Wednesday, October 9, 2013

Telco VAS decline, the key role of telco APIs & the coining of a new term W2P

Telco is an industry facing transformation, basic services being cash-cows with high margins as voice and SMS, and lately broadband, are becoming commodities in a fierce competitive market. Most of telco customers are contracting plans with a number of minutes, SMS and data enough for their needs at very low prices.

Value Added Services (VAS) being perceived as the next stream of revenues are not properly implemented by telcos. We could read this week about the VAS revenue declining.

What is happening? Well, too many things at a time:

  • Telco enablers as Voice and SMS for VAS being exploded more successfully by companies creating REST API to use the communications enablers as they are costume to work with social networka and internet tools APIs. Companies as Tropo, Twilio, Plivo make easier to use telco enablers than the own telcos.

  • New communication enablers beyond voice and SMS as rich messaging are being pioneered and led by amazing "over the top" companies as Whatsapp, Line, WeChat (Tencent) harming telcos in 2 ways: commoditizing the enhanced messaging as being offered for free or just for a small annual fee, and capturing new VAS market share (virtual goods, B2C, etc).

  • Service providers (carriers) are not properly adapted to the new times: years to deploy a new technology is not an acceptable period, waiting to the perfect standards with all the features defined is not how now service cycles work. RCS (Rich Communication Services)/joyn had to be deployed years ago and just right now it is taking off slowly.

  • Fortunately telcos realize about the potential of APIs and they are giving steps in the right direction launching developer portals as Telekom Developer Garden, AT&T Developer Program, Telefonica Bluevia and others. They are understanding finally that Parlay is not API for developers, developers needs web APIs (REST, SOAP).  Unfortunately the new communication enablers are not usually launched with API to try to generate non person-to-person communication use case from day 1.

  • It is difficult for the carriers to work at the start-up pace required if they don't learn to work with start-up's and it would mean to use their investing arms to fund interesting companies creating stuff useful for telco transformation, paying fairly for trials...and avoid screwing up innovators :-(

  • Also, incumbent vendors, the so-called NEVs, may also try to cooperate with small vendors with complementary stuff to jointly help telcos to adapt. Obvious? NO, we suffered first hand how NEVs tend to promise to offer "very soon" what small innovative vendors are doing and keep telcos (as they are more customed to work with NEVs) waiting and waiting and wasting time and time is money.

All above is the cocktail that could make telcos irrelevant in the VAS if they can not adapt properly soon, as sooner the better. Which are the keys? Telcos commercialized universal communication enablers, known user experiences that properly combined can be as Lego pieces to create services. APIs are the telco Lego. 

What can be built with that Lego? Whatever thing, communication is not about people only, or between machines only, communications is between people, services as customer care bots, machines, home sensors, etc. Today, the concept of A2P/P2A (application-to-person / person-to-application) coined for VAS using SMS is too small. 

A new term may be coined W2P/P2W (person-to-whatever thing, whatever thing-to-person) and messaging, RCS may be the enabler being the HUB of those type communications, with the benefit of not facing learning curve, chatting is chatting, sending files is sending files.  

Thanks to telco APIs and semantic technologies (a hot topic) telcos may take benefit from the texting trend and become the relevant player making easy to connect the world, not a bit level but at service level: people with customer care bots or agents (B2C communications), people with their home sensors, people with social games & new smart advertisement, people with info services with just the same tool, the same user experience. 
Too, this common user experience thanks to the APIs will be available in all the screens (web, TV), telco should not be only tied to "phone-type" devices.

Long life to the W2P coin!

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