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Networks go over the top to meet the enemy

For those in the communications industry a lesson: talk to each other

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MWC 2013 One of the things mobile network operators complain about most is how they have to invest in infrastructure while over the top (OTT) players are making all the money. So it takes a brave man to take part in a keynote when he’s one of those OTT pariahs. At the “Future of Communication” keynote that man was Talmon Marco, co-founder of Viber. He took to the stage with Deutsche Telekom CEO René Obermann, Ericsson boss Hans Vestberg and Suk-Chae Lee from Korea Telcom.

René Obermann, as well as talking about spectrum, regulation and unnecessary pressure on mobile termination rates laid out the over the top paradigm “You invest, we take the profit”, seen from the OTT company’s perspective.

He was just as vitriolic about goverments “Extra taxes are wrong and stupid”, and about how they auctioned spectrum. But then he didn’t have Neelie Kroes sitting next to him.

Hans Vestberg, and Mr Suk-Chae Lee gave conflicting stats on SMS traffic growing or falling, but blamed OTT for loss of revenue.

And it was against this that Talmon Marco started to explain about a small country where Viber is important. With echoes of tales from the keynote about connecting the next billion it sounded like it was a small African or Latin American country. He explained while it was small among the 175m global Viber users, over 31,000 people, 94 per cent of the population used Viber every day, and that country is perhaps not quite so poor. It is Monaco where people are rich and SMS is free. The reason they use Viber is because it’s cool and innovative. What he didn’t say is that that 94% comes from looking at the number of SIMs Monaco telecom has in use and the registered population of Monaco. Since many French people have SIMs it’s not all Monegasques, but why let statistics get in the way of making a point?

He argued that SMS is the same service today as it was ten years ago, and said that the reason Viber doesn’t support interoperability was because that would stifle innovation. That the only way to be agile was to be small and, bravely, since the panel session was to be moderated by the GSMA’s Chief Marketing Officer, Michael O’Hara, that the GSMA’s Rich Communication Suite and Joyn projects were years behind and not very good because it had been designed by a committee. He was only saying what we were all thinking.

Then Marco laid into carrier pricing, saying they deliberately had so many tariffs to obfuscate the costs, and that unless they partnered with the cool innovators they would become dumb pipes.

This led to the best debate we’d seen all week. O’Hara didn’t shy from asking the right questions. “Would Marco share” revenue. “Yes, future revenue for a high quality of service” said Marco and seeing as they have no current revenue, with no advertising and a promise that there will be none for existing services you have to wonder how the support the $200,000 a month Marco says it costs to run the Viber infrastructure.

Oberman said he’d be happy to deal with Viber on that basis giving a revenue share on a Freemium model as that’s what they do with Spotify, Marco saying he thought 30% was reasonable for carrier billing, although 30% of nothing is ...

And when O’Hara asked if Viber would pay for the data they were already using Marco was quick to demur.

O’Hara returned to the point of standards killing innovation, which Vestberg took up, and kind of agreed. But he pointed out that standards were what had got the mobile industry to six billion users and that as wonderful as innovation might be it had to happen on top of the standards.

Oberman agreed that it would go against company culture to develop in the way that Viber had, both technically and as a company. It might be possible but really being an operator was the wrong place to start.

And for the first time in a keynote this year it was as though the participants came away having actually learnt something. Perhaps what the GSMA will learn is that it’s not dangerous to ask the tough questions that O’Hara did, his confident performance made a contrast from the cowed sycophancy of the other moderators. ®

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