WebRTC for Service Providers Puts them at a Crossroads

I’m at Enterprise Connect this week and attended the “Service Provider Role in WebRTC” session.  Unfortunately, I didn’t quite hear what I had hoped.

Service providers (you can call them CSP’s, carriers, cable MSOs, etc.) are at a crossroads.  They can continue to think of themselves as voice and internet companies but they are slowly becoming utilities – like the electric or water company moving bits from point “A” to point “B” while “Over The Top” applications are doing all the innovation.  The economic model for a utility is pretty thin: sufficiently reliable service at the lowest possible price.

That option may be fine for some but for me, that sounds like no fun at all.  Besides, the real money is made with innovative solutions.    

CSPs have a position of strength if they build on it.  They know how to build reliable networks, how to scale and how the regulators work.  So, there’s no reason why they have to give up market share to companies like Twillio for API connectivity of WebRTC or the many communications apps.

Strategically, there’s a huge opportunity for them to take their network smarts and put an API layer on top for software companies to build real time communications.  They are already selling their services to API providers today, but offering the services directly, they gain margin and have the chance to add innovative capabilities that only the network owner can do.  AT&T is a good example in the U.S.

CSPs can also offer value-added services even amid the OTT applications available today.  By offering new services like video chat, media sharing and live camera streaming, cable MSOs are seeing that they increase subscriber adoption of bundled services which drives retention.  Comcast is a great example of this.

The last area I wish had been discussed more is inter-carrier connectivity.  Today, the OTT apps, and to a large extent, the carriers themselves don’t see a value in integration.  Facebook and Apple as examples, are not interested in integration if they can get everyone to use their tool (and see their ads).  However, the CSPs understand that ultimately, interconnection is necessary for the industry to truly evolve.  Some are beginning to talk about standards but they are running into outmoded thinking by regulators at least in the US.  However, service Providers know the FCC – sure you can say the FCC is stuck in the voice world, but who else has the access and the mass to get the regulators to listen?  

Their position is unique.  CSPs need to continue pushing with the FCC and similar bodies around the globe to really develop the next interconnect standard.  Otherwise, Microsoft, Apple and others will continue their walled garden approaches.  Right now, RTC apps feel like the early days of email when AOL and Prodigy couldn’t share email communication, and we all know where they ended up.  One example of people not waiting around is Matrix.org.  They created an open source platform for interconnection and are seeing steady growth.

In my view, the value proposition for service providers is clear – API services for software developers, value-added communication apps and  interconnection is a winning combination and won’t leave a CSP relegated to maintaining the water pipes.

OK, so that’s a little of what I was hoping to hear.  If you were there, let me know what you think.

Mersoft products are specifically designed to help service providers grow revenue and market share by increasing customer adoption of service bundles and increased service tiers.  If you are interested in learning more about how we can help your business, let’s talk: [email protected].