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Voice and Messaging 2.0 - HYPOTHESIS

To help structure our thoughts on Voice & Messaging 2.0 (“Telephony & SMS meet Skype and Yahoo”) - for the workshops we do with clients, for the research we do on the topic, for this blog, and in preparation for the Telco 2.0 Industry Brainstorm where there’s a major breakout focusing on this - we’ve put together a ‘Hypothesis’, an ingoing point of view to stimulate debate.

The ‘hypothesis’ looks at: Situation, Complication, Question, Answer. We’d be very interested in your thoughts.

VOICE & MESSAGING 2.0 - how to make more money out of core comms services

1.) Situation:

• Erosion of user-to-user voice revenue: marginal price of zero on landline, rapid drops on wireless as bucket sizes grow.
• New entrants: fixed into mobile; mobile into fixed; new competitors (traditionally structured as well as novel).
• Regulatory pressure on mobile termination and roaming rates.
SMS margins healthy, but market saturating.
• Large, generally unmonetised VoIP and IM traffic from Internet providers.
• Growth areas in premium/non-geographic/personal numbers; and premium/shortcode SMS.

2.) Complication

- Almost all voice and messaging services are relatively undifferentiated against each other.
- Internet IM systems ultimately threatens bulk of SMS revenue, with an expectation of “free”.

3.) Questions (in the mind of operators today)

- Are there revenue and cost optimisations for the legacy products that we’ve missed?
- What should we do to differentiate our existing voice and messaging services from each other and new competitors?
- What new voice and messaging products should we be creating and selling?

4.) Answer (our suggestion re the problem, based on analysis in the Telco 2.0 Report)

1. Treat mobile and fixed handsets as your leading retail channel. Sell more calls and messages by increasing service intelligence and customer intimacy.
2. Every part of the telephony experience offers room for improvement, from discovery/directory to rendezvous, the talk itself, and managing the feedback of the CDR data into the experience.
3. Stop looking for the golden idea and partner with small and large innovators: think “i-mode for voice and messaging, not web”.

5.) Details of the solution (high level for now)

1. Look at how the up-sell is done from SMS to voice and MMS. Where is the ‘call to action’? Where is the ‘one click’ to the most likely recipient? How can calendars, photos and music playing be used to stimulate more usage? How can landline CPE be used to create stickiness and sales?
2. Focus on privacy feature; presence features (in the wider sense of sharing experiences in real time); improved audiovisual experience; better handling of dropped calls; better voicemail interfaces. C2B/B2C interactions are a particular area of opportunity - “next-generation freephone” services.
3. Partner with the emerging service providers and open up your promotion, retail, support, portal and billing to let these new entrants deliver value through your business

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