Displaying items by tag: Skype
It’s no secret that telecom operators have struggled against the popularity of over-the-top (OTT) applications like WhatsApp and Skype, who have challenged traditional voice and SMS revenue streams. Some operators have called for regulators to subject OTTs to legacy telecommunications regulations in order to even the playing field. But such suggestions are misguided, according to the ITU.
Telecom operators are stuck in a predicament regarding OTT services who utilize their networks. They have little control over the growth of OTTs because users should be free to use the internet as they please. The network carrier only carries the IP packets from source to destination. They might be aware of the packets and their contents, but cannot do much about it. Carriers have had to roll with the punches and figure out how to adapt.
Ultimately, using VoIP (voice-over-IP) is a cheaper alternative to making expensive phone calls because the user doesn’t have to pay to use the dedicated phone line and instead utilizes an internet connection without any extra costs. As is the case with most VoIP services, calls made using the internet are often free while calls made to a cellular network require a payment. The advanced communication functions of modern smartphones have played a role in the rapid growth of OTT services.
The question is: what can network carriers do about it? Telecom carriers have lost hundreds of millions of dollars of revenue to VoIP services, statistics show. Some network carriers reacted, of course, by imposing restrictions on VoIP services. AT&T did this when Apple released its iPhone and the US telecom operator didn’t want its network being used for VoIP calling. AT&T lifted the block in 2009 after pressure from the Federal Communications Commission (FCC).
AT&T had an agreement with Apple to ban apps that would enable iPhone users to make phone calls using a wireless data connection. The scandal was revealed when the FCC requested that the companies explain why Google’s Voice app was rejected for the iPhone app store. The FCC was led to investigate if AT&T and Apple were colluding to prevent competition, sparking the beginning of a sour relationship between telecom providers and OTTs.
Can telcos come out on top?
For decades, telecom operators had free reign to charge rates for voice, data and SMS largely in excess of their marginal cost, which created a market ripe with innovation. The International Telecommunications Union’s (ITU) recent report ‘The State of Broadband 2017’ highlights the struggle telecom operators have faced since that period began to wane, as online applications became increasingly popular with consumers around the world who wished to interact in ways not possible through traditional communications channels.
Communication has been transformed by the likes of Facebook, Instagram, Skype, WeChat, Google, WhatsApp and Viber. These OTT services have “transformed the way people build communities and search for information, and made valuable contributions to health, education, finance and entertainment,” ITU claims in the report. “Online applications now generate a significant proportion of the socioeconomic impact of digitization and utilization of the internet itself.”
The demand for OTT services has driven the telecom industry to a new era, and some telecom operators – in defense of their traditional revenues – have sought to “handicap” the growth of OTT players, the report suggests. It’s important to note, however, that these OTT services, however disruptive they may be, are driving demand for telecom operators’ broadband services. Without the content and services that OTTs provide, consumers would be less willing to pay operators for internet access, ITU claims.
“The operators’ complaints make as much sense as cable operators that sell access to cable channels complaining that people are watching too much TV, driving up the demand for their own services,” the report says, “Or a restaurant complaining that too many people want to eat its food driving up food costs. Operators sell access – not content – but people only want that access to use online content.”
Telecom operators, according to the report, claim they cannot invest in their networks because online OTT services have limited their ability to generate revenue. The ITU says this is “inaccurate” and “misguided”.
Some telecom operators have called upon regulators to apply the “same rules for the same service” by encouraging authorities to subject all online OTT services to legacy telecommunications regulations. ITU rejects this, emphasizing that OTTs don’t offer the “same service” as telecom operators, and that subjecting them to the same rules would be “entirely inappropriate”.
OTT services like Facebook and Google, for example, don’t provide equivalent services as telecom operators, the report points out. Operators provide access to the internet and some vertically integrated services that take advantage of, and are bundled with, general access. Online OTTs, on the other hand, provide interactive experiences for internet users that go beyond traditional voice and SMS, including payment services, chat services and photo/video sharing.
The fundamental differences between the telecom sector and online OTT services has led to the establishment of different rules, the report highlights. For instance, telecom regulations are intended to ensure that established operators – who own network infrastructure with high barriers to entry and face limited competition – do not use these privileges to the disadvantage of consumers. OTT services, by contrast, don’t control network infrastructure and must compete fiercely to retain customers who could easily be swayed.
There’s also the perception that OTT payers get a “free ride” on telecom network infrastructure which is financed by operators. But in truth, OTT players invest billions of dollars annually in a combination of physical facilities, according to the ITU, including data centers, fiber networks, servers and routers, which form an “essential part of the physical fabric of the internet”. In fact, according to the report, online OTT players invested an average of US$33 billion per year in infrastructure from 2011-2013.
ITU argues that telecom operators should recognize how much online OTT players drive consumers’ willingness to pay for internet access, which then provides more opportunities to generate revenue and finance new infrastructure. According to the report, consumers who demand the most data tend to spend more money on mobile contracts that feature high-speed data – revenue that goes directly to the telecom operators.
“Regulatory authorities do not have to choose directly between the interests of online application providers and telecom operators,” the ITU report concludes with. The most important aspects of internet usage that regulatory authorities should focus on, the report suggests, are adhering to customer needs, ensuring that the internet is widely available, and prioritizing connectivity, competition and innovation.
Internet video calling services like WhatsApp, Skype and Viber, will be available to use in Saudi Arabia next week, after coordination between the Communications and Information Technology Commission and telecommunications service providers to allow applications that provide voice communications over the internet.
Communications and Information Technology Minister, H.E. Eng. Abdullah Alswaha, said the commitment had been confirmed by the cooperating parties to enable internet users in the kingdom to use applications to make high quality voice and video calls, under the condition that all applications are reviewed every so often.
“This fruitful cooperation between the kingdom’s telecoms partners comes under the umbrella of ‘Customer First’,” the Minister said, “a policy in which everyone works in order to give all telecom subscribers in the kingdom the best services that meet their expectations and satisfy their needs.”
Saudi Arabia has previously taken steps to improve customer service and create more transparency in the telecom sector, including the introduction of the quarterly index of complaints filed by subscribers to telecommunications providers.
More initiatives by the Commission are set to unfold in partnership with telecom providers, according to Arab News, to improve the sector and customer experience, in line with Saudi Vision 2030, a plan to reduce the kingdom’s dependence on oil, diversify its economy, and become a more digital, customer-centric society.
The Austrian government is set to introduce controversial legislation which would grant police authorities in the country the ability to access encrypted messaging services such as WhatsApp and Skype. The government has claimed that the legislation has been drafted in an effort to ‘crackdown’ on criminals who are increasingly avoiding the use of communication via telephone.
Austria’s Justice Ministry said that government officials has consulted with political, technology, civil rights and legal experts to review its draft legislation - that would ultimately enable authorities to access and monitor real-time conversations on messaging service application.
However, it has transpired that such surveillance would only be permitted with a court order into investigations in relation to potential terrorist activities, or other crimes punishable by at least five years imprisonment. Other EU countries such as France, Italy, Poland and Spain has adopted similar policy changes and introduced new laws.
It remains unclear how Austria would conduct such a surveillance program, although it has been suggested that one approach would involve the installation of software on the computers and mobile devices of suspects using messaging tools with end-to-end encryption. That would prevent the government from accessing information by means of traditional, remote eavesdropping techniques.
It’s been further disclosed that such tools are sold by a handful of Austrian firms who specialize in selling off the shelf surveillance to governments. "Law enforcement and intelligence agencies are gravitating toward this type of spyware to overcome the challenge of end-to-end encryption," said Ronald Deibert, director of the Citizen Lab at the Munk School of Global Affairs in Toronto.
Deibert’s institute investigates the abuse of such surveillance tools, and he stressed the importance for governments to make sure they have proper oversight and public accountability when granting police authorities the right to use these particular surveillance technologies. It has been reported that the Austrian Judicial system has already sentenced several individuals to prison for their links to terrorist organizations. Prosecutions were made in a number of cases due to the influence of data from devices that had been seized by law enforcement officials. The government plans to submit the bill to parliament after an Aug. 21 deadline for submission of opinions.
On September 14, a major European Union proposal was announced that will subject OTT internet services like Facebook’s WhatsApp and Microsoft’s Skype to the same rules that traditional telecommunication firms must comply with. It was a victory for traditional telcos, as the European Commission recommended tighter security and privacy for the likes of WhatsApp and Skype.
The proposal is part of a package of reforms proposed by the European Commission president Jean-Claude Juncker, which also includes a plan to provide free Wi-Fi to European cities by 2020. “We propose today to equip every European village and every city with free wireless internet access around the main centers of public life by 2020,” he announced during his annual State of the Union speech.
Another part of the commitment is to begin converting Europe to 5G networks as soon as 2018 in an effort to not lose ground to Asia and the United States, AFP reported. The proposal will give companies that invest in 5G networks longer operating licenses to operate mobile services, as well as the right to block rivals except in under-served areas.
“It’s a small revolution. It’s no longer historic operators on one side and new entrants on the other, it’s those investing in the future and the others,” said Gregoire Verdeaux, head of international policy at Vodafone.
Under the European Commission’s proposal, companies like WhatsApp and Skype would be required to offer emergency-calling services when customers dial traditional phone numbers, and would also have to obey stricter privacy rules. France, for instance, is openly wary about the use of WhatsApp because of its encrypted messaging, which has made it a popular app for terrorist chains.
But not everyone has taken to the proposal with open arms. “The Commission should use this opportunity to reduce regulation in the hugely competitive market for communications services, rather than adding complexity,” said James Waterworth, of the Computer & Communications Industry Association, a lobby group representing Microsoft, Facebook and Google.
The past century has delivered an extensive range of communication tools, from the invention of the telephone, to cable television. But nothing has advanced human interaction quite like OTTs (Over-The-Top services). With cheap, efficient and globally available communication tools like Skype, WhatsApp, Netflix and Google, the world is witnessing a shift away from traditional communication outlets. Do old-school forms of communication stand a chance against the rapid growth of OTTs?
On-demand internet services have revolutionized communication all over the world. With rapid increases in speed, quality and pricing, using the internet to connect people with content via OTTs is slowly making traditional modern forms of communication redundant (e.g. calling from a landline or watching subscription television).
The fact that many OTTs like WhatsApp and Skype are free of charge is what makes them so dangerous to Telcos trying to make a profit from traditional calling and texting. There are always ups and downs to technology transformations, and we are only just beginning to witness the impact that OTTs will have on modern communication.
The term OTT was first coined by telecoms industry analyst, Dean Bubley, who published a report on the subject in February 2012. OTT (Over-The-Top) refers to telecommunications service providers which deliver one or more of its services across all IP networks – predominantly the public internet.
“An Over-The-Top service allows users to access content directly over the internet on any device and any internet network from any provider without restricting access to particular telecommunication networks,” says Mr. Prakash, COO at Vuclip, a video on-demand service.
“OTT prevalence is being driven by a new and fast-growing generation of users who are constantly on the move and connected to multiple devices at any given time, breaking away from traditional viewing patterns and behaviour,” Prakash added.
This high level of connectivity Prakash refers to is accompanied by a growing interest in mobile video on demand, which gives users the freedom and flexibility to consume content of their choice regardless of what device they may be using, time or place.
“We have learned that consumers don’t mind paying for quality content offered at a fair price and they are even more willing when the payment method is simple and convenient,” Prakash explained referring to the study. “We find that offering consumers a combination of free and paid content also works well, because they get a taste of the experience without an initial investment. Diversity in content is a feature that works well in an OTT’s favour.”
OTT services have brought a transformational positive impact to the entire mobile and digital ecosystem, be it consumers, telecommunication providers, content studios, brands or agencies, which proves why OTTs have been so popular around the world. In order to stay relevant, leading vendors like Ericsson are embracing the OTT trend.
In February, Ericsson announced the launch of OTT Cloud Connect (OCC), an open cloud service that allows mobile operators across the globe to 'connect' to multiple OTT players to deliver new and creative services to users. The Ericsson OCC service was designed to bridge the gap between operator networks and OTT services by exposing the OSS and BSS capabilities of operators to OTT players and vice versa. This brings simplicity to collaboration between OTTs and operators, making it possible to offer unique application-specific features to end users for better experiences.
Ericsson’s OCC open platform allows any OTT player to deliver innovative features to users based on integration with specific operator network capabilities. It acts as a gateway platform that abstracts the complexities of each operator's network and provides simple integration for OTT players and applications.
Ericsson is collaborating with Google as one of the first partners to get on the OCC platform. This integration enables Google to bring innovative features and services to products such as YouTube and reach large numbers of users by leveraging the scale that OCC provides. Ericsson plans to continue to bring additional OTT players onto the OCC platform.
"Mobile environments introduce a number of complexities, but also a range of opportunities when it comes to delivering quality experiences for users,” said Jay Akkad, Senior Product Manager on the YouTube Emerging Markets team.
“Ericsson's OTT Cloud Connect forges collaboration between operators and OTT providers to break down some of this complexity and open the door to a world of opportunity for enhancing services. We believe initiatives like these will accelerate innovation between operators and OTT providers, and we look forward to working with operators on new features and services to users.”
Impact of Over-The-Top video (OTTv)
Concerning the popularity of OTTs, video definitely takes the crown. Over-the-top video (OTTv) is becoming increasingly mainstream. According to a report by AT Kearny, OTTv services as a share of total television viewing has doubled globally over the past 12 months and exceeded 30 percent in some developed economies. In the United States alone, 75 million households have an active OTTv subscription like Netflix, compared to 32 million only four years ago.
According to the report, the fuel behind the trend is the rapid emergence of user-friendly OTTv services, along with the increasing quantity and quality of content available online. When Netflix launched in 2007, by April 2014, it was being used by 50 million people in 41 countries. In addition, Hulu, the OTTv service from NBC Universal, Disney and Fox, now has six million paying U.S. subscribers. In a bid to compete with the likes of Netflix and other similar services, pay TV operators are offering multi-screen packages to their subscribers and online-only packages to non-subscribers.
“Many pay TV operators provide, or are in the process of providing, companion apps and some also offer stand-alone internet-only access subscriptions,” said Prakash on the subject. “However, the biggest challenge for Pay TV operators is the threat of cannibalization of their own current business model and revenue streams. Hence, many of them check the box but cannot completely go all out to push to an OTT. This is a classic dilemma of established models and dependencies on those models. OTT video services such as Viu and Netflix carry no such baggage.”
While television hasn’t been completely cast out of the living room, traditional services will have to keep the needs of their evolving customers in mind and incorporate new digital services that can be accessed through a multitude of smart devices.
The driving force behind expat expansion
Another sector that OTTs have had a strong impact on is travel, transforming cities around the world into expat hubs. OTTs have revolutionized the industry, allowing consumers to search, buy and share tips at the touch of a button, not to mention the convenience of being able to contact loved ones overseas for free via an internet connection with the likes of WhatsApp and Facebook Messenger.
The online travel revolution traces back to 1996, when Microsoft, the most high-profile technology company at the time, unveiled its impressive attempt at an online travel agency, known as Expedia. The success of Expedia was unprecedented, making travel booking much more seamless.
This was soon followed by Larry Page and Sergy Brin, two Stanford University students, who examined the web to find ways to index pages based on popularity with other users and websites. The result was Google introduced in 1998, the first place where online consumers go to for information. With one quick Google search, one can book a flight, accommodation and travel activities within five minutes.
Fast forward to 2004, and another breakthrough occurred. Harvard student Mark Zuckerberg launched his social media website Facebook, which heralded the beginning of a new concept of online travel experience: sharing. People traveling the world are now able to share their unique experiences with their loved ones back at home with ease and reliability.
The next significant breakthrough gave users access to the web via their handsets. The launch of the Apple iPhone has had a huge influence on the way people travel, playing to the evolution of OTTs. The corresponding App Store triggered an enormous range of travel-related applications, along with social media apps, music apps, news apps, and of course Google Maps: the essential travel tool.
“There's no way I'd go overseas without the communication tools we have today,” says expat Poppy Wortman. “While the romantic notion of only being able to converse through letters and postcards in the past appeals to me, the ability to instantly chat with my family or a friend while away is a huge benefit. Technology gives me the ability to be freer; things don't have to be so planned out as you can research as you go, book accommodation, and keep all in the know of your whereabouts.”
The growth of OTTs has spawned a new generation of connectivity that is free and convenient. WhatsApp, for example, founded in 2009, has a user base of up to 1 billion as of February 2016, making it the world’s most popular free messaging application.
In addition, Skype, an application that provides video chat and voice call services free of charge, had over 660 million worldwide users at the end of 2010, with over 300 million estimated active each month as of August 2015.
The Skype application is based on a ‘freemium’ model, meaning much of its service is free, but Skype Credit or a subscription is required to call a landline or a mobile phone number. Skype’s free service and paramount convenience has attracted bitterness from some network administrators who have banned use of the application on corporate, government, home, and education networks, citing such reasons as inappropriate usage of resources, excessive bandwidth usage, and security concerns.
Regardless of the critics, OTTs like Skype are undeniably useful for individuals like expat Joanne Lee, who says Skype has been a “godsend”. Skype is one of her favourite OTTs, allowing her to ‘attend’ family events with her grandchildren back in her home country of New Zealand, without having to pay a hefty phone bill.
“I would not be comfortable living without the convenience of technology and would struggle without my smartphone and the apps that it provides,” says Joanne.
It doesn’t look as though OTTs will drop in interest anytime soon. WhatsApp recently sparked interest when it announced that users could send messages secured with end-to-end encryption, denying WhatsApp and third parties the ability to read them. The announcement made the OTT service even more desirable to use compared with regular forms of communication, especially in a digital age where personal data is constantly at risk of being hacked.
The OTT movement is changing the way people communicate all around the world. More and more people are using OTTs for travel, entertainment, business and socializing. The OTT report by AT Kearny leaves readers with this interesting conclusion to consider: “Understanding and managing the consumption, content, and competitive dynamics of the market is the key challenge facing all players looking to win in the OTT market.”