Customers, addicted to their mobile devices but constrained by weak economies and stagnant income, are looking for the cheapest, simplest deal. That deal is often being offered by internet-based services.
The traditional telecom providers are exploring redefining voice and text as 'data' in order to simply offerings and charge more. They are also employing the usual anti-competitive tactics to make it harder for subscribers to use services that diminish the providers' revenues.
Everyone loves their mobile. And they want it to do more - and more. But they dont want to pay more for the privilege. The providers, meanwhile, want to keep the customers and the profits, but also want to maintain their juicy margins.
Something's gotta give. The best guess is that the restrictive dam is going to break and the providers will be forced to accept lower margins in order to keep the benefits of volume and potential advertising to customers. How that end state is arrived at is not yet clear. Trade-offs are a drag. But so is losing your business. JL
Andreas Bernstrom comments in GigaOm:
As little as 18 months ago, mobile VoIP and IP messaging apps were considered niche by operators. Now we pose the biggest “threat” the industry has even seen. In fact, a Telco 2.0 report suggests that within three years, 40 percent of messaging and 21 percent of voice revenues will vanish due to over the top (OTT) players like Rebtel, Whatsapp and Viber.
For any telecommunication company these are frightening numbers, and they’re reacting to them in the only way they seem to know: by blocking, charging for or throttling competing services that are cannibalizing their revenues.
But this fear is caused by business imbalance that they seem unable (or unwilling) to fix. Look at any European mobile operator, and it’s clear that around 80 percent of their revenues are still attributed to their most traditional — and most eroding — service: voice and data. At the same time, around 80 percent of their investments go into improving the congested infrastructure necessary to support the dramatic growth of third-party data services.
It’s obvious that this situation isn’t going to get any better. According to Håkan Dahlström of TeliaSonera, the current average monthly data spend is roughly 300MB — and it’s expected to reach 3GB by the year 2020. Needless to say, this model is in a state of transition.
So why do operators seem so reluctant to move to a sustainable (and inevitable) data pricing model?
The truth is that even though traditional revenues are eroding, they are still able to produce mind-boggling figures thanks to their staggering margins. And with consumers firmly attached to the notion of unlimited data, there are few — if any — telecoms companies that want to be the first mover. Meanwhile the longer this transition is delayed, the more cashflow operators are bound to generate, which means good news for shareholders and smiles all round.
On the flipside, however, subscribers will have to endure more expensive and more complicated variations of data access packages, with a plethora of potential data cap limits, access add-ons for VoIP and other OTT services. And it is not looking like it will get easier any time soon.
How will operators fight back, then?
Some in the telecom industry are pinning their hopes on RCSE — the Rich Communications Suite. This is, effectively, an industry-wide attempt by major mobile operators to create their own version of Viber and WhatsApp. However, the core feature set of RCSE was defined in February 2008 and the product is still not out the door: anyone who’s followed the development of VoIP in the app stores knows that four years is equivalent to several generations in the mobile world. Can anyone say with certainty that it will ever emerge?
In fact, I’d be surprised if RCSE was able to compete — but as one leading mobile operator VP put it at the recent Open Mobile Summit in London, what else is there?

Operators are being marginalized and put under pressure from all directions. In 2007, they controlled access, address book, billing relationships and services. Today they essentially just control access and billing. The OTT layer now provides services, address book and a digitalized billing relationship that are all far superior to the legacy systems provided by operators.
Adding to all this is the ongoing net neutrality and regulation debate. The EU and its commissioners already have a dim view of operators in light of the endemic blocking and throttling of services: if mobile VoIP is being blocked and discriminated against and the operators roll out their RCS solution, wouldn’t that scenario qualify as seriously anti-competitive behavior.
Regardless of how this issue is twisted and turned, the real solution is that operators need to move faster to a tiered data revenue model; they need to educate customers about data spend; they need to simplify their offerings as much as possible and, last but not least, they need to do their utmost to allow creative developers to build great communications services that add real value to the access they provide.
1 comments:
It is really tough to reduce the cost. But use of business IP phone can reduce the cost as it uses internet which is really cheap in nowadays. It converts the voice to packet data to send receiver end. It has many advantages along with clear communication.
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