Customer Wars: coming to your screen soon (Part II)

With money being made by apps providers, networks have a lot to play for with the promised world of IP telephony over mobile

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Although the telecom operator’s voice services are essential to most users, customers take voice quality and network coverage for granted. This is borne out by market research. According to a PwC survey on mobile usage in India conducted in 2013, 85 percent of users note network quality as a must, yet over 50 percent regard applications and services as the driver of their experience. In other words, when networks are not available, the operators are criticised, yet, when great network coverage enables uninterrupted high-speed connectivity, it is the apps providers who take the credit for delivering a wonderful user experience! Operators have tried various methods to make more money out of delivering a better network experience, but the topic is fraught with controversy. Net neutrality debates sprang up in the US when operators first tried to condition access based on type of usage, and recently this year, came up as a politicised topic in India as well.

In advanced telecommunications markets, while data connectivity uptake has started to peak, apps are becoming an increasingly popular point of monetisation. Since electronic payment capability is well penetrated across the user base in advanced countries, and user habits have passed the point of no return for believing in the security and convenience of mobile payments, growth in apps-driven business is good.

In India, Indonesia and other emerging Asian markets, as electronic funds transfer becomes more prevalent, apps providers offering paid services and goods will come harder to the battle for the customer’s wallet. But apps providers in emerging markets aren’t waiting around. Ecommerce provider Flipkart in India encourages customers to use mobiles to browse and place orders, allowing them to pay cash-on-delivery (COD), ingeniously kickstarting ecommerce even before EFT takes off.  In Kenya, Tanzania, Pakistan and Bangladesh, application-based mobile money transfers are a nationally significant economic activity. Innovation in the service model means that monetisable apps already have a bright future in developing countries too.

So, with money being made by apps providers, networks have a lot to play for with the promised world of IP telephony over mobile. Voice over LTE, referred to as VoLTE in the industry, and Video over LTE, less appealingly labelled ViLTE, seek to provide this functionality:

• Chat with your friends and share images with them during the call
• Share your geo-location while you talk so someone can find you even if using GPS
• Video-conference several of your friends at once while on the go
• Share files while you speak and over the same connection, making it easier to transact when it comes to health consultations, financial transactions and other information-intensive discussions.

For all the tens of billions of dollars sunk in the network already, the telecom industry is acting pretty slowly when it comes to innovating to drive the adoption of rich communications services for mobile users. LTE networks have launched in many emerging markets, including South Africa and Indonesia, with the first deployments in India becoming available, and with Reliance Jio’s upcoming launch to make such services more widely available than before. But the industry seems to be talking about the service potential with a degree of shyness, and in technical terms (such as IP, VoLTE and ViLTE), reflecting engineering pride rather than marketing appeal, which most people don’t understand.

Operators are going to need a common and compelling voice to shout about what the new network technology can help you do – before the functionality is subsumed into new applications that provide services over the top of the network. They are also going to have to innovate and create services people are willing to pay for, as well as encourage others to provide services that the telcos can provision. It isn’t game over for telcos by any means, because the reality is that in the uneven world we live in, many combinations of the ecosystem will continue to work for years, with many business models that support them. But the reality is that telcos need to get better at being intrinsically involved in the creation of these models, alongside the apps, terminals and IoT (in future) service providers.

Telcos will still win if they don’t engage in a war with Apps and Devices, but build platforms and networks which the others can innovate and delight customers.

The thoughts and opinions shared here are of the author.