In this end of year article I’ll review 2012 and look at a few of the things coming up in 2013.  2012 has been an eventful year, we tend to miss how eventful as we’re busy working and raising our families (a life-long commitment!).  The year opened with some operators finally admitting revenues are in decline systematically, it wasn’t cyclical.  This was discussed in this weblog’s end of 2011 weblog entry.  The OTT’s (Over the Top service providers) got the blame, rather than operators admit the truth that they’ve not kept up with their customers’ needs, after nearly decade of having this pointed out to them by their customers and independent thinkers in the industry.  The failure of standards bodies outside the air interface continued to be highlighted as WAC (Wholesale Application Community) crashed and burned (sorry, I mean joined forces with the BSMA), OMA (Open Mobile Alliance) continued to produce APIs that looked a decade out of date compared to the state-of-the-art from Voxeo and Twilio, IMS (IP Multimedia Subsystem) continued its slow progress thanks to its gross complexity and increasing irrelevance.

The reason I highlight noisy in the title of this article is the incessant chatter occupying the airspace in telecoms: Cyber-this, Digital-that, Smart-the-other, Cloud-everything, LTE, Big Data, Monetize, M2M, eHealth, OTT, Social, Advertising, connected car, the list goes on and on.  I use the TMF (TeleManagement Forum) as a litmus test, if they’re rambling about a topic in their usual unquantified, hype-fueled generalities, then you know that topic is now part of the noise.  It’s like the industry is chattering away to avoid dealing with the real problems: structural change and consolidation; and operators increasingly pissing their customers off with issues on quality of service, nickel and diming, ridiculous roaming rates, and given the current economic hardship for many in the western world raising prices.  Last year I paid telcos about $5.5k, the only service I spent more on was healthcare and that’s another problem but outside the scope of this weblog.  From my perspective they’re certainly not short on cash. And examining the numbers: AT&T and Verizon reported a combine annual revenue of around $240B, that’s the same size as the GDP of countries like Israel and Hong Kong.  And don’t forget Verizon in Oct was reporting year-on-year revenue growth of 4%.  As an industry we’re now over $2T in annual revenue, and we’re claiming we cannot afford to run our networks!  The only phrase that can be applied to such a situation is “gross-incompetence.”  This situation of “chatter no action” must stop and we must focus on the basics: the network, services that matter to customers, and customer experience from beginning to end.  As an example of specific action: Voxeo Labs launched Ameche, their communication PaaS, which delivers “Apps in your Calls™” to stabilize and grow voice, video, messaging, and value added service revenues, an over $1 trillion market.  But such important developments to our industry are lost in the noise.

Telco Consolidation and Revenue Flattening
The OpenCloud roundtable “The Game has Changed” kicked off 2012 for me.  It provided a realistic view of the changes happening in the industry, without the usual hype of “Henny Penny and Chicken Licken” claiming the “sky if falling down,” hence “you must buy my product X!”  A key point from that roundtable is echoed in the previous paragraph in that we’re missing the point in not focusing on the basics.  We continued to see telco consolidation through 2012, for example Sprint was bought by Softback, T-Mobile is trying to buy MetroPCS, Clearwire finally gave up after wasting lots of investor money,  Hutchison bought Orange Austria, France Telecom bought out Orascom Telecom in their Egyptian mobile joint venture Mobinil, etc..  Also NTT Communications continued its global acquisition spree acquiring a 74% stake in Netmagic Solutions.  I highlighted NTT as one to watch in the ICT space, they’re focused on what I think could become a winning business model later in this decade – global scale in ICT solutions. Through 2013 the telco consolidation will continue and likely  accelerate.  For suppliers the consolidation is done, there are not many left, we have a duopoly of Ericsson and Huawei, with ALU and NSN struggling to survive, both have done enough to make any dramatic change in 2013 unlikely, look to later in 2014 when ALU could generate a surprise.

Lack of a Free Telecom Press: Why we have such a Noisy Industry of “Chatter No Action”
Change often happens so slowly we barely perceive it.  Think back to 2000, there was a telecom press, telecom journalists would write funny and scathing articles about telecoms events, written from the perspective of an informed lay-person.  It was great, BS would be pointed out with relish, like the boy and the Emperor’s new clothes.  Today the press have either retired, moved industry or become ‘analysts.’  As Krish Prabhu put it succinctly at the LTE North America conference, referring to an “analyst firm” as a “marketing organization.”  To be clear people aren’t receiving midnight visits and being told not to blog.  Rather the few independent thinkers / commentators left are lost in the crowd of noise about Cyber-this, Digital-that, Smart-the-other, Cloud-everything, LTE, Big Data, Monetize, M2M, eHealth, OTT, Social, Advertising, connected car, etc.  This noisy environment is not good for our industry as mentioned at the start of this article, its simply distracting us from the task at hand.

Big Data: Hyped to a Crazy Level and in Need of a more Thoughtful Discussion
This 2006 video I think sums up how most people feel about Big Data.  Why do most people feel OK about Amazon using their information but not Google.  Amazon uses purchase and viewing history to make online shopping better, it’s within the bounds of the relationship, though I’m sure we’ll see hiccups along the way as people’s tolerance to their data being used without explicit permission varies.  For Google its tougher as the boundaries of the relationship are less well defined.  I must congratulate the team that put the Telco Big Data conference together as a good first step in bringing telecoms and IT together in the same room and focusing on the specific business impacts. In Big Data it’s about people and process NOT technology.   Most telcos have problems in simply accessing their data with a single view because of organizational silos.  This is a major barrier to existing BI (Business Intelligence), never mind big data.  We have only begun to scratch the surface on building better customer relationships, offering treatments that work, and better running our network.  Big data is essential, taking averages is no longer adequate, rather examining the customer’s complete experience with an operator.  I think the silly chatter on big data will continue through 2013, with regulation being blamed for a lack of action, rather than the lack of a sensible discussion on its application in the real world.

WebRTC: 2013 will be the Year of Experiments
Over hyped but not as badly as Big Data.  I’ve reviewed WebRTC in a number of articles examining the impact on telecoms, interesting start-ups and a No Jitter article.  WebRTC (Real Time Communication) is  important, don’t get me wrong, but you still need a network, it simply turns browsers into phones, games controllers, etc..  The demo by Solaimes and Voxeo Labs should be seen as an important sign-post on the power we’re creating in communication APIs and WebRTC.  Through 2013 we will see an acceleration of WebRTC services launched, with some starting to break through into mainstream adoption.  Telcos need to get ahead of the curve on this one, I asked at a panel session at the IMS World Forum in April about IMS and WebRTC, no one had an answer.  In 2013 WebRTC will be a key theme of the IMS conference, I’m running a pre-conference workshop on WebRTC and will be demo’ing a number of WebRTC start-ups at the end of the workshop.  I show the WebRTC workshop agenda at the end of this article.

Over The Top TV Continues to Grow, Primarily as a Secondary Viewing Platform, and 2013 will Continue that Trend

• BBC demonstrated during the Olympics OTT TV can support a national live TV service
• My family’s OTT TV experiment continues, at present its much better than broadcast multi-channel in both experience and especially price.
• OTT will become the dominant secondary viewing platform, and a primary platform for a niche of subscribers (because of sports, prime-time content, and it’s a group/family decision) as reviewed in the TV Delivery Evolution Report.

At the Broadband World Forum the BBC keynote gave a great review of their experiences in supporting live OTT (Over The Top) TV for the Olympics.  A great proof-point, if any were required, that OTT providers can support live TV.  They had some interesting data on when people use different devices, e.g. using the tablet to watch TV in bed.  They use Elemental as their adaptive rate encoders.  User experience is defined by the video quality and adaptive bit rate is essential to use the capacity available given the screen size / resolution / device, but no more capacity than is required else that’s wasting the BBC’s resources, as well as the network.

My family and I continue to be a primarily OTT TV household, we’ve slowly made our way through Battlestar Galatica, with the final episode (number 76) being watched tonight.  The ability for our son to watch TV with no adverts and watch what he wants when he wants on the device he wants is great.  He thinks something is broken when adverts come on when he watches TV, we had a family holiday in Montreal over Thanksgiving, and he got to see some “Traditional TV” there and gave up watching as the experience was not acceptable for him.  It will be interesting to see if he will ever acclimatize to ad-sponsored viewing as he gets older, I struggle with it today and I’ve spent most of my life watching ad-sponsored TV.

The 307 page TV Delivery Evolution: Hybrid TV, Over The Top (Internet) TV and TV Everywhere (Multi-Screen) TV. Status Report and Projections 2012-2017 explains the latent threat from the web-based service providers (OTT TV).  Over the study period OTT TV will become the dominant secondary viewing platform in many markets; 67% of payTV households in the US, and likely 50% of Western European households by 2017.

The SDP is Dead, Long Live APIs: Rapid Growth of APIs and API Management in 2013
The SDP Global Summit marked a turning point in the industry around the services domain.  The biggest changes from last year’s conference were: real numbers are presented and real business is being generated through Telecom APIs;  a pragmatic view on the role of Telecom APIs, no longer chasing the long tail in the hope of acquiring ‘telco developers.’  Though the long tail is not given up on, rather the focus shifts to internal and partner use of APIs; and a recognition on the need for API flexibility, API standards are not enough, standards bodies should perhaps act more as a repository of best practices across public and private APIs, than setting public APIs in stone before the market has decided.

Some of the take-aways from the conference were: flexibility in platforms is essential to support APIs, and the emergence of the API gateway as a required component.  There is no SDP, the acronym should be dropped.  It’s a Services Domain across people, process and technology.  Just like the IT and Network domains in an operator.  See the Services Domain Report for more a much deeper discussion.  Because operators buy routers and base stations they think an SDP should similarly be productized, it is not, and it should not be productized.  The variety of market situations and accelerating rate of change means the services domain is a constantly evolving component of an operator’s business.  We’re now seeing emerging best practices in the services domain and the extensive re-use of off-the-shelf IT, not custom systems.  But please do not let the TMF (Tele Management Forum) get at these processes else they turn them into an overly complex mess to keep their affiliated consultants busy on projects.  Most of the cost in an SDP project is in the integration into existing platforms, and the fragile state of many service silos.  Not the platform itself, here Telefonica shows the steps to enable better services and IT domain integration with ESB (Enterprise Service Bus) federation and discussed in the Services Domain Report.

Enterprise Services: All Talk, No Action, Will it change in 2013?
Our industry is quite consumer biased in its thinking, while the consumer business is becoming much more competitive, opportunities in the enterprise sector remain untapped.  I’ve discussed the importance of APIs to BYOD (Bring Your Own Device), collaboration, and to enterprise mobilization in weblog articles about Layer 7 Technologies, Mind The Mobilization Gap, the Impact of APIs on Enterprise Communications and Collaboration, the Emerging OTT Threat to Enterprise Services, and what NTT is doing about it.  There are some operators that understand the changes happening and are investing heavily, as heavy investment is required, while many pay lip-service in the noisy telecom environment of “chatter no action.”

The Core Service of Voice Just Keeps Getting Worse: and There’s No Sign of Change in 2013.
A recent WSJ article “Talking Less, Paying More for Voice”  discussed the fact that usage of voice is in decline; and identifies some of the culprits for the decline: The iPhone, SMS, Yelp, Facebook, email, young people dominate everything and they do not call anymore, and other web services.  While most of these are true that they substitute some of the actions where we would have used voice, there’s one culprit missing that is likely the biggest reason: the mobile voice experience is crap.

Mobile voice call quality is crap, its barely intelligible, if you have an iPhone one in ten calls are dropped, operators have not tried to remain competitive on international charges, and have simply not innovated on the core voice product.  On the young people issue; just wait and measure their behavior once they have to earn a living and have children and you’ll see its just how people use technology at different stages of life.

It’s not discussed in public by operators or regulators or the GSMA.  Though this weblog has been discussing it for a number of years when we reviewed Wadaro back in 2008, and presented some interesting analysis this year: it’s the impact of unapproved devices on an operator’s network.  The usual suspects are devices that look like a branded device, e.g. an iPhone 4 being sold on eBay for $20.  Generally, they’re manufactured in China (though not exclusively) from sub-standard components and shipped without testing or approvals.  A few years ago the numbers were in the hundreds/thousands on each network, today it’s in the tens of thousands and its becoming a problem for operators in maintaining quality of experience for all of us that paid full price for our approved phones.

The impact of unapproved devices is significant, just a few on a cell cite can incur a 86% CAPEX/site count increase; a 200% voice capacity loss; a 50% data capacity loss; up to 250% more delay in serving MAC packets over the air; and a significant effect on coverage and maximum data rate, dropping to 250kbps with some holes.  Remember mobile networks are built assuming all devices are approved, unfortunately that is definitely not the case today.  You can buy on eBay crazy cheap iPhone knock-offs for a few 10s of dollars, buy a couple, pop some SIMs in them and what your service degrade when you turn them on and start using them – it’s a serious problem – and again lost in the noise of ‘chatter no action.’

Policy Control and Charging: Don’t think the OTTs will Pay for QoS you can’t Deliver!
Policy space is noisy, with lots of BS.  At the Policy Control and Charging Conference this year I presented results from a consumer survey, the message was simple: Value and Simplicity.  I keep hearing that OTTs will pay for QoS when the person making that claim has never sat down and had a business discussion with a term sheet on what it will take to make the OTT hand over their hard-earned cash.  Remember OTT services work most of the time, and when they don’t more often than not its the home network over which the Telco has no control.  Look to customers that are running their business on Telco’s network and think about what matters to them in the application of QoS.  In developing markets there are amazing innovations with policy control that are delivering simplicity and value to customers, as I’ll discuss in the workshop at the Policy Control and Charging Conference in 2013.  We need to be much tougher on the chatter to stop it so we can focus on moving forward as an industry rather than around in circles.

In summary, a busy and a noisy year, with 2013 likely to be a transition year, where those that can cut-out the noise and focus on the basics of their network, voice, and services that matter to their customers (not to them) will be experimenting and hopefully starting to see that success reflected in customer satisfaction and retention numbers through 2014.

Through 2013 keep an eye on:

• Voxeo Labs in making operators networks innovative and competitive in communication services;
• Layer 7 Technologies in making APIs relevant across the operator’s business and particularly to enterprise customers;
• Wadaro who is showing the mess some devices are making of their network and how to solve it;
• Solaiemes in making RCS (Rich Communications Suite) useful through APIs and plugging that into the web-world using Voxeo Labs’ WebRTC gateway;
• Joyent is creating the real-time cloud, essential to telecom services;
• And there is a long list of companies innovating in communications that I simply do not have space to highlight here.

See you at the AT&T Developer Summit or the Consumer Electronics Show in January, and contrary to this weblog article see you at the Mobile World Congress in February!  Below is the outline of the WebRTC workshop I’ll  be giving at the IMS World Forum.

WebRTC Workshop, the HTML5 Real-Time Web

Introduction
The main goal of WebRTC is not interoperability with legacy communication systems. Rather it’s to open communications to new usage scenarios and to web developers through the web browser.  Initially browsers on PCs and tablets, then increasingly across browsers on smartphones.  Imposing the complexity of SIP on web developers would have made it very hard to get traction. With the WebRTC spec, a great 1:1 video chat experience can be built with under 100 lines of JavaScript code.  HTML5 developers are only just becoming aware of WebRTC, and they’re excited, HTML5 meet-ups on WebRTC are sparking innovations across all industry segments.  The Telecom industry has been notably late to the WebRTC party, letting the Bay Area community drive its creation.  At last year’s IMS World Forum I asked a question on WebRTC to which none of the panelists had an answer.  Today no Telco or communication service related supplier can afford not to understand WebRTC and its impact on their business.

Objectives

• Bring together deep technical and deep business thought leadership on WebRTC with Jose de Castro and Alan Quayle, providing attendees with a unique independent workshop.
• Provide a deep-dive quantified analysis of the WebRTC status, enabling attendees to understand what is likely to emerge over the next 18 months to 2 years, in this complex rapidly emerging ecosystem and what it will mean to their business.
• Provide attendees with a series of WebRTC demonstrations, to share their experiences on implementing WebRTC, and provide ample networking opportunities at the end of the workshop to discuss and consolidate what has been learned through the day.

Presenters
Alan Quayle has 22 years of experience in the telecommunication industry, focused on developing profitable new businesses in service providers, suppliers and start-ups.  Customers include: Operators such as AT&T, BT, Charter, Etisalat, M1, O2, Rogers, Swisscom, T-Mobile, Telstra, Time Warner Cable, Verizon and Vodafone; Suppliers such as Adobe, Alcatel-Lucent, Ericsson, Huawei, Nokia Siemens Networks, and Oracle; and innovative start-ups such as Apigee, AppTrigger (sold to Metaswitch), Camiant (sold to Tekelec), OpenCloud, and Voxeo. He works with the developer community and on the board of developers such as GotoCamera, hSenid Mobile, as well as suppliers such as Sigma Systems.  Check out his weblog www.alanquayle.com/blog .
Jose de Castro is the CTO @ Voxeo Labs where he drives the vision their next-gen communications technologies backing Tropo.com and the PhonoSDK.  Jose leads Voxeo Lab’s involvement in WebRTC standardization. Prior to joining Voxeo Labs, Jose was Chief Architect at VoiceReady, a graphical design and management tool for building telephony applications, which was acquired by Voxeo in 2006.

Workshop Outline (0930-1700)

Introduction to WebRTC:

• What is it and what it is not,
• Cutting through the mis-information and hype
• Non-technical introduction

Initial Market Review:

• Web browser implementation status
• Taxonomy of suppliers / service providers
• Codecs and devices – is certification necessary?
• What is Google’s aim?

Standardization deep dive:

• Standardization process
• Current status
• Battles and likely outcomes
• IETF and RTCWEB documents

Technology deep dive:

• Peer connect API
• Setting up local media and media flow
• Protocols
• WebRTC triangle / trapezoid
• SIP, Jingle and the PSTN.

What WebRTC means to Service Providers and IMS:

• Extending enhanced communications services to web browsers
• Impact on OTT (Over The Top) and existing voice, messaging, video and VAS
• Impact of device compliance
• Customer experiences and behaviors
• Revenue, churn and relevance impacts

What WebRTC means to enterprises:

• Impact on Unified Communication and the Contact Center
• Impact on company’s website
• Security and operational issues
• Potential cost savings and innovations

Summary and Recommendations

Demo time (15:30-17:00)
Demo Time will be divided into 2 sessions, its aim is to be informal and provide ample networking opportunities for attendees to consolidate their learning from the workshop:

• Demo presentation to the group: each demo will be 5 minutes long, and 5 minutes for questions. We’ll plan on perhaps 50 minutes of demo presentations; and
• Demo one-on-one: attendees can chat one on one with the demo presenters, notionally 40 minutes but can run on into discussions at the bar through the evening.

Demos:
Zingaya (‘Call’ button for websites) enables voice calls through any computer from a webpage. No download or phone is required. Zingaya offers this seamless voice calling capability to any website.  Whether it’s a large e-commerce enterprise or a start-up. Simply embed a ‘Call’ button into the website. Visitors can click that button and the call is forwarded to the website operator’s preferred land-line or mobile phone. All that is required is a website; all the visitors need is a browser and microphone.
Voxeo Labs (Open source enabler for WebRTC services) Phono is a jQuery plug-in that turns any Web browser into a multichannel communications platform, capable of placing and receiving VoIP telephone calls from the browser, as well as handling real-time chat communications. Phono is a client-side solution and requires zero server-side logic on the part of a developer; all communication is handled by the Voxeo Cloud.  Ameche provide a communication Platform as a Service that enables innovative new communication servies across of IMS, WebRTC and the legacy network.
Tenhands (Enterprise HD Video Collaboration) Desktop HD video collaboration service, it’s free and built for business needs.
Solaiemes WebRTC to Rich Communication Suite demo
Oritor (Enterprise Unified Communications).  Oritor converged communication services framework enables operators and enterprises to offer seamless rich media solutions while reducing cost and complexity. Oritor’s standards-based services enable converged (voice, video, data) applications, instant messaging, conferencing, mobile, social media integration, and other communication solutions.
Huawei leading NEP with a WebRTC insurance app demo
FrisB (Free global calling) Free global calling between any web-browser and any phone (or web browser) with no downloads.
Drum (conference calls and online meetings) allows providers of fixed, mobile and next generation VoIP services to deliver audio conferencing as a direct, branded service.  Hosted within your IP network on your servers, Drum audio conferencing is a standalone software solution with an integrated media server.
Bistri (Social Video) Video chat with fun video effects, take screenshots of calls, share them with friends or social networks.   Bistri runs in the browser, so there’s no need to install additional software or plugins.
Others to be added