November 27-29, 2012

South San Francisco Conference Center

Service Providers and OTT: WebRTC as a Game Changer?

Dean Bubley

Founder & Director

Disruptive Analysis

November 28, 2012

About Disruptive Analysis

• London-based analyst house & strategic consulting firm • Cross-silo, contrarian, visionary, independent • Advisor to MNOs, vendors, regulators & investors • Focus on 3G, 4G, operator strategies, VoIP, OTT, disruption • Published report on “Telco-OTT Strategies”, Feb 2012 • Workshops on Future of Voice & #TelcoOTT

– With Martin Geddes Consulting (credited for various slides here) – Next event in London & US in H1’13 (futureofvoice.com)

Twitter @disruptivedean . Blog: disruptivewireless.blogspot.com

It’s all looking pretty grim anyway

Voice & SMS saturation & cannibalisation

Regulation & competitive impacts

Weak content & VAS propositions

Economic pressures

Ecosystem competition

Connecting the last unconnected

Smartphones & data growth

Better segmentation, pricing & promotion

Innovative services & enablers

Embracing & exploiting fragmentation

“It’s all those nasty OTTs’ fault!!”

STOP looking for a scapegoat & take responsibility

Voice ≠ Telephony

• Now: 2G & 3G • Future: Smartphones & LTE

Voice

Telephony

Voice

Telephony

Video, context, sense Video

Gaming, CEBP, surveillance, social voice, TV voice etc

Voicemail Conferencing

PTT

Service

e.g. Telephony

Product

e.g. Skype, IP-PBX

Feature

e.g. Zynga IM

Function

A telephony demand cliff?

Telephony: Catastrophe imminent?

Price & revenue Demand Supply

Core question: Can data services offset the decline of voice & messaging?

Uncomfortable answer: probably not, based on recent evidence

Disruption and innovation are both inevitable & essential, irrespective of WebRTC

Voice & messaging go in-context

Peak telephony & SMS is here

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mobile core services revenue, indicative W Europe BASELINE, ie excluding WebRTC Total c40% fall

from peak

Mobile telephony

SMS & today’s mobile data services

Telephony c80% fall from peak

Personalisation is done by people

Mobile calls SMS MMS Email

Mobile calls SMS (RCS?)

99% of personal comms for all

use cases

Lowest common denominator just

when needed

User-selected portfolio:

perfect fit for specific use

cases

+

Fragmentation is valuable

Convergence & standards

Fragmentation & innovation

… new standardised services are neither necessary, nor sufficient.

They are irrelevant at best, and actively damaging at worst.

It will fragment “because it can”. Consumer need for

ubiquity is over-rated

Device diversity = OTT inevitable

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6

# connected devices owned

Probability of all of a user’s Internet / messaging devices being on a single telco’s network

Free 3rd party WiFi

Shared data plans only a partial response

Telcos already exploiting Internet

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

OTT-style services offer the only hope for continued telco services growth & increased relevance

Harsh truth: Telco-OTT mandatory

• Telephony & SMS prices have peaked

• Telephony & SMS demand has peaked

• APIs, HD, Video, Bundles only delay the inevitable

• Need for new voice-based services beyond “calls”

• Too fast-evolving for new “federated” services

• Too uncertain / innovation-driven for standards

Comms

Content

Cloud

Connec-tivity

Over 100 identified Telco-OTT products in the

market.

Telco-OTT: more than just VoIP/RTC

Biz models may not be obvious

…. Carriers need to move away from the obsession with

“subscriptions” with WebRTC/OTT

WebRTC: game-changer & threat

The future?

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

WebRTC is a magnifier & catalyst

Now

With WebRTC

My enemy’s enemy….

Copyright Disruptive Analysis Ltd. 2012

“WebRTC will hurt OTTs more than Telcos!”

… & create new, better, more disruptive OTT players. Great.

Telco involvement with WebRTC

• AT&T most visible

– Participant in standards, eg proposing push for notifications

– Developer-centric approach

• Telefonica likely a major player

– TokBox acquisition

– Firefox OS advocacy

– TUMe & other TefDig products

• DT & FT at recent events

– FT on W3C WG

– VF & Telecom Italia also on WG

• Anecdotes about China Mobile but no confirmation

– On W3C WebRTC WG list along with China Unicom, Huawei, Baidu, TenCent & China Academy of Sciences

• Also on W3C working group

– SKT (Korea)

– Smart (Philippines)

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Multiple constituencies involved

Telco WebRTC interest

VoLTE & Telco-OTT teams

curious/worried by WebRTC

Enterprise VoIP / UC /

conferencing moving to WebRTC

Ground-up interest in

WebRTC (in labs etc)

Apps, developer & HTML5

initiatives adding WebRTC

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

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Overlapping universes

Telco services

Pure OTT apps

WebRTC

Copyright Disruptive Analysis Ltd. 2012

“Gateway into IMS” Softphones etc

Browser-based Telco-OTT Network & platform APIs

“Easy options” for Telcos+WebRTC

• Charging platform

• Legal requirements

• Notifications

• Numbers / directories

• WiFi access (in theory…)

• Network QoS (in theory…)

• But does any of this really move the needle?

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Some myths to avoid for WebRTC

Quality & QoS

• Impending quali-pocalypse

• Users appear to care less than expected – Some high-Q use cases (eg

sales call)

– Internet vs. non-Internet

• Quality driven by much more than network – Eg Coverage (esp for LTE)

WiFi

• “Seamless connection”

• HetNets

• Mobile carriers are very important or in control

• The user & operator are the only stakeholders

A quick diversion to some pet topics of mine:

Main WebRTC strategies for SPs

Extend on-net services

Turbocharge Telco-OTT

apps

Sell packaged WebRTC

services to subscriber

Enhance developer platform

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Perpetuate legacy models “Put lipstick on a pig” – eg RCS

Improves relevance… but

revenue?

Sell genuine “new stuff” to existing

audience

Lower costs/complexity &

improve reach & “virality”

Also: invest / incubate

Conclusions: WebRTC & SPs

• No definitive answers yet

• Makes the threats worse & the opportunities better – Battle new OTTs or old ones: result is the same

• Extending “reach” for poor services doesn’t help

• SPs need to exploit WebRTC to create or resell

• Avoid the “federation trap”

• Manage diverse internal stakeholders & teams – WebRTC will be pervasive across telco “domains”

• Be nimble

November 27-29, 2012

South San Francisco Conference Center

Thank You

Dean Bubley

Disruptive Analysis

dean.bubley@disruptive-analysis.com

@disruptivedean

Skype: disruptiveanalysis