|Issue:||North America II 2014|
|Topic:||WebRTC – The opportunity for carriers|
|Title:||Business Development Director|
John Parr, Business Development Director, Acision
John has 20+ years’ experience in the telecoms industry, having worked for British Telecom and leading vendors in a variety of roles including software development, product management, sales management and business development. John’s product experience encompasses switching, Intelligent Networks and Value Added Services. Prior to joining Acision he was Co-Founder and Managing Director of Crocodile RCS Ltd, a pioneer of WebRTC.
John Parr, Business Development Director at Acision, discusses the opportunities being delivered by WebRTC
As the buzz around WebRTC continues to grow and analysts predict it will ‘revolutionize’ communications, it is now imperative for carriers to understand what WebRTC is all about and to develop appropriate strategies towards it.
We believe that WebRTC presents a great opportunity, but it also raises some pretty fundamental questions about the kind of services carriers will provide in the future and the networks they will be delivered over. In this article I draw on our management’s expertize in WebRTC technology and heritage in messaging to explain the opportunities as we see them. Our approach can be summarized as recognizing and playing to the strengths of both traditional and OTT (over-the-top) networks while avoiding the creation of a hybrid network that is the worst of both worlds.
The promise of WebRTC is clear. It is intended to unleash creativity and usher in a new era of ‘democratized’ communications in which application developers take the fore. It allows developers to use an existing and ‘free’ network, the internet, and provides the highest security and quality of service – so feedback and monitoring are optimized to ensure low usage of bandwidth. It makes video as easy as audio. It is fully integrated within the application. Lastly, it’s provided by an API.
This idea of a ‘Network API’ will sound very familiar to anyone working in the telecoms industry over the past ten years. It’s been tried in various guises during that time, from OSA/Parlay, through Parlay-X, OneAPI and more recently, the RCS API. None of these has been overtly successful, so what’s different about WebRTC?
First, the scope is very different – WebRTC is much more precise and low-level, limiting itself to the set-up and management of the media path, between endpoints in an IP network. The endpoints can be web applications using APIs provided by the browser or native mobile applications, using WebRTC libraries to providing compatible functionality.
What the WebRTC standard doesn’t provide is signaling, which is left to the application. The rationale being that different applications may prefer to use different protocols such as SIP or something new, or even be customized to a particular application, perhaps for a novel use case.
Now although some developers are happy to use this freedom to invent something new, in practice most aren’t interested in implementing their own signaling – they would much rather just use a third party API.
So who will provide this API? We, along with several other players have launched APIs to complement WebRTC, and can provide rich and real-time communications capability for developers. Our individual proposition is to offer the API not only as a cloud service but also as a complete private cloud network installation under the operator’s full control. This is important if the operator has specific security requirements, for instance because of regulation in their particular market. .
But before we think about how the API will be used let’s consider some key trends for the current ‘big 3’ carrier services – messaging, voice and video, and then see how WebRTC can be used as part of a strategy for them going forward.
Firstly messaging – SMS was the first big messaging service and we as a business played a pivotal role in its development. Remarkably, today around 40% of all text messages sent worldwide passes through SMSCs provided by us. Juniper Research’s recent Mobile Messaging Markets report agreed with other recent analysts’ research that overall SMS traffic will continue to grow beyond 2018, in terms of both volume and revenue. But that headline hides big differences in the revenue make up – A2P SMS revenue will grow fast as enterprises increasingly use it as a channel to engage with customers, relying on the ubiquitous delivery capability of SMS – whereas P2P SMS revenue is plateauing and in some regions in decline due to increasing competition from OTT players.
In the meantime, as we all know, OTT messaging and communications has grown rapidly, such that OTT messages now outnumber SMS messages by a ratio of 3:1, despite only generating 2% of the revenue. WhatsApp was one of the first and the most successful OTTs – being ubiquitous (linked to the mobile phone number and available across a wide variety of devices) and “free”. However, we’ve seen other players appear too of course, such as Line and of course our own OTT service fuseMe. We’ve also seen the emergence of new monetization models, based on games, stickers, emojis and in-app shopping. But all these services are ‘closed’ communities (in that you have to download the app). We see that for most people social messaging OTT is the now the first choice and that SMS is used for business or if the recipient is not reachable that way.
So here we can see both an opportunity and a threat for operators. For A2P the threat is that OTT players will muscle in and steal that A2P traffic. But that’s also a big opportunity – by providing both SMS and OTT message delivery operators can make the A2P market their own. For P2P it’s all about reducing costs, exploiting the service and maximizing paid traffic. Judicious investment in network efficiency and cost saving technologies like NFV will help with the former and new services like our ‘Collect SMS’ with the latter.
When we look at trends for voice services a similar pattern emerges – overall volumes are steady, but revenue is declining. P2P calling is declining fast – people now use the phone much less for social interaction with their friends – this has moved over to social media and OTT messaging. Long distance and international P2P has lost out hugely to OTT VoIP and to Skype in particular. A2P has increased, especially cold calling. Value Added Services such as Freephone have plateaued. The good news for operators is that OTT P2P voice has not taken off to the same extent as messaging. Although VoIP operators cream off a proportion, the calls are still mainly delivered via the telephone network leaving termination revenues in place.
This leads to the next big opportunity for carriers – so-called ‘carrier OTT’. According to Juniper Research “mobile network operators will generate revenues of close to $20 billion through strategies involving internet based voice. These Internet voice revenues will be derived from new service propositions and bundles delivered through partnerships with stand-alone OTT service providers”. A typical example is O2’s TuGo app, which allows their subscribers to make and receive calls and texts over WiFi. To address this kind of opportunity, our new, white-label, smart sharing app fuseMe was developed to provide secure and reliable voice and messaging, over and above other OTT apps, while also incorporating a range of unique features which can be monetized such channels and games.
Finally, video. The hope is that video will escape from the current confines of videoconferencing and Skype to become much more ubiquitous. However it’s not likely that P2P video will become ‘the new voice’. Mobile devices are not very suited for sending video of the caller. However we know that ‘see-what-I-see’ is considered useful and there’s no doubt customer service, health consultation, distance learning, technical and product support and so on will benefit hugely from the ability to share video.
Video does have significantly higher costs even when delivered via OTT- particularly HD video. Consumers will likely be unwilling to pay for video in simple social calls. However in the Enterprise environment things are different – if the video helps to clinch a sale or shorten the time a call center agent spends on a call then they will be willing to pay.
So what does all this mean for network strategy? Are VoLTE and WebRTC complementary or competing? There are basically two approaches carriers could take: to try to integrate WebRTC with existing networks, which really means IMS and VoLTE, or to keep them separate.
Analysts agree that the number of LTE subscriptions globally will be around two billion by 2019, accounting for 20 – 25 percent of mobile broadband subscriptions. And pretty much all of these devices will be smartphones
In our opinion, WebRTC and IMS technology and standards should not be mixed. For one thing, although the rollout of IMS is accelerating, 75% of mobile users will not be using IMS, even by 2019. By that time OTT networks using WebRTC will have evolved far out of sight.
This should not be taken as saying that IMS is a waste of time – far from it. IMS has a very useful part to play in managing and optimizing the network at lower levels for policy control and efficient utilization of bandwidth.
We think a pragmatic approach is to provide basic interworking for audio calls using SIP trunks, which can be done cheaply and quickly, but not to try any complex integration of WebRTC with IMS.
Much better to focus on developing innovative applications making full use of what WebRTC brings and based on an OTT network which is much more capable, efficient and cost-effective than a heavy-duty IMS core. This efficiency will be even more important with the anticipated M2M explosion as the Internet of Things becomes a reality.
One early win for operators wishing to get started with WebRTC is the WebRTC-enabled enterprise contact center. Operators currently providing Freephone services are well placed to offer click-2-call audio and video access from consumer apps and corporate websites to extend existing enterprise services. Skills-based routing, time-of-day routing etc. can equally be used for WebRTC calls to make a complete cloud call center solution.
In conclusion, we, as a business, are championing a 2-track approach for operators, suggesting they position themselves as communication leaders by offering innovative new services based on WebRTC while simultaneously maximizing returns from existing networks and services.
To fully grasp the WebRTC opportunity, carriers need to offer innovative communication solutions for consumers and vertical enterprise segments based on their own OTT networks. This will require partnership with application developers and systems integrators with specific segment knowledge and with external companies having OTT network technology expertise such as ours. An incremental approach by slowly adding aspects of WebRTC to existing networks is unlikely to succeed.