A few decades ago, the telecom industry was all about voice calls; now voice uses only a small amount of bandwidth that was deployed to handle data. Mobile services have gone from an extravagance to the main service option for the masses. And regulatory policy appears to be teetering between total deregulation and re-nationalizing the telecom industry. Although these telecom trends come from different segments of the telecom industry, we’re headed for Convergence 2011, where their effects will be felt throughout the year.
Here are the top five 2011 telecom industry trends we see shaping up.
Trend 1: Mobile broadband and “URL stores” move service layer to the Web.
The top trend in 2011 could be called the “webification” of the service layer, particularly for mobile services. While telecom operators have been concerned about being cut out or made irrelevant by over-the-top (OTT) competitors that offer services but don’t own network facilities (the essence of “disintermediation”), the truth is that so far, these competitors have had minimal impact on operators’ revenues. That’s going to change in 2011 because of two important industry shifts: the concept of “URL stores,” and the growth of mobile broadband and 4G.
Google’s Chrome operating system (OS) and Web store is a critical shift in the way we think about services. Because Chrome is simply a browser linked to hardware, it’s the ultimate thin client and draws all of its resources from the cloud through a simple URL. That URL is then “sold” under various financial terms through a Web store. The point is that any current or future service can be conceptualized this way, and service complexity can be hidden in the cloud. URLs can be accessed by any Web-enabled device, which would make the model nearly universal. Operators have been trying to develop their own service layers based on a Web model, with mixed-to-little success by their own reports. The time for experimentation is now gone. In 2011, Google will offer URL stores and other OTT competitors may follow.
Mobile evolution to 4G and Long-Term Evolution (LTE) intersects URL-store development in a number of ways. 4G makes all mobile devices potentially more useful as portals into rich experiences, and the “mobile experience” conduit is the hottest market in telecom. The stakes are high for all competitors in the mobile services space, and the potential for additional revenue is motivating Google and other OTT players. For operators, the challenge is that 4G has always been seen as the path to increased IMS deployment, and IMS clearly plays no part in Google’s plans for a URL store. Unless IMS can be linked to URL-store services in a highly effective way, the new service model may force operators to rethink their vision of IMS for mobile application delivery.
Trend 2: Operators work to monetize content delivery.
Up to now, operators have focused their monetization strategies on IPTV delivery. But in 2011 they will expand their content delivery strategies to include screen-switching, special handling of video where permitted, and offering content billing and customer care services from OSS/BSS systems. Mobility is one of the main drivers of these changes, as is the increased use of streaming video to supplement ordinary viewing via channels. Integrating social network with video content is also an operator priority and is an early reality in some proof-of-concept testing.
The focus of competition here is likely to be the content delivery network (CDN). Vendors are already talking about two specific areas of content monetization involving CDNs. First, the use of “in-network” CDNs can provide special handling for operator content. Second, a federation of CDN services among operators could provide greater content reach for mobile roaming customers. A federation could also help customers who access a version of “TV Everywhere” content on a mobile network or use a different Internet provider than their traditional video content provider.