2009-11-15

Rich communications in the cloud ?

Informa ‘s rich communications conference was held in November 2009. I joined a panel there, and participated to follow-on meetings of GSMA RCS initiative and developer challenge. My findings :
  • Standard-based integration is becoming a nice-to have feature as the cloud provides better ways to reach critical mass and ROI.
  • Several solutions deliver innovation beyond industry standards, to offer the best of both worlds.
  • New devices such as net-book, internet appliances and social network behavior will drive the evolution of next generation communications.
Standards are only nice-to-have features
No one disputes that interoperability made SMS successful and enabled MMS modest penetration (Graham Trickey of GSMA gave an example : "MMS had 50% growth in USA since interoperability agreements in 2008". The challenge is that since the iPhone launch, and Web.20 web solutions, there is not much demand for applications with limited feature set, coming late. Even in emerging markets, users are impatient and tech-savy. So what is the status of telecom industry standard initiatives :
  • GSMA has been promoting applications through RCS pilots, and enabling technologies such as OneAPI for networks and OMTP BONDI in handsets.
    Why did RCS take 2 years before doing pilots ? The investigation was done in 2007, release 1 published at the end of 2008, release 2 adding the support of net books was published for the market trials in 2009. Trials were done in 6 countries : Italy (TIM ; only 50 internal users although TIM has 30’000 of its mobile community bundle Tribu) , Spain (Telefonica), Portugal (Optimus) , Korea (SKT with Pajama5 ) , France (Bouygues Telecom, Orange, SFR ; with 2 handset manufacturers). RCS release 2 offers content sharing (videos, images during a voice call), messaging (chat) and network address book. But only the release 3 will include social network integration. GSMA is currently chaired by Aude Pichelin and in order to get wider adoption of its approach it has launched the RCS developer challenge , supported by GSMA officers including John Darnbrough.
    The technology competition from the Web is huge and many are skeptical about the chances of success of telecom industry standards . Paolo Simoes, from TMN Portugal says bluntly : "RCS delivers the lowest common denominator and lacks any Wow! effect, like previous attempts : Mobile IM, push to talk, ...". Providing another comparion, Roberto Minerva suggested : " developers would prefer the Skype API". My view is that despite rumors of Open source , this is focused on 3rd party scripts and applications to control Skype UI. Alan Quayle provides a summary of challenges in recruiting web developers in his blogs and reports on network APIs. To be fair to RCS, we note that web communication applications are still equally fragmented or often undocumented. And note that web apps still refer to the dial-tone paradigm to describe presence management Twitter, Google Lattitude.
  • Operators have recognized that cloud-based or “over the top” solutions will dominate operator-led solutions.
    Traditional revenue models of operators don’t seem to be valid for new communication services ? Traditional models were based on managed services with subscription and usage fees. Cloud computing, voice services such as GTalk and Skype or social applications like Twitter, Facebook and web social networks have changed the economics. Commenting on this for TMN Portugal, Paolo Simoes commented “SMS and MMS rates are decreasing by 2 digit percentage annually and therefore no business model based on communication usage increase is sustainable; flat rates are going down from 90$ to 20$ and no additional market stimulation is necessary; lastly no monetization of presence is possible when Facebook and MSN status are free”. His advice : “if you cannot beat them [Facebook, Yahoo!, Google,…] join them”. And he sums up his prediction : “ it took 14 years to deploy 3G, 7 years for 3G, it will take less than 4 years for LTE and the move for an all IP application infrastructure – in 2015 China Mobile will acquire Vodafone and the dominant application will be some kind of FaceTube from China ;-)”.

    Vodafone appears to have done a similar analysis, promoting Facebook and other cloud social network but adding value added in the form of service aggregation in the Vodafone 360 application. But again, to be fair, the monetization of Twitter and Facebook is equally challenging, and we have witnessed the 75% valuation drop of Skype, despite their phenomenal growth.
Cool applications : innovation and standards
What makes me optimistic is that the applications coming out are nice. There after all may be a smoother transition from telecom 1.0 industry standards to meet mobile Web 2.0 . Here are some examples :
  • Cross-device social communicator :
    Movial Communicator was deployed by Optimus as part of a youth community services branded TAG, a mobile subscription at a flat rate of 10 Euros . Nuno Lopes Gama from Optimus reported that TAG has 100’000 users in the 15-25 years age group and reports good usage of the PC Webphone for voice and SMS . However there has been little demand for VoIP or messaging from the Enterprise sector, as they already have low prices for voice calls and more advanced professional messaging (from Microsoft). Movial has deployed applications with 15 operators on multiple handsets (Symbian, Maemo, Android) and provides integration with music services, social networks (Facebook), UGC sharing ( Flickr, Daily motion) and participated to RCS French trial (with Bouygues). It also offers a hosted services with Haloya .
  • Smart phone idle screen communications:
    SKT Telecom Pajama 5 was launched after SK Telecom measured that 62 % of calls were to less than five numbers ( 29 % of these to one person and 51% to top 3 called parties). The service let’s you designate 4 buddies and adds : expression with wallpapers, animated messages , A-GPS friend finder , feed from SNS sites (Cyworld, Facebook). The service attracted 350,000 youth subscribers in 3 months and is being extended to more participants in 2010 . For the general market, SKT has launched mobile IM interoperability with other operators, growing usage 20X in 2009 ( 60% of subscribers have mobile IM-enabled handsets but 200’000 use it). This project was part of HP’s open innovation programs and included partners like Eluon .
  • Ambient communications “ :
    HP Labs team submitted Friendlee to the RCS innovation challenge as a concept to demonstrate the automatic generation of a social network. Phone contacts are dynamically weighted by user’s mobile communication frequency, duration and location records. It leverages the mobile network intelligence to shows your friends and preferred businesses on a map, highlighting your closest friends or implicit recommendations. The more the user calls or sends SMS to a friend, the higher up he or she will be on the user’s list. And obviously, this can be linked to Facebook and other SNS.
Usage of devices and social applications
What trends will influence the evolution of these services ?
  • Net books adoption : it is clear that net-books, tablets, photo frames are starting to bring new ideas into the mobile communications space. An estimated 5 million net books were shipped in 2009, a 30% growth rate from 2008. Major manufacturers include Acer, Asus, HP and Samsung ( (the last two entrants growing over 30%). Subsidized prices start around 200$ for models like HP mini 311. This is not yet a big adoption compared to smart phones but net-books are a market catalyst in terms of mobile rich communications functionality.
  • Mobile social networks : Christine Perey authored two editions of Informa’s mobile social network comprehensive worldwide analysis. They forecast that the users of mobile social networking will grow from 8% at the end of 2008 to 25% by 2013, generating over 6 billion $ by that date (from subscriptions, advertising and transactions) . Another trend is that all web communities are mobilizing and that the functionality is “creeping” in every other application category. Perey research is now researching mobile augmented reality, a particular category that also provides a direction for very elaborate form of group interactions using advanced device capabilities together with cloud computing resources.
  • Youth market trends : in recent months I have been working with C:Insight on segmentation and ethnographic analysis of emerging mobile markets like India, Africa and South-East markets which could prove market-changers in the domain of rich communications. Some data on mobile youth users :
  • 300 million in China, Taiwan and Hong Kong
  • 219 million in South-East Asia
  • 124 million in Western Europe
  • 146 million users in Latin America
  • 60 million in Central and Southern Africa
  • Youth users in the US, UK and NL use thier mobile 1.5 hours / day ,
  • Asian Youth use it 3.5 hours / day.
  • 34% of youth bought their mobile phones only to send SMS.
  • Teens are sending/receiving 100 SMS messages 3,000 / month.
  • 16 % of youth subscribers have smartphones.
  • 57% of youth in India browsed on their mobile phones
  • It is interesting to note that even in rural India, users are tech-savy and interested in loading applications. Market-education and communication will be essential to achieve viral marketing . For example campaigns for Vodafone value-added services “ZooZoo” could be as important as the service itself.
  • Network driven innovation : Diane Meyers authored Infonetics research on RCS market in 2009. She estimates there will be over 1 million subscribers in 2010, 5 M in 2011 and M by 2013, deployed over 3G networks with an IMS core. It is clear that there has been some delays and these estimates are quite tentative. In addition one could question whether IMS or cloud services will become core to RCS, perhaps a mix of the two as my discussions seemed to indicate. Infonetics rightly indicated early on that the operators challenges were not only service interoperability but capability to innovate to grow the market.