Introduction to

Telco-OTT (over the top) Services

dean.bubley@disruptive-analysis.com mail@martingeddes.com

2012 Disruptive Analysis Ltd and Martin Geddes Consulting Ltd

Telco World
Service-centric
Telco-controlled devices Telco-owned access Telco-created services Network roaming

OTT World
Experience-centric
Any combination of device, access and service* Experience roaming

* Supported within any one ecosystem

This is the familiar world of telecoms service providers

and this is the world they see encroaching on their territory

The telecoms world today

Interconnected call & SMS A-B

IMPORTED IPTV, WEB CONTENT

IMPORTED CLOUD APPS

Telco A

Telco B

Interconnected/federated services make up the bulk of telecoms profits

Telco C
EXPORTED CONTENT DELIVERY
On-net call / SMS C-C

EXPORTED BULK SMS

The traditional vision of future IP/4G telecom

Interconnected VoLTE & RCS A-B

IMPORTED HDTV, SOCIAL TV

IMPORTED M2M SERVICES

Telco A

Telco B

More of the same has been the main strategy response to OTT

Telco C
EXPORTED QoS DELIVERY
On-net VoLTE / RCS C-C

EXPORTED RICH APIs

Sessions
Regulated

Subscription based

Service bundling
Converged Services

Minutes & messages

Customer loyalty & churn

Telco World
Phonebook -centric
This response is based on unspoken assumptions as to what really matters

Ubiquity & Interconnect

Problem:
What worked in the past

wont work in the future

Because in parallel.
Consumer Comms Enterprise Comms & BYOD Contextual change

Telcos keep pursuing a convergence approach when divergence rules

Multiplicity of services + Multiplicity of devices + Multiplicity of networks + Multiplicity of ecosystems + Multiplicity of interactions

Federated telecom services

and telcos rely on ubiquity but they cant even deliver that any more

(lowest common denominator)

Device diversity means OTT models inevitable

Probability of all of a users Internet devices being on a single telcos network 100%
Free 3rd party WiFi

On-Net
WiFi roaming & Next-Generation Hotspot Telco QoS (?)

80%

60%
40% 20% 0% 1 2 3 4 5 6
# connected devices owned

Off-Net
More devices (and rising) More (free) WiFi & 3rd party connections More places of use Roaming & federation scaling issues Slow uptake of triple/quadplay

The math of a multi-device world works against the federated telco model

Service
e.g. Telephony
Meanwhile, the Web is turning telco services into browser capabilities

Product
e.g. Skype

Feature
e.g. Xbox Live

Function

Unsustainable number of local service creators

Operators need to compete at a service level

NOW!
So its time for a change of strategy Viral uptake of apps Clever adaptive software makes OTT work better

Going from scarcity to abundance in apps

Changing user behaviour (apps are cool, not geeky)

Collaboration is too slow, bureaucratic & non-creative

Smartphone & tablet penetration rocketing

No more youll eat what youre given

Good-enough fixed & mobile networks

$1tn question How can telcos meet the OTT services challenge?
(deep breath)

Answer:
If you cant beat them

join them
(phew!)

Telco World
Service-centric
Telco device Telco access Telco service Network roaming

Telco-OTT World
Product-centric
Mixture of telco and 3rd party devices, access and services

OTT World
Experience-centric
Any combination of device, access and service* Experience roaming

?
Bring the best of both worlds together
* Supported within any one ecosystem

Telco World
Service-centric
Telco device Telco access Telco service Network roaming

Telco-OTT World
Product-centric
Mixture of telco and 3rd party devices, access and services

OTT World
Experience-centric
Any combination of device, access and service Experience roaming

Comms

Connec -tivity

?
There are four Telco-OTT segments already with many products & services

Content

Cloud

How?
Build businesses that

use OTT strategies

Operators must offer OTT extension services

Operator A is at a competitive disadvantage
Telco A
C-IPTV app on 3G (A gets data charges)

Telco B
Interconnected call C-B On-net rich IP call & UC C-C

A Prisoners Dilemma effect forces losers to carry cost, but no revenue

Telco C
Telco-OTT disrupts call & SMS origination and termination regimes
Telco Cs domain OTT extension

Logical end-point? Full Telco-OTT services

Telco Cs OTT apps

Telco A

Telco B

We are seeing a free-for-all to retain the user & billing relationship

Telco C
On-net QoSoptimised call C-C

OTT is a trade-off for users

More choice of applications Wider distribution for applications Lower cost of usage (Sometimes) better performance at low network load

Demand
Make the trade-off to give users a broader reach of richer services

Performance is - more variable, and - worse at high network load

OTT is a trade-off for telcos

New markets & new customers Extend value of existing services & retain customers Remain relevant beyond transmission

Supply
Accept that your business strategy needs to change to achieve this

Direct competition with Internet-OTT players & cult of free Lack of control can damage brand if experience is poor Stresses organisation and exceeds core competence

Create value propositions that address both telco and OTT characteristics

Telco-style services

Familiar
Transmission Storage Mobility Usability

Functionality
Reach Tailored Coolness
Delivery Universality Ubiquity Governance Urgency

OTT-style services

Convenient Rentable

Preinstalled
Simple

Relevance

Availability

Exclusivity

Accountability

Personalised

Dependable

Affinity

Example: Peer-to-peer messaging

Telco-style services

Adopt a design rather than engineering culture in solving user needs

OTT-style services

Engineer!

Design!

Perceived value Acceptable

Pick use cases which are less sensitive to variable or poorer performance

Mobile VoIP

Mobile telephony
Application performance (speed, BEST accuracy, CASE responsiveness, continuity) Worse worst case Better best case

Unacceptable

WORST CASE

Other characteristics may be equally or more important than the network

DEVICE
Screen size Battery life

DISTRIBUTION
Pre-installation Apps store promotion
Understand & mitigate all the bottlenecks to QoE and value-in-use

REGULATION

CONTENT RIGHTS
DRM License agreements

Legality (e.g. intercept) Numbering

What next?
Join in

everyones at it!

Comms

Connec -tivity

Over 100 identified Telco-OTT products in the market.

Content

Cloud

Operator strategies & positioning vary widely

Key partnerships, customisation, co-branding

Full details in report from Disruptive Analysis (click for information)

Tactical Internet-OTT enthusiasm collaboration

Hostility Skeptical Tactical / niche Strategic focus

Telco-OTT enthusiasm
Source: Disruptive Analysis Telco-OTT Strategies report

Free resources
Dean Bubley
Founder & Director, Disruptive Analysis Ltd

@disruptivedean Blog: disruptivewireless.blogspot.com Martin Geddes

Founder, Martin Geddes Consulting Ltd

@martingeddes Newsletter: www.futureofcomms.com

Premium resources
Click for full details of Telco-OTT Strategies & Case Studies report Click to join free Future of Communications list and be notified of future events

Click for details of Premium Twitter feeds

Public and private workshops on Telco-OTT services

@DAPremium
@GeddesPlus

Next public workshops: US East Coast, Summer 2012

To be first to know when & where, sign up for the newsletter at www.futureofcomms.com

www.disruptive-analysis.com & www.martingeddes.com

Thank you.