Part 1 of this multi-part Summary of TC3 provided highlights of the Service Provider Innovation Forum held on September 12th. This second piece examines the panel session on Rich Communications Suite (RCS) and (more importantly) selected carrier innovation agendas, strategies and case studies. The third article will look at telco innovation suggestions from market research firm Informa and what carriers are looking for from partner companies/start-ups to help them accelerate their innovation agendas.
Entrepreneur Forum: Next-Gen Communications – RCS:
The Entrepreneur panel session on Next-Gen Communications was all about Rich Communications Suite (RCS) – a buzzword that this author had never heard of before.
RCS is a unified communications service for smart phones that will be built on top of IMS (IP Multimedia Services). From the end-user point of view RCS would enable communication such as instant messaging, video sharing and buddy lists. These capabilities would be available on any type of devices using an open communication between devices and networks. The topic seemed to be of interest to many 3G/4G cellular carriers I talked to at theTC3 event.
Here is the abstract from the Telecom Council’s TC3 Program Guide:
“For years, the telecom industry has tossed around various futuristic concepts for converged communications such as Unified Messaging or IMS, but little emerged. Essentially, the networks were not ready, latencies were too high on 3G and older cellular technology, and there was too much circuit-switch legacy that needed to be protected. But now, new infrastructure has turned the tide, and RCS (rich communications suite) is coming fast.
RCS is about enabling the customers to communicate as they want, anytime, from any starting point. It enables sharing media, sharing experiences, and including more people than classic circuit-switch telecom could ever provide. This field is populated by major telecom vendors, big OTT companies like Skype, FB and Google, but also upstarts like Kik and new startups by the likes of Sean Parker (Napster/early Facebook investor) or Rob Glaser (RealNetworks). This discussion will explore the roadmap for RCS solutions, both technically and on the business side, and we will focus on the opportunities for innovation and entrepreneurs.”
Author’s Note: RCS has nothing to do with 3G or 4G mobile broadband infrastructure (access or backhaul), which is assumed to be in place for RCS to thrive and flourish. It is effectively a new higher layer protocol that runs on mobile devices.
Carrier Perspectives and Case Studies:
1. Anne Louise Kardas and Kim Galbraith of Sprint described the (mostly wireless) carrier’s innovation business model: find 10 ideas that will either make or save the company at least $10M for each one. Sprint likes to work with round B or C startups that are significantly funded to achieve their innovation agenda. The Sprint partnership model was said to include IT, network equipment, apps, software and services. They want to address the challenges for distributing solutions out to the marketplace. Specific focus areas are: e-commerce, M2M, mobile health, security, BYOD (Bring Your Own Device) and video. They have defined an opportunity funnel which encompasses the following procedures: discover, review, analyze, evaluate, development, and commercialization.
2. Matthew Key of Telefonica Digital (this global business is headquartered in London, rather than Madrid or Barcelona, Spain) was quite specific in detailing his company’s areas of interest:
- Comms 2.0: video, messaging, Over the Top (OTT) voice & video, voice recognition, contract list management and WiFi offload.
- M2M: smart mobility, smart metering, industrial telemetry
- Mobile Commerce: mobile payments & wallets, POS terminals.
- Security: network, devices, child protection, Identity as a Service.
Telefonica has a venture office in Mt View that’s pursuing global partnerships with startups. The telco has reorganized the entire company to emphasize innovation. They have two R&D arms: Commercial & Consumer as well as the CTO office.
An example of “pre-emptive inclusion” by Telefonica was the launch of an OTT voice service over their own network infrastructure to retain customers. This was provided by JahJah– a VoIP company Telefonica acquired with R &D center in Tel Aviv, Israel.
3. Stephane Allaire of Bouygues Telecom (France) and David Fraser of Devicescape participated in a Carrier Case Study. The purpose of the case studies was to showcase successful examples of startups making deals with carriers. While not at all easy, it gives the startup company immediate scale and a large, well established market to sell into.
Bouygues claims to be the #1 telecom ISP in net new connections for the 2011 calendar year. Their call for innovation encompasses five areas: LTE apps that provide a good customer experience, digital home (integrate data, pictures, music and videos), differentiators & disruptions, and cost savings solutions.
Mr. Fraser said Devicescape was focused on helping mobile operators handle the mobile data explosion via WiFi offload. His company’s dynamic WiFi integration technology includes: intelligent cloud, offload network, cloud based QoS, and analytics as a service. Devicescape claims they achieve the industry’s highest percentage of offloaded mobile traffic by placing the intelligence, management, and control in the cloud, not just in the client software. The Devicescape Offload Network is called a Curated Virtual Network (CVN), which consists of qualified hotspots deployed worldwide. This CVN was said to manage authentication, Internet access, service quality, availability, location and provide analytics to their carrier/WiFi hot spot customers.
4. Daniel Zhao, Director of China Mobile’s U.S. research center, described the operator’s Open Mobile Platform for developers. It consists of an app engine (a hosting service similar to Amazon’s), an ‘enabler’ engine (tools such as billing and payment software) and a development environment.
5. Thomas Neubert of Deutsche Telekom (DT) explained how DT became engaged with Lookout-a mobile security company. Tim Roper, president of Lookout participated in this session.
6. AT&T’s Foundry (AT&T’s Innovation Labs in Palo Alto) works in 12-week cycles, usually hosting 40 to 50 projects at a time, said Aaron McDaniel, Senior Director of strategy. Brian Woods of OpenPeak, developed their product with AT&T’s assistance.
7. In a Carrier Case Study, Gabriel Sidhom, Vice President of Technology Development at Orange (formerly known as France Telecom or FT) and Ash Damle, CEO at MEDgle were interviewed by TC3 Chairman Derek Kerton. Mr. Sidhom participated in last year’s TC3 where he convinced the audience that Orange is serious about innovation and working with start-ups. This year, he and Mr. Damle were talking “eHealth.” MEDgle has put together a big data analytics platform that functions as a medical/health care search engine. It’s focused on redefining human health, with about 130 million data points, cross-connecting about 20,000 symptoms and signs, diagnoses, age, gender, duration, lifestyles, etc.
8. John Hayduk, President, Product Management and Service Development of Tata Communications (one of India’s largest telcos) is responsible for providing the technology vision and leadership needed to support Tata Communications’ network and growth of managed services. He said his five innovation priorities are: hardware, video, unified communications, the customer experience, and (big) data analytics.
9. Jean-Marc Frangos, Managing Director of External Innovation at BT, said he’s looking for new services that will drive the use of fiber, breakthroughs in IPTV (or at least in its cost structure) and technology for hybrid clouds. Mr. Francos is especially interested in enterprise tools but wasn’t specific. He said: “I’ve been waiting for a really good collaboration tool for about 10 years now, and I’m still waiting.”
10. The concluding TC3 Carrier Panel featured panelists from venture capital divisions of prominent carriers. These included: Verizon Ventures, Vodafone Ventures, VP of Innovation at Swisscom, Venture Advisor at DoComo Capital, SingTel Innov8 Ventures LLC, and Rogers Venture Partners. A corporate VC division was seen as an effective tool for these global carriers to cultivate, nurture and enhance innovation within their organizations. These carrier VCs are all competing for great startups (mostly in Silicon Valley or SF Bay Area, but others in Israel, e.g. wireless and throughout the U.S.). They are looking for strategic relationships and value added services from start-ups.
Swisscom said they were looking for help in four areas for which they act as “gatekeeper.” These were: Real Time Analytics, Security, Identiy management, and Privacy controls.
Several investments – from turn by turn directions to MOCA chips and NFC were disclosed by Verizon Ventures and followed by similar stories from other carrier VCs.
In response to a question from this author (echoed by a representative from NSN), Daniel Keoppel of Verizon Ventures said Verizon was interested in three specific areas of improved or new network infrastructure:
a] Coping with the mobile data deluge: small cell sites, mobile backhaul, optimizing wireless traffic, and reducing requirements for obtaining additional licensed spectrum.
b] Software Defined Networking (SDN) and Open Flow protocol (which partitions and segregates the control and data planes within the network).
c] Cloud based services (Mr. Keoppel didn’t specify what these might be).
Mr. Keoppel raised a dissenting voice among the chorus of love for WiFi offload. Without explanation he said, “WiFi offload is NOT a great solution for the user, except for certain environments.”
“There’s a ton of stuff being done to improve the carrier’s network,” Mr. Keopell concluded.
Editor’s Note: While this author strongly disagrees with Mr. Keopell’s assertion, that’s the subject for a whole other article and discussion or argument, depending on your point of view.
TC3 chairman Derek Kerton believes there has been quite a lot of innovation and improvements in carrier networks – not by startups, but rather the very large network equipment vendors (Ericsson, Huawei, Alcatel-Lucent, Nokia Siemens Networks (NSN), ZTE, etc). He wrote in an email: “Carriers look to Alcatel-Lucent, Nokia Siemens, Ericsson, Huawei and that ilk to improve hardware, systems, and core network infrastructure. This innovation certainly occurs, as these vendors compete ferociously in their highly competitive sector.
The innovations that this sector has sold to carriers includes: small cell infrastructure, Heterogeneous networks, IP to Circuit-switch handover, remote electronic tilting antennas, Self Optimizing Networks, MPLS, Core IP infrastructure, Fixed mobile convergence and UMA, Wi-Fi offload, 3G, HSPA+, LTE, WiMAX, Emergency broadcasting, E911 and location platforms, OPEN API platforms, M2M systems, new billing solutions for family plans and shared data and prepaid, fiber backhaul, point-to-point wireless backhaul at 60 and 80GHz, etc. On the fixed side there have been numerous advances like Coarse Wave Division Multiplexing, FTTH, FTTC, in home distribution like MoCA or Phonline, DAS, and faster and faster broadband services.”
“This year TC3 event capitalized on having 20 different carriers available to participants by putting them on the stage to explain what they want from entrepreneurs this year,” said Liz Kerton President of the Telecom Council of Silicon Valley. “Our carrier members are happy to share their external innovation programs with these hundreds of entrepreneurs, because it makes their jobs of finding new startups easier,” she added.
Stay tuned for part 3 of this year’s TC3 Summary. In the meantime, please comment in the box below this article or email the author at: email@example.com