Editor’s Note: Welcome to our weekly Reality Check column where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
As the mobile industry gears up for one of the biggest events of the year, the industry is buzzing about what new technologies and innovations are going to surface at this year’s Mobile World Congress. One key theme is indisputable – in today’s dynamic mobile ecosystem, over-the-top messaging dominance is still top-of-mind for operators feeling the OTT impact to their revenues. In fact, the hardest hit market and possibly most affected by OTT are European mobile operators, who will likely be forced to cut their workforce by 30% over the next five years, according to the UNI Europa ICTS union.
In the midst of mobile operator uncertainty, new standards and technologies like Web real-time communications and voice over LTE will be hot topics at MWC as operators discover new ways to regain their footing. We’ll also see the big players like Facebook and Google continue to roll out enhanced mobile offerings to meet the needs of the mobile consumer. Mobile security is also expected to be a major theme at this year’s show as user demand for personal data protection on individual accounts increases. Business leaders will look for solutions at MWC that offer reliable security and can also be easily integrated into their existing infrastructure.
While at MWC, I expect the following key trends to emerge:
WebRTC accelerates the mobile ecosystem and creates opportunities
Supported by Google, Mozilla and Opera, WebRTC is an emerging standardized function that enables real-time communication using a web browser without the need to download plug-ins, simplifying the process for Web developers to integrate OTT voice and video into their sites. In doing so, WebRTC acts as an accelerant, speeding up the growth of OTT and putting mounting pressure on the GSMA’s RCS standard.
According to a recent survey conducted by Mobilesquared, 36% of operators are uncertain of the impact Joyn will have on their ability to remain competitive with OTT players. The international survey polled more than 40 mobile operators and mobile virtual network operators around the world, revealing that only 7% now believe Joyn is a viable solution to combat the threat of OTT voice and messaging services such as Skype, Facebook and its newest acquisition of WhatsApp. With WebRTC fast-tracking the growth of OTT, pressures are intensifying on operators to innovate and monetize. At MWC, we can expect to hear conversations about the opportunities, potential monetization models, and benefits for those who choose to integrate WebRTC in their offerings.
VoLTE will give operators a competitive edge
With the increasing consolidation among European mobile operators, it’s only a matter of time before industry changes swallow operators who continue to sidestep OTT partnership opportunities. In an attempt to recover lost revenue, many operators will flock to VoLTE, a standards-based technology that supports VoIP calls over the LTE network. LTE continues to influence the mobile networking landscape and operators are quickly discovering just how capable the technology is at helping them compete with OTT.
By uniting voice and data value chains for mobile operators, VoLTE allows operators to increase internal efficiency by moving voice off of old networks to data apps. By doing so, operators combine separate spectrum channels to create larger channels and faster wireless services. Leveraging operators’ competitive differentiator – connectivity – VoLTE will allow operators to deploy more quality voice and video calls, along with superior messaging capabilities by linking directly to phone numbers.
In the coming months, we’ll see an influx of operators roll out VoLTE devices to help cut their operating costs and compete with OTT applications on quality. Look for VoLTE benefits to be a hot discussion topic since the technology won’t be exclusive to just operators – VoLTE will be available to OTT players as an enhancement to their offerings.
Everyone will get in on OTT messaging
Last year was a banner year for the mobile industry as companies increasingly looked to improve the mobile experience for end-users. Throughout the year, we saw several of Silicon Valley’s elite players increase their stake in mobile with various rollouts of mobile messaging capabilities. For instance, Apple iMessage, Google Hangouts on Android phones, Instagram Direct and most recently Facebook’s acquisition of WhatsApp. This year’s MWC will be no exception and will be buzzing with the recent acquisition news.
The appeal of OTT messaging apps is that Internet players can link phone numbers to online accounts, enabling users to communicate with the entire network via their mobile application. As a result, the reach of messaging capabilities provided by these applications crushes those of traditional offerings provided through mobile operators. Despite operator’s best efforts to keep messaging revenues alive, messaging apps like WhatsApp have become ubiquitous, handling up to 50 billion messages per day, according to the company’s recent statements at the DLD conference. In Barcelona, Spain, we can expect OTT to continue dominating industry conversations.
Lots of buzz around two-factor authentication – adoption rate will reach 50% in 2014
Hackers had a busy year in 2013, reportedly breaching over two million accounts on various websites including Facebook and Twitter, according to analysts at Trustwave. With mobile devices becoming a prime target for hackers, security will be a major theme at MWC as Internet companies and application providers look for authentication solutions to protect user information.
Today, traditional password approaches are losing confidence among users, and SMS-based two-factor authentication is gaining steam as an effective tool in combating security breaches especially in key regulated industries where financial transactions or user identity is authenticated. In fact, this type of authentication technology is anticipated to experience a 50% adoption rate globally in 2014. Banking, online retailers and companies dealing with monetary transactions will be the markets driving the most growth for 2FA because of the need to protect transactions and personal data. This year’s MWC will certainly see the effectiveness of 2FA and look to future enhancements like real-time location identification to give users a means of authenticating their identities and completing transactions.
Year after year, MWC earns its reputation as the industry’s premier gathering place for the brightest minds to launch the newest mobile technologies, inform standards and regulation and inspire trends for tomorrow. The introduction of new European Union roaming regulations will bring their own fair share of challenges and debate at the show. And, OTT providers and operators around the world will look to experts and analysts at MWC to help inform their decisions with a focus on innovation. I expect this year’s show to be the liveliest to date as mobile continues to surpass and surprise.
Thorsten Trapp is the co-founder and CTO of Tyntec. He is a highly regarded mobile industry expert with over 30 years’ experience in the space.
