Will 2010 be a Turning Point for the Telecommunications Industry?

Will 2010 be a turning point in the telecommunications industry? Maybe, says Mike Cansfield, Forrester Research analyst.

Cansfield argues that the recession has brought a new realism to the sector, forcing telcos to cut costs and adopt better operating practices. Might might argue this trend has been underway for several years, though.

Uncertain economic growth also will weigh on the industry.

But new converged services might explode, as the boundaries between Internet, telecom, voice, data video and applications continues to blur.

Cansfield argues that a major telco will disappear in a merger or go bankrupt in 2010. The merger of T-Mobile and Orange in the United Kingdom, the unsuccessful merger of Bharti Airtel and MTN Group in Africa, and the purchase of HanseNet in Germany by Telefonica are examples.

"Green" initiatives will be back on the telco agenda in a big way, Cansfield believes.

Mobile device wars will renew with extra intensity and the battle for the mobile apps market will begin in earnest. Just as iTunes in conjunction with the iPod changed the music industry and the MP3 device market, so the Apple App Store in conjunction with the iPhone transformed the mobile data and applications market for both consumers and, now, businesses.

The boundaries between "work" technology and "home" technology will continue to blur. Traditionally customers have bought different communications services depending on whether they were at work or at home.

But these distinctions are blurring, Cansfield says. Many of us today work part of our week at home and connect with the office through our own terminals and fall into the trap of dealing with business emails at home in our supposed down time. But this is not a one-way-street — hence the high number of personal SMS and Twitter messages sent from the workplace.

Net neutrality will be a major issue in 2010, because the evolution of stable and sustainable revenue models for the entire ecosystem is at stake, though most for network service providers.

Also, 2010 will be the year that many governments will recognize that broadband connectivity is essential for economic competitiveness, the delivery of public services, and an inclusive society, and they will step up to the plate to close the digital divide, Cansfield argues.

All of us likely have opinions about the importance of 2010. I suspect some of us really believe 2010 will not be especially noteworthy in terms of marking a turning point in the telecommunications business, but only because the underlying changes are irresistible forces not dependent on economic conditions, government regulations or industry consolidation.

The business is changing in profound ways because end user needs and interests, provider business models and powerful technology trends are profoundly aligned. Nothing is going to stop those changes.

Surprise, Surprise: Mobile Ops Now See Google as a Partner

Mobile service providers seem to have reached new conclusions about their role in the future mobile ecosystem, Nokia Siemens Networks says.

The single greatest change of business environment is that “the boundary between mobile telecoms and the Internet has all but disappeared,” says Frederic Astier, Nokia Siemens Networks head of customer operations marketing.

So what does that imply about the relationship between network service providers, application providers and end users?

“This study tells us that telecoms operators increasingly see their value, and competitive differentiation, in increasing customer satisfaction through improving network quality, while acting as a content broker for social networks, mobile app stores, TV and voice over IP services," Astier says.

Where the old business model was tight integration of network capability and applications, the new world features an more-open environment where network services and features are sold to third parties who create and deliver services, applications and features to end users.

While voice calls remain at the core of their business, about 78 percent said they plan to open their network as an intelligent bit pipe for new solutions, by while 69 percent said they intend to bundle voice with other content.

Moving away from the walled garden approach of the traditional telecom model, they are embracing two-sided business models by acting as conduits between third-party applications and content developers and the end users.

In that regard, there seems to have been a bit of a shift in attitudes towards application providers such as Google, which now is seen less as a disruptive threat and more as a partner.

The study involved one-to-one interviews with the business leaders of 70 communications service providers from 42 countries, says Nokia Siemens Networks. Its aim was to provide a comprehensive overview of these telecoms operators’ business needs through 2012.

ADTRAN Unveils "NetVanta Unified Communications Solution Suite"

The issue with many unified communications solutions is that they explicitly or implicitly require people to change the ways they do things. ADTRAN thinks that doesn't work. The other problem is that people sometimes have trouble envisioning how IP communications can help them, in concrete ways.

For that reason, the new "NetVanta Unified Communications Solution Suite" provides voice mail, unified messaging, fax server, and auto attendant features that are compatible with legacy and IP-based business phone systems, with a big focus on the ability to create business process apps.

NetVanta UC solutions are designed to accommodate from five to greater than 2,000 users per server,  and are designed to allow rapid creation of vertical market applications for the  banking, hospitality, education, health care, retail and real estate industries, for example.

The "NetVanta UC Solutions Suite" includes the "NetVanta UC Server," a software-based UC application designed for customers with an existing PBX.  Microsoft Windows platforms and scales up to 2,000 or more users per server. It is capable of supporting unified communications on one or more different types of PBXs from a variety of leading manufacturers.

It provides unified messaging, fax server, auto-attendants, personal assistants, graphical drag-and drop service creation, IVR for inbound and outbound calling services, integration with ODBC databases, text to speech, one number services and call redirection services and notifications.

The "NetVanta Business Communications System" combines the NetVanta 7000 Series IP-PBXs with the NetVanta UC Server, enhanced with click-to-dial capabilities and an integrated conference server.

The "NetVanta Enterprise Communications Server" is a complete IP-based voice system for larger enterprises. Designed for use with Microsoft Windows and "Active Directory," it offers a full soft IP-PBX that is complemented with all the UC features of NetVanta UC Server, plus click-to-dial, an integrated conference server, a paging server for overhead paging.

The "NetVanta Business Application Server," scalable to more than 200 concurrent calls, allows businesses to create cost-effective new apps using a graphical drag-and-drop service
creation environment.

It allows channel partners, service providers and IT and telecom professionals to quickly and easily create tailored communications services. The app server integrates with existing application databases.

It is useful as a standalone solution or can integrate with Microsoft OCS or IBM Lotus Sametime, for example. It also works with IMAP email servers and Google Gmail.

The new NetVanta products are all software applications using the Microsoft platform. The key decision for a buyer is whether it wants to "buy a new PBX" or "keep" what it already has.

If a firm has 10 to 100 users, it will tend to buy a new PBX. If it has 75 to 2,000 users per location, it also will tend to want the enterprise communications server.

The complete line includes a standards-based PBX, switch, router, firewall, voicemail, voice gateways, auto attendant, integrated messaging. The base package now supports as many as100 users. Larger organizations will use the enteprise communications server, using ADTRAN or Polycom handsets.

One advantage of the system is that it works with analog or IP business phone systems. More significantly, though, it allows rapid creation of vertical market apps.

In the real estate business, the "Talking House" application can be used to create automated logs of who is calling in to inquire about a property, or allow prospects to get information on any property an agent is showing, with the materials created directly by the agent.

Agents can have people contact them right away, listen to an IVR message or create marketing materials that can be faxed or emailed to people who want more information.

The same thing can be used by auto dealers to automate the process of car warranty notifications and doctor's offices can automate the reminder process.

"In a business office environment, customers can use unified messaging to provide more value, using our PBX or anybody else's," says Jeff Wissing, ADTRAN senior product manager.

"You can deliver a fax to a smartphhone, forward messages, read emails over the phone or harvest telephone numbers from existing directories and then place calls," says Wissing.

"If you listen to customers, you can create apps for them," Wissig says. In some cases it might take only minutes, it other cases a few hours to create an app. Once a reseller learns the environment, the reseller can use the tools to create all sorts of templates for their end users.

The whole idea is to "make it very personal and customized," he says.

"Customized services are a big draw and makes end users very sticky," Wissig notes. "It very often is faster to spend an hour to build a prototype service, and then have the customer use it, than to explain what a user might do."

"We had a B2B call center and built a prototype in 15 minutes to show how the solution would work," Wissig says. The customer got a payback on the system within 30 days, he says.

"In every organization there are ROI opportunities with UC that are lurking, just waiting to be discovered," says Wissing. "You just have to know how to find them."

A manufacturer of personalized items such as rubber stamps, signs and business cards might create an IVR application that provides 7/24 order status to customers with small orders, allowing their call attendants to concentrate on providing personal service to larger customers.

A wallpaper manufacturer might use an IVR application to provide product availability and pricing to their resellers based on their membership level in their reseller program, providing reliable 7/24 service without the need for call takers.

A large multi-national company might use an application that reliably redirects after-hours calls for support to the cell phones or even home numbers of on-duty support staff, eliminating the need for physical staffing of an after-hours call center.

A video store might allow callers to place orders 7/24 without the need for an after-hours service team.

Is the Unified Communications Business Growing or Shrinking?

One of the "problems" observers have when evaluating the size of the unified communications market is that UC includes so many different legacy products and services, ranging from business phone services to software applications and hosted services.

The other issue is that UC applications overlap with and complement other applications such as mobility and social networking, which can make an accurate estimate of product sales difficult. Analysts at Forrester Research, for example, suggest that sales of legacy products of all sorts are not growing much at all, while sales of business phone systems might drop precipitously in coming years. This forecast represents annual sales volume in billions of dollars, for example.

Whether UC is important or not is not the issue. Lots of other useful, even essential services and applications, such as email and voice, represent indirect revenue streams, or even declining revenue, despite their inherent usefulness.

Something of that sort seems to be underway in many segments of the UC business. This forecast does not cover other product segments that likely will represent parts of the future UC revenue stream, such as telepresence, a direct UC application, or even access services such as SIP trunking that will be used to support unified communications.

How Significant Will Google "Nexus One" Be?

It's increasingly clear that a new Google-branded "Nexus One" unlocked smartphone will be sold in 2010. What remains unclear is how much impact the device will have, for a number of prosaic reasons. Unless Google has designed a dual-mode, multi-band device capable of operating on both GSM and CDMA air interfaces, roughly half the market will be inaccessible. Even if the device is GSM certified, it has to be built using a radio operating across all U.S. GSM bands, and that isn't entirely clear, yet.

It might be the case that the Nexus One simply has not yet been certified for AT&T's 3G spectrum bands, or for Sprint and Verizon networks using CDMA. For an unlocked device to work across all four of the major U.S. networks, that would be required.

So far, it appears the device is certified only on some of the U.S. GSM bands. What that means is that T-Mobile USA absolutely will be able to support the Nexus One. It might work on AT&T's spectrum as well, but it isn't completely clear that is the case, at the moment. So far, AT&T has declined to offer an Android-based device in its device line up.

That issue should be clarified soon enough. The other issue is the retail price of the phone. Unlocked phones can be bought now in the U.S. market, but few consumers do so, because of the price. Perhaps Google plans to subsidize the device, but if not, Nexus One will not be a mass market device at the start. Few consumers buy devices at $600 when a subsidized device costs $200 to $300.

Perhaps Google plans to offer an installment plan, which will help. If the Nexus One really provides a better user experience, it will be helpful. But if it is sold at full retail price, and works on just one U.S. GSM network, its impact will be limited, to begin with.

Google "Nexus One" Available in January 2010

A new Google-braned phone called the "Nexus One" will be available in January 2010, it now appears. The Android device apparently resembles the unlocked HTC Touch, runs Android 2.1 on a Snapdragon chip and has two microphones, according to a report by eWeek, supporting voice-to-text features.

The move represents a new tack for Google, which to this point has relied solely on handset and carrier partners to propagate Android-powered device in the retail market, with T-Mobile, Verizon Wireless and Sprint all selling Android devices.

Some observers say Google is bothered by a problem frequently encountered with open source software: incompatibilities that frustrate users and provide a less-than-optimal end user experience. Others might suggest Google simply wants to showcase what is possible by more-tightly integating hardware and software, as Apple's iPhone is able to do, providing a more-enjoyable and useful experience.

Why the Google "Mobile Lab" Test?

Whatever else Google may want to demonstrate with its "mobile lab" test, which apparently has Google employees globally testing an Android smartphone, the company likely wants to explore and highlight the use of the mobile device as an intelligent sensor able to use voice input, location and camera features to enrich the "what's around here" features of Google's search experience.

Google first launched "search by voice" about a year ago, and "looking ahead, we dream of combining voice recognition with our language translation infrastructure to provide in-conversation translation," says Google VP Vic Gundotra.

Google recently also introduced "What's Nearby" for Google Maps on Android 1.6+ devices, available as an update from Android Market. The application returns a list of the 10 closest places, including restaurants, shops and other points of interest near a user's location. Local product inventory will be added in 2010.

Visual search also is developing, Gundotra says. A picture taken by a Google-equipped device will return relevant search results based on that visual information, including information on landmarks, works of art, and products.

"Today you frame and snap a photo to get results, but one day visual search will be as natural as pointing a finger," says Gundotra.