Telco 2.0 News Analysis: 'OTT' Wars, Big Data and other key disruptions

[Ed: This is a special review of the news from the last 6 months in preparation for next week's EMEA Executive Brainstorm, 12-13 June 2012 in London. The review lines up the key stories against the agenda, covering the latest on Telco 2.0 strategies, telcos in the cloud, M-Commerce, and M2M. There's top speakers from Amazon, Google, Barclays, Ofcom and the top EMEA telcos and only a few places left so register here now, call +44 (0) 207 247 5003, or email contact@stlpartners.com for last minute place.]

Telco 2.0 strategies and OTT threats: getting tougher for tech stars


The Facebook IPO: Disappointing. The social event of the season turned into a flop. Wall Street managed to get the IPO away, but the price slumped and the bears are not going away. As a result, serious doubt has been cast on the "free-with-ads" business model and the idea of building a huge user base that will be monetised in some vague manner. Further, users' tolerance for advertising in the social context has been tested, and the users opted for the ad-free mobile version.

Android: Disappointing. Another win for STL - we thought there was very little evidence that it actually brought in any money, and now we know that although Android devices are flooding the world, it's helping the vendors and the operators. Google makes far more money from Apple iOS devices than Android ones.

Free Mobile: Telco 2.0 Hit. Everyone expected Free to do something dramatic when their 3G licence finally arrived. They exploded out of the blocks, thoroughly disrupted the French mobile market, and then did it again by deploying a WLAN offload network overnight through a software patch pushed out to their fixed-line CPE. Key take-aways: communications is valuable, keen pricing is vital, software power wins.

And of course there's the patent wars. It's not clear that operators have a "side" in it, but it's been making the news constantly for months. Google's win over Oracle probably won't mean it calms down. The Strategy agenda and speakers are here.

Digital Consumer/Voice & Messaging: not as clear cut as anyone thought


Voice & SMS Shocks. KPN saw a horrible dive in SMS revenues. Telenor says SMS revenue peaked in 2009 and has been falling ever since. BT Retail was off 1.5bn minutes of use year-on-year and blamed it on the weather.

Vodafone OneNet: Awesome. 2 million users, growing revenues even in Italy where service revenue across the board is falling under the economic crisis. Clear product definition, confident execution, deployment from the cloud = practical Telco 2.0.

Skype for Browsers. Microsoft-Skype was a dog that didn't bark, but they're hiring engineers for "Skype for Browsers", i.e. a Web-based version of Skype. This is an example of a wider trend, voice getting built into HTML5-enabled web applications. See also WebRTC.

Call Centre 2.0. RCSe got its launch, at long last, and our bet is that it's going to be mostly an enterprise, B2C or B2B2C solution, rather like the applications Solaimes demonstrated at our event. Similarly, the Voice 2.0 ecosystem has refocused towards third-party call control and applications.

TV Disappointment. Another year when "Smart TV" was meant to be with us. Perhaps the concept is basically flawed, as STL has repeatedly suggested? The agenda and speakers on Digital Consumers are here.

Customer Experience: of course it matters, but...


Google: Disappointment. Google + may have exploded out of the starting blocks, but it rapidly bogged down without getting beyond the early adopter scene. And Google's efforts to integrate the social networking content into their search product were widely seen as crufty, spammy, and generally disappointing.

Design. It now seems to be obvious that service and user experience design are core skills for everyone. But have telcos figured out what this means in voice and messaging in time? The agenda and speakers on Customer Experience are here.

Network-as-a-Service/APIs: signs of progress


Telefonica Digital. A whole operator division devoted to building things around their APIs - but note they had to trim back some of the features of BlueVia.

Software power at the edge. Free Mobile's overnight move to turn their Freeboxes into offload WiFi access points is a case in point. So is the move towards small cells and Intel's smart cell concept, which makes it much more possible to integrate CDN, PBX, and location-based service applications into the network.

Software-defined networking. It's the latest tech buzzword! More seriously, DTAG is planning to re-engineer its networks around the OpenFlow standard. This potentially promises much greater flexibility and more use of relatively cheap IT hardware.

API power. It's been estimated that a good API can increase traffic through your Web site by 70%. Similarly, something like 90% of external traffic to Netflix comes from connected devices (consoles, tablets, set-top boxes, DVD players etc) talking to its API.

Verizon FiOS to 300Mbps. They spent the money and laid the fibre, now they're reaping the rewards. The agenda and speakers on Network 2.0 are here.

M-Commerce (wallets, payments, advertising): is it time now, again?


Google Wallet: Disappointment. Getting to be a bit of a theme - Google's strategic identity crisis is clearly a thing. But their effort has failed to carry the operators, or the banks, or the merchants with it, and therefore won't get the users either.


UK Joint Venture. At the moment, the problem appears to be 3UK being left out and moaning about it to the regulator, to say nothing of Google. But the real problem, as with many payment schemes, is finding a use case that might get the public to use it and some compelling devices. It's worth remembering that 6 out of the 8 projects in the GSMA's "fast growth" group are in East Africa.

Advertising is Hard. Facebook's advertising performance was a disappointment, and so was Apple's with iAds. Interestingly, both went with a traditional, "big brands, big accounts, personal touch" strategy rather than Google's "long tail, measure everything, web signup". We will see how Freespee's click-to-call AdSense clone goes, but there are some reasons to think click-to-call might work here. Agenda and speakers on M-Commerce are here.

Cloud: round 2, coming up


OpenStack is coming. The IT industry's effort to kick back at Microsoft Azure, Amazon Web Services EC2, Salesforce, and Google is with us. Will it open up new opportunities for telcos?

Abandon purity. It was the quarter when the Web realised that "the cloud isn't cheap". Every hit startup eventually seems to need its own data centre. As a result, it's increasingly important to have a balanced strategy between public cloud, private cloud, and on-premises.

Cloud meets CDN. Akamai, and Ericsson's CDN products, are both gearing up to integrate with cloud systems and bring the applications running in them much closer to the user.

Where is Facebook Web Services? One thing Facebook does well, even if their UX design and ad sales leave something to be desired, is engineering. They've created a massive internal cloud infrastructure - how long before they start offering cloud services?

2 of the 5 biggest construction sites in the USA are data centres.

Key Skill: Architecture. Designing big cloud systems, and systems that run in the cloud, is a key skill for the future. Agenda and speakers on Cloud are here.

Big Data: big yes, but not easy


Target Miss. US retailer Target gave us a preview of the downside of big data - they developed an algorithm to guess which customers were pregnant and advertise to them. Unfortunately, somebody's dad found out first from a Target mailshot. Oh dear. Fix: add randomly generated items to the mailshot to disguise the creepy prescience.

Amazon CloudSearch. Need to index and search a ton of data? Now you can use Amazon's A9 search engine. For a price. Agenda and speakers here.

Personal Data: an epic struggle


WEF Personal Data Initiative: Progress.... On the bright side, we saw good progress on the World Economic Forum (WEF) initiative to get the personal data economy working the right way - fair to customers and still providing opportunities for businesses. The WEF published this report on 'strengthening trust'.


Phone Hackers. On the dark side, Piers Morgan thanked the poor security of a certain UK mobile phone operator for an award he got. This may send him to jail. Anyway, this all encompassing political earthquake is the clearest possible demonstration of the vital importance of security. Especially if they get round to auditing the lawful intercept logs.

Groupon Data Deal. Groupon is yet another Silicon Valley star that's taken a nasty fall since last time, to go with Facebook and Google. But it's telling that this was a company that was buying others just for their data.

CarrierIQ. Whoops! It was discovered that this software, which is used to collect metrics on users' experience of smartphones, stores masses of personal data in the clear as a file that any application can access. Not good.

Agenda and speakers here.

M2M: getting real but how to make money?


Vodafone, China Mobile, DTAG... Machina Research thought Vodafone was the best M2M operator in the world, ahead of Deutsche Telekom. China Mobile, though, wants to be the biggest and is growing dramatically. It's a battle between VF and DTAG for quality and VF and China Mobile for volume.

$3 ARPUs. M2M ARPU is turning out to be fabulously low, and more than expected is going into software and service enablement. Monthly ARPU of $5 was thought to be astonishingly low in the context of emerging market GSM operators, but now $3 is the new $5.

M-Health: Threat or Menace? It sounds great - 5% of the patients are 50% of the spending. But people who've tried it say they're also 90% of the complexity, cost, and risk. Just when you think there's easy money to be made, BAM, up comes reality... M2M agenda and speakers here.


Join us if you can at next week's EMEA Executive Brainstorm, 12-13 June 2012 in London. Full agenda here, speakers here - register here now, call +44 (0) 207 247 5003, or email contact@stlpartners.com for last minute place.