The cat’s out of the bag – the telco oligopoly on QoS is over

Among many other interesting insights gleaned from the Voice and Advanced Communications Summit last week in Amsterdam was the frank but unsurprising admission from several leading telcos that they had been overtaken by OTT providers (or, for the pedantic, alternative service providers) in terms of the voice QoS they deliver. In other words, voice quality in OTT applications is now, on average, better than that delivered via classical mobile or fixed networks, at least for the average consumer.

That’s an incredible thing to admit. I’ve attended many conferences over the years in which telco executives have claimed that QoS is a key differentiator and that it’s one thing the OTTs will never be able to deliver. Not anymore.

Frankly, this is excellent news. Those of us who use both telco services and OTT applications (which, let’s be honest, is most of us) have known this for years. Except in certain specific circumstances, the quality delivered by telcos has been variable for a long time. There is no oligopoly on QoS.

So, what does this mean? Does it mean that telcos are now giving up and ceding the service ground to other providers? Far from it. It’s a breath of fresh air and a long overdue admission, but which also paves the way for a more focused approach to services. Telcos have built networks that have the flexibility to deliver a differentiated experience to connected users. Others have been able to leverage this and to innovate their own enhancements, for example, by choosing their own codecs, which has resulted in a gradual increase in quality to the point where it exceeds that generally offered by traditional providers.

It merely confirms something that has been obvious for some time. First, that the classical way by which telcos earnt their money from consumer subscribers has changed beyond recognition. Telcos are now connectivity providers. There had been a false dichotomy between “quality” providers and the “best effort community”. We’re all the same now. Second, the industry should heave a sigh of relief: they can stop pretending to focus on consumer voice revenues.

We’ve spent far too long defending a sinking ship. Consumers know very well that the value of voice and messaging is close to zero, which is why they opt for free services as soon as they can get them. There is no future in chasing revenue from such use cases.

Instead, this should be liberating. These networks and the coming of 5G create plenty of new opportunities to grow revenue but none from direct consumer payment for voice. I’ve lost count of the number of dunderheaded initiatives in which Telco This or That Telecom says how they are going to fight against OTTs and demonstrates how they are going to win consumers over with quality, usually through an initiative that quietly dies a slow death. No longer. That time has passed.

It's time to focus on things that can generate value – B2B services, enhanced capabilities for B2C offerings, IoT and more. Of course, there are still many use cases for enhanced QoS, just not for voice. Video, for example. Last-mile connectivity and optimisation.

There’s more (subjects for future bulletins), but the absurd and dogged focus on consumer voice has diverted attention, resources and energy away from areas in which telcos can really differentiate, add value and forge new relationships.

Casting out this shibboleth can only be positive, so congratulations to Deutsche Telekom, BT and others for taking what, to me, seem to be the first steps towards a decisive break from the past and the legacy view of the telco world. QoS may be dead, but there are many exciting new avenues to explore.

Perhaps we will finally see telcos wake up and find a new path to the future. I’ve said this at several recent conferences – this is one of the most exciting times I’ve seen for future service innovation in the last 25 years. Clinging to consumer voice is a damaging distraction. The cat’s out of the bag – now, let’s see where it goes.

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