Carriers are scrambling right now as they see OTT services such as Skype and WhatsApp eating into their revenues. Indeed, David Walsh, GENBAND’s (News - Alert) new CEO, noted that OTT players have taken 30 percent of voice traffic in seven years and how service provider voice growth is now around 3 percent per year.
In response to this onslaught of new competition, carriers have come together to develop standards that will allow their telecom equipment to run on off-the-shelf servers so they can more effectively compete with their app-based competitors. This initiative, known as network functions virtualization, or NFV, will help turn hardware-based telcos into software telcos – allowing them to be more flexible in rolling out new offerings while saving money in the process.
This, however, will take time to happen. In the meantime, carriers need to respond to this threat.
To get carriers into the OTT game immediately, GENBAND has purchased OTT player Fring, one of the earliest apps on the iPhone (News - Alert), to support VoIP. The company has amassed 40 million users, and Walsh infers they are big enough to scale but small enough to not be a major threat to telcos, which of course make up GENBAND’s customer base.
GENBAND has just turned itself into the arms dealer allowing carriers to fight back against OTT with their own white-label solutions.
Think about it – what is the biggest problem a carrier has when competing with a software company run by a bunch of hackers who live on chicken wings, Mountain Dew and pizza? The answer is corporate culture. Carriers aren’t software companies. They don’t understand user interfaces, slick design, or much of what consumers are looking for today.
In a way, GENBAND has become like Hitch, the movie in which Will Smith plays a character who helps men look and act in a way that allows them to get dates. Yes, GENBAND is making carriers sexy.
Fring will be the consumer offering and complement NUViA, the company’s white-label unified communications-as-a-service offering for the business market.
But if this idea were so smart, why isn’t everybody doing it? Why aren’t all equipment vendors running out and buying OTT communications providers? The answer is that someone has to lead, and GENBAND is doing so.
The idea may not work as well as intended, but there are a lot of reasons why this move could be very successful. OTT has the potential to kill a carrier relationship as customers churn, but if the operator can come up with a way to bundle the best of OTT with better quality and reliability, it could keep more of its customers from defecting. Walsh mentioned users get knocked off Viber calls when a network call comes in. But carriers can keep this from happening if they control the OTT experience. Another plus is carriers can use Fring to enable enhanced services like an immigrant calling plan for a group of people in a new country who want to keep in touch with their family overseas. Picture a calling package in one country that comes bundled with a local number in another.
Walsh said that carriers need to reinvent themselves. He is right. And GENBAND aims to help them do that by providing real-time communications services to customers, even if they are of the OTT variety.How the market reacts to this news will be interesting. Whether carriers decide they want to be sexy or not is there decision. But it seems this move by GENBAND could fast-track many carriers into solid OTT slayers. If this works as GENBAND plans, there will be a solid response (lots of copycatting) across the competitive communications infrastructure landscape, and it will be fascinating to see how this story plays
Edited by Stefania Viscusi