REVENUES from traditional voice calls aren’t what they used to be for telecommunications companies, speakers said in the Asian Carriers Conference held in Shangri-la Mactan Island Resort and Spa last week.
We had it so good, said Disruptive Views editor Tony Poulos. “Voice has been the same but we managed to present it differently, we billed it differently. How did it work out that the longer the call distance was, the more we could charge for it? It is a wonderful thing,” Poulos said in an engaging presentation that started with the lyrics of the Cliff Richards song “We don’t talk anymore.”
“If you were a hundred miles from the power station or a thousand miles from the power station you still pay the same electricity, it’s the same with gas. But in the telephone industry, we managed to charge people more because they were a longer distance away. We were very clever,” he said.
Then smartphones and various communications apps took over.
Consumers have made the shift to data communication, said Hot Telecoms president Isabelle Paradis. The shift has gone to such an extent that a survey showed 64 percent of 4G users preferring access to data instead of voice in emergencies.
Paradis said people consider data as the basis of communications and voice (albeit over Internet Protocol (IP)) is just one aspect of that stream. She said that when it comes to communications, consumers want “everything wireless, everything IP and everything data.” Users want access anywhere, at any time and everything for free. With voice over LTE on the horizon, she said in an interview, the mobile phone will soon go all IP.
In last year’s ACC, people were talking about the threat of OTTs or over-the-top players. OTTs are what telcos call products and services like YouTube, Viber, Skype or Facebook that use resources of networks without their involvement and without paying for it.
Last year, the big question was how to deal with them: should telcos block OTTs, degrade their connectivity or work with them?
This year, working and partnering with OTTs seemed a given.
PLDT president and chief executive officer Napoleon L. Nazareno talked about how his company works with OTTs. He stressed the need for telcos to go beyond being mere providers of connectivity into platforms for digital services.
Poulos, meanwhile, warned that with people talking less and relying on chat apps and other communications products, telcos are losing control over their networks. He said telcos should be making money from this use of their infrastructure, without which OTTs can’t deliver their services.
He suggested a tiered infrastructure where telcos can offer a paid “gold-quality standard” with assured quality of service for high-bandwidth use such as video-based products.
In an interview, Poulos said “telcos are in a very difficult situation.”
“The over-the-top players don’t have to be licensed, they have no regulation and it’s a little bit unfair when you think about it.
They can access all the customers in the world without any regulation on them whereas the telco can’t do that. It’s very hard for telcos to roll out a Facebook, for example,” he said.
But he’s seeing innovation in things like health care monitoring by Telstra in Australia and in services like Smart Money by Smart Communications. He also sees billing as one big advantage for telcos that they can make money from.
“But their core business will always be the network. Without the network, the whole digital economy collapses,” he said.
Although companies like Facebook and Google are already testing connectivity products like Internet balloons, Fiber or drones that provide access, he doesn’t see them going into telco services in a big way.
“They could buy a number of major telcos with their petty cash if they wanted to. But they are not that silly. They know how difficult it is running a telco business. They don’t want that responsibility. So they may invest in them or partner with them rather than replicate them. The cost of replication is too great,” he said.
“But then we don’t know what technology will do in the future. Somebody might come up with new technology that makes it very easy to connect a million people.”
(max@limpag.com)