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Real-Time Communication Services landscape for Wireless Carriers

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Real-Time Communications Services such as Voice and Text have been the primary source of revenue for Wireless Carriers for many years, but the last few years, voice and text services have taken a major dip in their revenue while competing against Over-The-Top (OTT) player such as Skype, Whatsapp, Viber, etc.

The revenue started shrinking, especially for long distance calls, when OTT players started launching voice and other multi-media services with much better capabilities and well integrated with social media applications. Today, end-users just need basic data services from the wireless carriers to be able to communicate with anyone and anywhere in the world.

One other factor that has significantly commoditized voice/text service is the proliferation of smart phones which has shifted the preference of younger generation to social media and other means of communications. They prefer other types of messaging and social media communications rather than talking to their friends on a phone.

Wireless carriers have already invested a lot of money in IP Multimedia Subsystems (IMS) (which was introduced by 3GPP many years ago to facilitate an integrated IP packet communications services, such as VoIP, instant messaging, presence, and conferencing etc., over wireless and wireline networks) which was supposed to differentiate Real-Time Communication services from the OTTs.

Originally IMS was expected to introduce a unified and converged architecture that would allow simplified and flexible new services introduction for both enterprise and retail customers, but the concept has fallen short so far and it might be a little bit late to materialize. The reason attributing to this is the rise of cloud services offered by non-traditional telecommunications carriers which has made it easy for consumers and enterprises to subscribe to.

The challenge for all wireless carriers is that they can’t just walk away from Real-Time Communications Services such as voice application, which was once their main revenue source. They still have to keep offering voice, probably for free to their consumers as part of their service bundled with other services in order to remain competitive, than just becoming a basic data pipe provider.

Amid all the industry dynamism, the question is “can the wireless carriers sustain a competitive advantage in Real-Time Communications business despite fierce competition from OTTs?”  I believe that wireless carriers can overcome the competition because of the following reasons:

 

  1. Quality of Service (QoS) – One of the critical feature the OTTs may not be able to provide to their end-users is the Quality of Service as they do not own or have control over the telecommunication infrastructure, especially the wireless Access Network. As QoS management is very complex, especially in the wireless network with changing radio conditions during mobility, the OTTs will have challenges in implementing working end-to-end QoS unless they partner with the carriers. This type of dependence will most probably create revenue opportunity for wireless carriers. Carriers can also partner with OTTs to provide QoS as a Service (QoSaaS) on a revenue sharing model. As some of the OTT applications are more advanced than what the carriers have today, the carriers may benefit upon partnering than developing their own applications. By doing this, carriers can reduce their own voice application development cost and at the same time generate more revenues
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  2. Regulatory Requirements – Most OTT application do not comply with regulatory requirement, such as, Emergency Services and Lawful Intercept (for example, E911 and CALEA for the US Market). It is difficult for OTTs to implement emergency services that allow consumer and enterprise subscribers to communicate (with detail location information) with the nearest Public Safety Answering Points (PSAPs) during emergency due to lack of OTT application access to location information on mobile devices. In addition, applying CALEA (as mandated by FCC and FBI, all telecommunication companies must provide lawful intercept mechanisms that enable law enforcement agencies to intercept illegal activities by alleged subscribers) to the OTT has always been a challenge for FCC and law enforcement agencies.  But, since carriers are used to implement and apply these types of regulatory services for decades, they have an edge over OTTs in this area, especially for their enterprise customers.

  3. Wireless Priority Services – when wireless networks get congested in major disaster areas, the network reserves certain communication resources (radio air interface and core resources) to provide priority access to government agencies who perform critical national security and emergency preparedness. Since the wireless carries owns the wireless infrastructure, they can easily provide this type of services to government agencies as a business differentiator.

  4. Legacy features such as local routing and Feature codes – OTT applications don’t support most of the legacy features (for example, local numbers 211, 311, 411, etc. for the US Market). The 411 services are not so much in use due to easy information access through online and smart phones, but 211 and 311 and others are still used widely across the country. In terms of Feature codes, Carriers are better equipped in integrating legacy supplementary service codes that facilitates different types of queries from a device to a network and set certain service parameters (e.g., call forwarding, call on-hold, call waiting, 3-way calling and etc.).

  5. Carries still have a lot of enterprise customers that need Real Time Communications services, which is essential part of enterprise communication services, to conduct their daily business activities.

  6. Call Routing Capabilities – Phone calls destined to PSTN/cellular networks are still routed based on E-164 numbering plan and carriers have built the infrastructure for years and it is mostly under their control.

  7. Mobility - Current wireless networks are complex and contain a mix of 2G, 3G, 4G and small cells. Providing service continuity (call handover between different technologies without call drop) and preserving consistent Voice/Video quality during the call is going to be a key differentiator for wireless carriers. Especially, in HetNet (small-cells in different technologies and sizes) environment, service continuity will become very complex for OTTs and may not be able to provide service continuity.
  8. Wireless data coverage – Some of the OTT applications require wireless data coverage, such as 3G and LTE, but most locations in different countries, including the US still have 2G coverage. Especially in rural areas, 3G/4G data coverage is very poor in many countries.

The conclusion is that generating profitable revenues from Real-Time Communication services, such as voice/video and text, are getting difficult for Wireless Carriers due to fierce competition from OTTs, but the Carriers can use aforementioned areas to sustain a competitive advantage.

Tata Communications Transformation Services (TCTS) provides end-to-end wireless network design, deployment and operations services and understands the complexity of wireless network architecture and knows how to tackle some of the design and deployment challenges. TCTS has a technology and vendor agnostic model when it comes to multi-media services network roll out and has a proven experience in managing partner ecosystems needed to run telecom grade real-time communications services, such as Voice, Video, Text and etc., in an agile and cost effective manner.

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