#smartercommunications

Mobile World Congress started this week — and again it will bring over 40,000 telecommunications CxO’s to Spain from all over the world.

Every year there seems to be a dominant theme for the industry as this iconic event dawns over the beautiful city of Barcelona. 2013 was the year of ‘Big Data;’ it was everywhere and on everyone’s lips. For 2014, based upon my experiences in the industry and perusing the exhibition booths here I believe the focus this year will be solidly on ‘Customer Experience.’

The continual increasing pressure of over-the-top (OTT) services providers, saturated markets and increasing costs to acquire new subscribers and the increased expectations of the connected consumer have forced communications service providers (CSP) to follow the retail world into the realm of extreme customer experiences creating what we at IBM call the Customer Activated Telecom Provider.

In the fall of 2013, IBM surveyed over 200 telecommunications CxOs from around the world and 9 out of 10 responded they need the ability to quickly deliver new offerings while 71% said they are more concerned with competition from OTT providers than other telecoms. As a result of this pressure, 65% are now focused on customers as individuals instead of segments and 82% are focused on digital and social interactions with customers while only 12% are focused on face-to-face interactions in 2014.

Close collaboration with customers is indeed a dominant focus for telecom executives at the start of 2014. Why? Because as an industry, we have finally realized the impact a customer can have on our organization. Over 60% of respondents said that customers already influence their organizations to a ‘large extent’ and as a result 4 out of 5 industry leaders are looking to ‘digitize’ their front office operations— the systems that touch the customer experience.

I'm here at Mobile World Congress in Barcelona, Spain this week and an idea struck me today that I suppose I should have seen before.

There have been countless examples over the past few years of over-the-top (OTT) service providers taking customer revenue and value away from the traditional providers. Companies like Skype, Apple, Netflix and YouTube consume tremendous amounts of bandwith on carrier networks but don't offer any real benefits to the carriers beyond any data usage charges they may have. The concern, rightly so to an extent, is that the OTT services are turning the telecommunications providers into 'dumb pipes' of data between two points across the Internet. They were continuing the debate here at MWC even yesterday.

Over the past few years the service providers have been responding with OTT-like services of their own in order to capture or retain some level of relevancy with their customers - anything to try and make their brand more valuable than a fast data connection. Some have even been pretty successful, especially those that were able to watch the mature market OTT providers first and see what worked and copy it before the OTT providers could (or were allowed to) mobilize in the lagging markets. Rogers One Number service enables users to dial and receive their calls and text messages on their computer, as well as switching in mid-call between the phone and the computer ala Google Voice. T-Mobile Bobsled is a pure OTT play that offers voice calling, group messaging with cloud synchronization ala Skype. Indonesia’s Telkomcel has gone one step further and created a special unlimited data plan offering that includes OTT WhatsApp messaging service.

But now we are seeing a move by OTT providers the other way - one that could be seismic in the future. The OTT providers are moving toward becoming full fledged telco 2.0 providers. I say telco 2.0 because their communications services are based upon IP data services and not traditional voice or sms networks.

Google Voice is now actually been at this a while having developed full fledged voice, messaging and voicemail services and made them available across most consumption devices in the US several years ago. And in the US they have started to roll out Google Fiber for broadband internet in selected markets - for free. More recently Facebook announced they would offer free voice communication services to its 169+ million users in the US and they just announced a deal with 18 providers across 14 countries to provide messaging services. And then there's Microsoft. Not an OTT provider you say? They are now that they have purchased Skype, one of the largest providers of OTT services in the world and a catalyst for most telcos when discussing OTT concerns. What you might not also know is that Microsoft has a history or investing directly in telecommunications including $1 billion investment in Comcast and a $5 billion investment in AT&T. Don't count them out to expand the potential of Skype by purchasing outright the ability to carry traffic, especially in non US markets.