Uber is analogous to fring, offering a better user experience and more choice, Genband CEO David Walsh has argued, part of Genband’s focus on development of over the top applications and business models carriers might be able to create.
“We believe that the power of community and the economics of exchanges, changes everything,” Walsh has said. Many would agree with that position.
The issue, so far, is whether carriers actually can do so.
At issue is less “capability” than sheer scale and the growing “winner take all” OTT market dynamics.
Recently, instead of “leaders” in any category of OTT apps or services, markets have tended to evolve towards a “dominant” supplier, with little room, or revenue, for second place or third place.
One might argue that unless any carrier federation is a “first mover” in a new category, leadership is unlikely to happen. That is not to denigrate intent, effort or skill, only to point out that “first to market with the best experience” also has to be matched with high word of mouth (social) adoption.
Success in the OTT app business hinges on network effects–huge scale–for success and monetization models. Carriers, especially federated carrier efforts, can achieve scale.
What is not yet clear is whether carrier apps can achieve scale in the new way: not by leveraging an existing base of customers, but by capturing the loyalty of an even bigger audience of non-customers.
Consider experience so far with Joyn, the carrier-focused platform for unified and rich communications. Though SK Telecom continues to push forward, KT and LG Uplus have ended their support.
In fact, some might argue that Joyn–the GSMA effort to create a market-viable Rich Communications Suite (RCS) ecosystem–already is “dead.”
Launched in 2008, what became Joyn was launched by Nokia, Ericsson, Orange, NTT DoCoMo, SK Telecom, Telefónica, and TeliaSonera, with the intent of creating a vibrant ecosystem for rich communications experiences based on IMS (IP multimedia subsystem).
Joyn was supposed to be the carrier answer to Skype, Viber, WhatsApp, and all the other OTT messaging and voice apps.
It simply hasn’t worked. And one might argue that lack of effort or skill is not “why” Joyn arguably has failed. Carriers simply were too late, competing against apps with high value and much more traction.
Genband is right that innovation is needed. Many of us would argue OTT is simply the way apps get created these days. But we still do not have a good example of a carrier-developed or carrier-backed OTT app that has achieved leadership in its category.
That is not to say such a result is impossible, only to note that, so far, it has not happened.
One reason is that some strategies–including all approaches other than “first to market”–risk losing in markets that tend to have a “winner take all” structure.
It remains true for all contestants in any ecosystem: moving up the stack is much harder than moving down the stack.
