In reading the reviews of the telecom year, I see both iPhone and Android pop up as two of the most significant changes on the telecom industry. I think it’s important that we stop and think a moment.
On the iPhone: I already have music on my phone, I can do email, I have a slick address book interface, I have a browser, and thanks to Spinvox I’ve had voice to text for several years, and there have been touch sensitive screens on the market for years. So what’s new or innovative about this phone? Apart from the Apple logo and the marketing dollars spent making operators’ customers around the world a little more aware of mobile data services, little is new or innovative. Is the iPhone significant for most customers or the people working in operators or suppliers? Not really, just like the LG Prada (launched with far less marketing budget), it helps us along the way to making the phone experience better for data services.
On Android: there are many mLinux OS (Operating System) suppliers out there, the Linux OS maybe free but the devil is in the integration; hence why innovative start-ups such as A la Mobile (www.a-la-mobile.com) have developed a “BIOS” (Built-In Operating System), just like in PCs, to manage this problem. Having a big brand to create yet another development community may help. However, isn’t Linux open? So shouldn’t it be far easier for apps to be developed than on a closed OS?
In my opinion both iPhone and Android are significant if you’re either: On the ‘investment banker’ side of the business, trying to find investment areas such as ‘handset OS’ that software companies will want to pay big bucks for and hence provides the opportunity to get a cut of the transaction. Or in trade magazines, as such topics provide ample opportunity for writing column inches. From my perspective there have been much more significant changes in the industry through 2007, that will have an impact on the majority of us in the industry, not just the press or financial guys, but customers and the people working in the telcos and their suppliers.
The Application Network Interface (ANI): BT’s 21C SDK is a good example. Here operators around the world are actively examining how to expose capabilities from their network to encourage third parties and to monetize capabilities within their networks. For example, allowing registered applications to know when a customer churns and does not take their number to avoid situations described in this article: http://www.theregister.co.uk/2007/10/26/facebook_sued_for_missending_text_messages/. There are three broad groupings of services enabled through the ANI, innovation within operator branded apps, innovation in co-branded applications, e.g. allowing a Facebook app to purchase contact on the operator’s portal or enable a conference call, and then the long tail where the vast array of capabilities across communications, billing, content and context could be exposed to third party applications. 2007 witnessed the first steps by several operators; this will grow and will fundamentally change the operators’ position in the services layer.
2007 was the year the industry as a whole finally got its head around the IMS (IP Multimedia Subsystem) and SDP (Service Delivery Platform) situation. The CDMA operators (Verizon and Sprint) with their choice of VoIP over EVDO had to choose a standards-based scalable IP service control layer, and IMS provided the solution. On the fixed side of the business we’re still seeing the scalability issue of IMS versus soft-switch solutions yet to run its course. For the SDP, it’s really a re-use of SOA (Service Oriented Architecture) deployed in enterprises. In financial services their IT systems must have zero downtime (not five 9s), with transaction times in microseconds (not milliseconds), with transactions per hour far greater than in telephone networks. Some enterprises have passed telecoms in their requirements of IT systems, so telecom can ride their learning curve, and so the SDP has started to enter the plans of many operators, in conjunction with the ANI. In essence the SOA enables operators to take an incremental approach, yet avoid some of the silo issues.
Advertising finally broke out of its hype-cycle and got focused, with the launch of Blyk in the UK, but more importantly the trials by operators on their portal and more focused experimentation such as ad supported gaming. This will likely represent 10% of revenue within 10 year as discussed in an earlier weblog entry.
In summary, handset software has incrementally innovated and has reached a point where the investment community are now hunting for opportunities; while the service layer finally made a break through in ’07 which is going to impact us for the next 10 years. It’s just a pity the industry keeps focusing upon the ‘bright and shiny’ issues, rather than the fundamental issues.
Alan’s comments are right on track. The platform delivers the most value yet the enablers often get the most press.
In our view, 2007 was the year that service enablement truly cut its teeth through complex service delivery platforms. Sure SDPs have been around for a few years. But until data services over mobile networks (including video) became usable, scalability was not tested. Now that mobile data networks and IPTV networks (AT&T U-verse) have scaled up to reasonable usage levels, we’re seeing the cracks in the dike. This will lead to distributed performance improvements and eventually to highly effective service delivery platforms.
OK so why am I fixated on Service Delivery Platforms when this is only one element of Alan’s view? Because ANI, IMS and the services to be delivered are all linked through the SDP. The very nature of a horizontal delivery platform leads to efficiency (once the kinks are ironed out) and with the right planning – a better user experience with less cumbersome security, clicks, links. The SDP scalability education gained by the service providers in 2007 will lead to significant revenue potential in the years to come.
The shiny parts (iPhones) may be visable to the consumer but the real value (services) rely upon the hidden parts.