all talking to someone and not being able to see their expression but now I realise it's the inherent guilt that I'm busy doing something else at the same time as talking. Somehow it's fine to chat to someone face to face but it's impossible to talk on the phone without needing something else to do. Which is why Skype is evil - they can see what you are doing!!

Ruth: Sam, on a day when I am clearly very irritable anyway, do you have to make everything an argument? I was clearly just asking for a little light moral support for my stance, not a serious debate.

Fleur: Totally agree. People should ask for permission by text or email before calling.

Alex: I HATE talking to people on the phone. I can't see their expressions, and my own voice sounds so droning, and my gesticulations are wasted, and I get distracted so easily and my eye wanders to a book or something and then I lose track of the conversation and get flustered, and the horrible nagging ring just breaks in on life demanding to be heard, usually when I'm busy. Aaargh. I can talk to close family (who I can read even without expressions) while walking at night when there's not a lot to see or in Camden where there's a lot I don't want to see, but beyond that, ugh. I usually leave my phone off, or 'forget' to charge it, or 'mislay' it. Currently, I'm not entirely sure where it is, and suspect that it may be out of charge.

Ruth: I wish I could do that with my phone but it's also my texting device and I'm a very happy and regular texter. Is there a way to just "accidentally" turn off the phone part of an iphone? But not leave it permanently unserviceable in case I need to phone utilities to yell at them or etcetera (which rules out just smashing the microphone unfortunately)

**NEW! DISRUPTIVE ANALYSIS' REPORT ON TELCO-OTT STRATEGIES here **

800+ providers of telephony services in a shrinking market? Consolidation to Telco-OTT, not federation, is the answer

Every telco, fixed or mobile, operates its own telephony service. Some operate two or more - either with separate enterprise platforms, IMS (mostly fixed, but VoLTE for some in the future), or OTT-style VoIP.

This is ridiculous.

The conventional telephony market is peaking, and in various areas declining. Apart from emerging markets with new users, even mobile telephony is reducing in price and popularity, as people switch to messaging or in some cases Internet-based VoIP alternatives. Pricing regulation, and accounting changes, are also driving down the measured market size.

Yes, we see some consolidation in terms of networks for various reasons, but really, given that data use is growing and voice telephony is falling, it makes sense to decouple them. Telephony service consolidation is massively overdue, and has been hampered by legacy constraints about numbering, interconnect, roaming and so forth. Some of those constraints are regulatory, and some are about commercial inertia.

The advent of Skype and its peers is changing this. Skype is taking over a significant share of the most "open" part of the market, international direct-dial calls. That's a good and easy starting point, because pricing is egregiously-high, and most calls are from fixed locations, but there is much more to come.

The current "federation" model where each network owner runs its own voice service and they interconnect is a quirky legacy. The telecoms "establishment" would have you believe that on-net telephony will always be the highest quality. But the QoS argument is a red herring on at least two counts:

• Customers pay the highest prices for the lowest QoS guarantee - when roaming, where your home operator has very little visibility or control over the quality of the visited network.
• Continued insistence by operators and vendors that (if Net Neutrality laws were permitted) they could offer guaranteed QoS to third party providers such as Skype.

If you take the latter point to its logical conclusion, it suggests that, ironically, Net Neutrality is the only thing that allows operators' own telephony services to differentiate quality from third parties'. Today, the only voice service that most operators are allowed to optimise is their own.

If you stop to think about it, the economics are ridiculous. maybe 1000 global companies each offer the same simple service, locally, with expensive equipment, which could easily be centralised or redesigned with different architectures. That is 1000 providers of a flat or declining "electronic" service. They typically tie the "phone service" to other products like Internet access or  TV. Ten years ago, there were probably 1000 global mid-size retail chains of booksellers.

Even in banking and finance (a traditional national-oriented industry), we see cross-border acquisitions and centralised functions. We have centralised currency trading hubs, rather than each country having its own marketplace.

I recently flew between Singapore and London on Qantas, the Australian airline, quite literally "over the top" of both places. There's no mandate that anyone walking into (accessing) Changi Airport only uses Singapore Airlines.

In future, it will be ridiculous to suggest that anyone using AT&T or Vodafone's network can only use their telephony services. Obviously in fixed networks, various models of unbundling have been possible for years, and that will make similar logical sense in mobile as well. Either QoS mechanisms will be good enough to allow "managed" third-party access, or VoIP software will be good enough not to need it.

Looking ahead, I expect to see massive consolidation in the provision of basic commodity telephony services. The GSMA/ITU view that each network operator should have its own telephony service is an anachronistic, obsolete picture. We may well see innovative "non-telephony" voice services tailored to particular demographics, geographies or customer bases, but basic "Person A calls Person B for 5 minutes" will surely see aggregation.

We will also see some telephony move away from being a "service" altogether - speech will be a feature of the web, with spoken forms of words essentially little different to italic or bold. HTML5 and WebRTC are already starting that next phase of development. Some telephony will just become a mere feature or function of browsers or apps, rather than a third-party administered "service".

I predict that maybe 3-5 global players will dominate in "telephony services" by 2020, plus perhaps some regional or country-specific companies, for example if regulations are limiting factors in market evolution. There will also be some low-end vertically-integrated operators that just run 2G or 3G networks, for which 3rd-party telephony service is a more complex proposition - but even there, much of their back-end infrastructure is likely to be provided wholesale, by a company with more scale.

The obvious contenders from today's perspective are Microsoft/Skype, Google and maybe Facebook or Apple. Maybe also an infrastructure UTF player such as Ericsson or Huawei, offering their own direct-to-consumer voice services, hollowing out operators or just using them as a wholesale channel. Other newcomers like Viber or Vox.io might also spring from nowhere, with innovative approaches garnering massive support almost overnight.

But telcos could still have a role to play, if (and only if) some of them break free from the shackles of linking access and telephony service, ignore new "one-deployment-per-network-operator"  blind alleys like VoLTE, and emulate the new winners.

In my view, there is scope for a few telcos to become Tier-1 Global telephony players in 2020, after the market has consolidated massively. Those that win will be those that become proficient and successful at what I term "Telco-OTT" forms of voice service.

The current industry trajectory, of international operator groups sharing some core-network and application-layer infrastructure gives some scale benefits, but not enough. It lacks the "viral" nature of the best Internet-OTT players, which can capture users' minds, hearts and wallets, irrespective of their access providers.

The federation model can never win again - it is too slow-moving and bureaucratic, and cannot evolve services fast enough to keep up with the needs and whims of today's fickle communications users. The tired "ubiquity" argument is one which Facebook, with close to a billion users, and Google, with probably 2 billion+, have already won. There are close parallels between today's telephony and 2001's email market.

So, there will likely only be 1 or 2 telcos with major revenues from "vanilla" telephony in 2020.

And the real value will come from additional services, perhaps based around innovative voice and messaging concepts. Apple is showing the way here, with Siri. Microsoft may well do something clever with Skype and its other properties like Kinect or XBox. Google might do real-time translation in the cloud. Facebook might do some clever form of "social voice". None of those would work in "federated mode", based on the legacy telecom interconnect/standards worldview.

The Telco Telephony winners in 2020 will not only be those who can implement "Telco-OTT", but also those with a true vision of the "Future of Voice" that goes beyond just protecting the 100-year accident of linking phone service to network access.

Disruptive Analysis' new strategy report on Telco-OTT Services & Strategies is out next week. 

For details, email information AT disruptive-analysis DOT com, or see my pre-announcement blog post here.