Parallel Lines: Network choices

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It’s not something operators want their customers to know. It’s not even something many of them are willing to acknowledge publicly. But voice is no longer the sole domain of operators like Orange and O2.

In fact, voice is quickly becoming an application, just as phones are quickly becoming computers. And if operators are slow to reinvent themselves, they risk being seen as access (as opposed to service) providers in the new world of communications.

Sure, declining landline revenues are problematic for operators – there simply isn’t enough money to be made selling data to make up for the loss, or so it seems now.

But mobile and fixed operators face a potentially even greater problem – how to establish themselves as more than just network access providers competing on the basis of speed and cost alone, once voice applications become more widely available.

The reality is that your phone can now be used purely as a computer. Smartphone sales using operating systems (OS) like Android, Apple, WebOS and Windows Mobile – as open to developers as the operating system on your computer – are rapidly increasing.

In fact, smartphones represent the fastest growing segment for mobile devices, according to Gartner. Voice just happens to be another application you can use on these gadgets. 

Very soon, it won’t matter what kind of phone you have or which operator sold it to you – your phone number won’t even be attached to a particular device but instead will function more like an email address.

In the end, what matters most will be the applications you choose to run on your phone. And, of course, the network speeds and reliability those apps require. It won’t even matter what OS you’re using.

The cloud will win out on delivery of services, and so the OS becomes secondary. Applications will be delivered on-demand, and will adjust to whatever device you happen to be using.

Once you open your device to apps from Skype and other voice service providers, your days earning money selling minutes are numbered. But this is the best thing that could happen to mobile operators, given the unprecedented innovation happening in mobile now that devices and their capabilities have been made available to the mass developer community.

Mobile operators may try hard to fight this new reality (barring Google Voice from the iPhone App Store is one example of such a fight), but a better strategy might be to figure out how to earn revenue from application development and distribution.

The bottom line is mobile operators have to move toward an enablement model, where access enables both the platform layer and application development layer.

As not just access providers but service enablers, they can both collect revenue and share revenue with developers. And by helping to standardise access to network services through open APIs, operators can move voice beyond the boundaries of traditional networks and specific devices – essentially broadening their revenue opportunities.

If operators allow developers to access their networks, they stand a better chance of monetising voice as a cloud service. If they don’t, software companies (Google, Microsoft, Skype) are going to end up owning those services instead, and owning the customer relationships, too.

 

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