Amazon "Chime" Illustrates "Value" Problem

“Everybody” knows that the telecom industry has a “perception of value” problem. A new conferencing service launched by Amazon illustrates the problem.




Before your head blows off, this is a conferencing service normally purchased by businesses, offered by Amazon Web Services.


Amazon Chime will be sold direct, and by partners Level 3 Communications and Vonage.


Level 3 will offer Amazon Chime as part of that firm’s “Unified Communications and Collaboration Services” portfolio.


Vonage now includes Amazon Chime in its business communications plans at no additional cost.


Three observations, here. AWS is the app creator and owner, not a “traditional” communications service provider or a unified communications specialist or enterprise voice provider. That is just one more example of over the top suppliers becoming substitutes for traditional telecom suppliers.


Level 3 is a distributor of Chime, not its creator and owner. That illustrates the growing role of access providers as conduits for third party apps, with obvious implications for business model, revenue and profit opportunities.


Finally, Vonage offers the service at no extra charge, showing another key trend: increasingly, service providers offer features and value, but not direct revenue-generating services.


In part, all those developments are part of one bigger reality: all apps now are conceptually created and delivered over the top, no matter who the owner. That is just the way the internet and IP networks work.


That also means more of the telecom business--by revenue, accounts, volume of data--is in the “dumb pipe” category. That is what internet access is, after all: a dumb pipe connection to all the resources of the internet.


Coupled with the decline of the traditional “apps” telecom provides (voice, messaging, content), there is a growing “value” problem, as the highest value lies with the OTT apps people and businesses want to use, not the suppliers of “access” to those apps.

Value, increasingly, is at the root of the telecom industry’s growing revenue problems.
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