 | Issue: | North America II 2015 |
| Article no.: | 5 | |
| Topic: | Carrier strategies: Growth by fostering innovation | |
| Author: | Arvind Rangarajan | |
| Title: | Director Product Marketing | |
| Organisation: | BroadSoft | |
| PDF size: | 224KB |
About author
Arvind Rangarajan is Director, Product Marketing at BroadSoft. Arvind has over 19 years of experience in the telecommunications industry in various roles that include Software Development, Product Management and Product Marketing, applied across Wireless, Unified Communications and in Cloud based communications.
Prior to joining BroadSoft, Arvind led product marketing efforts for ShoreTel SKY, a Cloud Based UCaaS solution. He has held several Senior Product Management and Product Marketing roles with Cisco Systems and Philips Electronics, as well as Software Development positions for Nortel Networks and Ericsson. Arvind holds a Master’s degree in Computer Engineering from UT Arlington, Texas and also an MBA degree from University of Dallas and a BE degree in Electrical and Electronics Engineering from India.
Article abstract
Challenges are hitting telecom carriers across several fronts. Revenue from traditional services like voice and messaging is declining. While more and more devices are getting added to the ecosystem, it does not necessarily mean that all of them will automatically convert to revenue streams for telecom providers. Telecom carriers have traditionally innovated in conjunction with GSM/ITU standards bodies that came up with IMS, RCS, and other initiatives. This worked when their business models were stable, but today these models are under massive pressure from regulators and the arrival of new set of players developing applications that run over the top of mobile networks and siphon customer minutes from the traditional telecom providers.
Full Article
Current trends with mobile devices
Mobile technology is going through a major transformation phase. The arrival of powerful smart mobile devices at affordable prices has fueled the increase of mobile users around the globe, and IDC predicts smartphone and tablet spending will hit US$484 billion this year. Mobile access speeds have increased significantly over the years and with faster processors, changing the dynamic of service innovation. The launch of 4G networks is ensuring the availability of bandwidth necessary for delivering advanced services on mobile devices. On the consumer side, millennials are leading the charge by going mobile only and abandoning fixed line. On the business side, BYOD is helping to accelerate mobile adoption by the workforce. Around the globe, enterprises are positioning mobile front and center in their overall IT strategy, and in some cases, it’s a mobile-only approach.
Mobile growth is further fueled by the emergence of wearables and Internet of Things (IoT) technology that allow users, devices and data to be connected in ways not previously possible. By 2020, 5G networks will address even higher data requirements while tackling other issues like concentration of traffic in locations like business parks and consumer hubs. 5G networks will also be tackling the communication between machine to machine and person to machines as part of the Internet of Things. But all of the opportunities surrounding mobile comes with a stark reality for telecom providers: the need to innovate or perish in the face of intense and growing competition on all fronts.
Telecom challenges
Challenges are hitting telecom carriers across several fronts. Revenue from traditional services like voice and messaging is declining. While more and more devices are getting added to the ecosystem, it does not necessarily mean that all of them will automatically convert to revenue streams for telecom providers. Telecom carriers have traditionally innovated in conjunction with GSM/ITU standards bodies that came up with IMS, RCS, and other initiatives. This worked when their business models were stable, but today these models are under massive pressure from regulators and the arrival of new set of players developing applications that run over the top of mobile networks and siphon customer minutes from the traditional telecom providers. These over-the-top (OTT) applications are easy to use and provide a quick way for subscribers to consume services that are similar or an alternative to traditional services provided by operators. At the same time OTT services can be deployed in three to six months, a far more accelerated timeline than traditional telecom time-to-market models.
Telecom carriers are also facing churn in this volatile market, a development that has led one major carrier to offer no-contract options. Apart from the traditional telecommunications needs like user experience and coverage issues, there are also several new use cases for mobile operators to grow revenues and their customer base. With the exception of IMS, which is buried deep in the core, innovation has, in areas, been superseded by OTT players like Viber, SFB and device plays like Apple’s WiFi calling. This article will cover some key innovation areas ripe for opportunity that carriers should consider.
User experience
The future of unified communications (voice, video, instant messaging and presence, web collaboration, etc.) rests squarely on delivering a superior user experience. This experience is even more critical with mobile, as users will be accessing applications and services from a broad range of devices, screen sizes and form factors. Given that IDC projected 37% of the global workforce to be mobile in 2015, carriers should develop solutions that tightly integrate with the device vendors to provide a better native user experience. The other big requirement is for carriers to ensure the user experience is the same across different platforms. These enhancements and innovation could be to the look and feel as well as the ease of use and quality of service.
Verticals
Service providers must move past the ‘one-size-fits-all’ approach to delivering mobile services to business customers. Each market segment has unique communications and collaboration requirements, and by delivering personalized services to each segment (micro-business, mid-market, large enterprise), verticals (hospitality, education, government, retail, healthcare), and devices (smartphones, tablets, desktops, etc.), service providers can accelerate mobile and UC adoption. There are several vertical specific telecom use cases that can be delivered today with the use of advanced technology and some development and innovation.
Internet of Everything (IOE)
One of the biggest trends within the technology space in this decade is the concept of Internet of Everything (IoE). This defines a state in which almost everything that is around us is connected to the Internet – and that data collected from these sensors and end points can be integrated and leveraged for an enhanced user experience. It could be the refrigerator at home, the cars we drive or the parking meters installed on the roads. These devices are not only communicating to the Internet but also with one another. To capitalize on the IoE opportunity, carriers must innovate not only at the device and application level, but also the pricing level. IoE impacts usage and rates very differently, and carriers must think outside-the-box on how to secure IoE revenues without blowing up user speed and bandwidth requirements.
Big Data and Analytics
With the high demand for mobile data, carriers now have the ability to tap into valuable subscriber information that can be used to create additional value for their customer base. Carriers must continue to leverage data analytics to gain a better handle on when and how users consume services in order to reduce churn and create ‘stickier’ customers. Use of data analytics can range from targeted advertising based on demographics and the location of the customer to drilling into analytics to better understand network performance and customer device usage habits.
WiFi channel usage
Almost every smartphone that is manufactured today is Wi-Fi enabled. Because of this trend, carriers have access to huge advantages over OTT providers. Not only do many OTTs struggle to maintain call connection when the user moves from Wi-Fi to cellular, but they often require the user to download a separate app, use a separate dialer interface, and make the call using a different phone number.
True “next-generation” Wi-Fi calling consists of a totally seamless user experience, where users can keep their existing phone number, use the native dialing capability on the device of their choice, and move between Wi-Fi and cellular networks without any interruption to the call. The ability to provide carrier-grade Wi-Fi that includes assured quality of service is also becoming a reality with new standards, spectrum options and better devices. These capabilities can help provide differentiation in a heavily competitive segment.
For carriers, another important benefit of WiFi is the ability to provide uninterrupted service in areas where there are coverage issues. Statistics show that macro spectrum with high frequencies has poor in-building coverage. This results in dropped calls and low customer satisfaction, and ultimately results in customer churn. Moreover, carriers can leverage their VoLTE IMS investments to build out the VoWiFi capability in their networks. Typically VoWiFi-based solutions are less expensive compared to other solutions based on femtocell, etc.
WebRTC and network transformation
WebRTC technology is the latest innovation disrupting traditional communication services. As enterprises utilize WebRTC for real-time, browser-based voice and video calling capabilities such as click-to-call, the next phase on the horizon will be the use of WebRTC to extend real-time unified communications beyond the confines of the enterprise – to any customer, partner or supplier with a WebRTC-enabled browser. Carriers are in prime position to enable WebRTC and, among other things, enable mobile devices to be used by enterprise end users for collaboration sessions with external vendors and partners. Carriers can also innovate using WebRTC technology to create new client applications that can integrate with traditional telephony to provide a seamless calling experience. A handful of carriers are already setting up innovation arms to engage with the developer community to develop the APIs and build new applications for WebRTC, an encouraging early step as the protocol gains traction.
Innovation strategy for carriers
Despite market challenges, telecom providers should be enthusiastic about the opportunities around mobile in 2015 and beyond. Carriers can continue with the ITU approach or move to a rapid innovation model that is more OTT oriented. This change is happening in the fixed world where OTT for cloud is the common delivery model. For traditional carriers, in order accelerate innovation they can embrace OTT and make use of an OEM cloud. Alternatively, carriers can open up the telco network as a super Platform as a Service (PaaS) so 3rd parties can innovate on it or utilize disruptive technologies like WebRTC to put advanced services directly into the user experience. Whichever path they choose, carriers must set an aggressive pace of innovation by focusing on areas that will have the most immediate and significant revenue and customer impact.
While user experience, vertical market opportunities, data analytics, IoT, WiFi and WebRTC present ripe opportunities, it all comes down to mobile. By 2020, nearly 50% of the U.S. workforce will be comprised of millennials, according to the U.S. Bureau of Labor Statistics. This always-on, always-connected generation is bringing its dynamic and diverse communications expectations to the office – which means that carriers must innovate in a way that enables, rather than stifles, the BYOD workforce.
