Several weeks ago I gave a preview on new extensive collaborative research from Alcatel-Lucent (ALU) and research-based consultancy, Penn Schoen Berland, and the seven recommendations for mobile operators on opportunites to grow their business going forward. The first two were released in early September. To say that there has been significant anticipation in additional insights from the next few might be a bit of an understatement. The good news is that the third, fourth and fifth opportunities are out, and like their predecessors they are illuminating.
Opportunity #3: Messaging: What Is a Service Provider To Do?
The short and simple analysis of opportunity #3 lies in market realities. While SMS-based text messages for which mobile operators get revenue are around 20 billion daily, the usage of SMS has been declining for several years in the face of “free” instant messaging apps offered by OTTs such as WhatsApp, Google Hangouts™, LINE, Skype™ and Facebook (News - Alert) Messenger.
Not only should that be viewed as lost SMS revenue, but the expansion of these applications and the approaching use of WebRTC for browser-based multiple and multimedia interactions (voice and video) presents a real threat to mobile operator revenues. As the report points out, in late 2013 Deloitte predicted that by the end of 2014 mobile instant messages would reach a frequency of 50 billion per day (more than twice as many as SMS). Now, it looks like that prediction might have been conservative.
The chart below shows a country-by-country breakdown of those popular messaging apps:
Table 1. Messaging Application Use by Country: All Ages
While there is some discrepancy in the popularity of various apps by country, they have one thing in common. As the research showed, because they are free they are popular. That combination creates a repeating circle, as popularity breeds popularity. The example cited is WhatApp, which now has over 800 million monthly average users (MAUs).
So, as a prescription for CSPs to stem the tide and stop leading from behind, the authors suggest the following:
- Consumers know that “free” voice or video calls on these apps are not totally cost-free, as they eat into data plans if not connected to WiFi (News
- Alert). The research thus suggests that CSPs have an opportunity to launch an integrated voice, video and messaging service in their own branded app. Such an app would allow the CSP to grab market share by decoupling communications services from mobile phones so they can easily extend the offering to multiple devices, as well as new customer markets.
- Providers have an opportunity to turn the tables on OTTs. They can accomplish that by providing creative rate plans that make content sharing on multiple devices, plus voice and video calling, less expensive on LTE (News - Alert)
- It is noted that a simple, user-friendly app interface is critical.
The opportunity is thus to use things like global pricing, higher quality voice and video services integrated seamlessly with other consumer devices, and innovative mobile rate plans. CSPs may find consumers willing to not only connect through their networks, but add more devices as well. Indeed, this is a major force around the world, with some interesting pricing regarding VoLTE, VoWiFi and the embrace by several forward thinking CSPs like Telefonica, Orange and NTT (News - Alert) of WebRTC. CSPs may be playing catch-up, but that does not mean they can’t successfully fight back and flourish.
Opportunity #4: Make it Simpler, Leverage Social
As part of the research, smartphone users were presented with a couple of service innovation ideas to test their reaction. Customers found simple and social services the most attractive. And, while the researchers cautioned that the survey provided only anecdotal information as to real market interest, they were surprised by a what if scenario that caused significant positive reaction:
Those surveyed were asked: What if a technology exists that allows you to easily switch a phone call between different devices, for example, seamlessly switching from your phone to a computer or tablet?
Consumer’s enthusiastic reaction of making it simple led the researchers to believe that simplicity is a differentiated value that could cause consumers to switch allegiance from OTTs back to CSPs. Of course, simplicity is one of the attractions of OTT services as well so the seamless integration piece of this is important.
As to the “social” piece, a service was proposed that used the information available from social media as a way to provide super enriched caller ID. In the scenario the service would be opt-in, and consumers would receive available social information to better inform them on how to handle incoming calls. It is noted that even though consumers understood the service worked both ways — their own public social information would also be provided to others when they initiated a call —a majority of respondents liked the service, and even demonstrated a willingness to pay a little extra for it.
The suggestion here is that CSPs start experimenting with such services and “even take a page out of the OTT playbook and start with free, get consumers using the basic service, and then enhance it into paid-for, value-added services.”
The challenge, of course, is that it’s difficult to get consumers to make the jump from free to paid services, and premium services are always susceptible to being disrupted by the next free service.
Opportunity #5: Privacy and “Disposable Me”
While all of the opportunities are interesting, this is the one that I think I personally resonate the most with, since for years I have advocated that CSPs are uniquely positioned to be the guardians/gate keepers of my personal information and that they should be offering security as a service. This has been amplified by all of the data breaches that have become daily news fodder. In a risky world we are all looking for a safe harbor. In fact, the issue here is significant because if trust is broken e-commerce is in deep trouble.
Opportunity #5 speaks to this, as the researchers asked how interested respondents would be in having access to anonymous, disposable identities as contact information to make and receive calls and text messages. As you can see from downloading the full description of this opportunity there is an interesting twist. In fact, a little context on this is explained in Alcatel-Lucent’s blog on this subject: “Criminals are now targeting stolen phone numbers for use in hijacking Apple Pay. The problem isn’t with Apple (News - Alert) Pay or other similar online services. The problem is that criminals can easily forward your voicemail or port your phone numbers to bypass the two-factor authentication once they have your phone numbers, credit card numbers and other personal details stolen during data breaches.”
The researchers asked if using hyperlinks or usernames instead of phone numbers was of interest, and if consumers would like using them as anonymous, disposable identities.
They found that the surveyed consumers like their phone numbers, but want them and their identities protected, particularly in transactional modes.
The researchers concluded that “The era of disposable me is upon us.”
While I prefer that the era of the “protected me” should be here, and I would pay a premium to have peace of mind, the results do point to this being a great CSP opportunity. In fact, it is one that is rightfully theirs and can solidify on-going centrality of their service for customers. It is just surprising that security and privacy as a service has not been offered up to now, particularly since we now need it more than every across devices, applications and services.
Stay tuned for the last two opportunities. If you are a CSP, given the pressures to fend off competitors and grow revenues with new services having all seven opportunities to reference as food for thought is an opportunity not to pass up.
Edited by
Kyle Piscioniere
