Voice 2.0 is Coming!

Ed. - To warm us up for the forthcoming Telco 2.0 Exec Brainstorms on new business models (next week in London and 9-10 Dec in Orlando, Florida), Telco 2.0 is blogging from eComm this week. This is probably the best event series on strategic technology developments, and we're delighted to partner with it. Below are some highlights so far. NB: Google Wave users can follow the conference backchannel by searching "tag:eComm with:public"; presentations will be posted to the individual session waves in due course.

eComm is, of course, a good listening post for monitoring the progress of Voice 2.0. The news is that once you get out here to the cutting edge, it's already taken as given that voice is an application and that value will be created in future by integrating it with other processes, applications, and services.

So Voxeo demonstrated their new Tropo.com cloud telephony platform; this provides an API for scripting-language developers to use in creating applications that use voice, based on Voxeo's existing VoiceXML hosting infrastructure and interconnection. It's impressively simple, and leaves you wondering what the telcos have been doing all these years.

Paul Sweeney of Voicesage called attention to an interesting and possibly valuable adjacent business model for CEBP. Namely, creating the CEBP APIs involves creating a wide variety of new "edges" at which the enterprise interacts with its customers, suppliers, employees, and other stakeholders in general. The concept of these "edges" was first popularised by John Hagel; essentially, he argues that value is created by the interaction of diverse actors at the points where they meet.

Making your business processes discrete, explicit, real-time, and measured, as CEBP demands, also means creating as a by-product lots of data about how your business actually works, rather than how it should work, how it was meant to work, or how people in it want to think it works. This makes it possible to use CEBP as a powerful management-information systems tool, and perhaps also to decentralise the design of front-line services.

Sten Tamviki, Skype's Chief Evangelist, provided some interesting data on how a virtual telco whose revenue source is PSTN interconnection can actually make money. Over a year, retail voice prices fell by 7%, wholesale interconnect prices fell by 12%; but Skype's volumes rose by 13%. Essentially, the volume free Skype-to-Skype calls pull in permits Skype to extract some of the best prices for bulk interconnection on its key routes, and therefore to keep its prices low whilst still maintaining a useful margin.

What are those routes? Increasingly, the main traffic routes parallel the main world migration routes; US-Mexico is one of the biggest. Obviously, interconnection is doubly important here as the availability of computers and Internet bandwidth is dramatically unequal. Skype's markets exhibit a cross-over point in terms of per capita income at which the traffic types suddenly reverse; below the crossover, voice, instant messaging, and interconnect voice dominate. Above it, video calls take over; Skype can be both a premium application and a hard discounter depending on context.

So, if their biggest traffic routes are like that, why isn't Skype the best alternative banking/money transfer player going? Shouldn't there be an eFinance conference as well, as someone asked Lee Dryburgh? The answer is simple and slightly depressing; the Skype team have enough trouble avoiding being regulated as a telco, without risking being treated as a bank as well. It's a familiar problem in m-banking, which is why we advise that you find a bank and brainwash it into joining in.

Rudolf van der Berg was back with a provocative presentation on how (in his view) the termination regime must go in order to make either free voice, or better voice, possible. He argues that an analogous model to the Internet's tradition of peering and transit is better; voice operators wouldn't be obliged to interconnect, but they would be required to make all the numbers in the national numbering plan available. Therefore, operators would make their own decisions on whether to peer or to buy wholesale transit, and the prices of voice and data would converge.

It wouldn't matter whether a bit was a bit of voice or of an HTTPS e-commerce transaction; and therefore, it wouldn't matter whether a bit was a bit of telco voice or third-party voice, theoretically opening the way to a much more diverse voice market. Interestingly, this inter-relates with Dean Bubley's presentation on the problems of LTE voice standardisation; one option is just to forget it and do VoIP over the data channel. Van der Berg's proposal would certainly help with that.