The End of the World as We Know It?

“It is the end of the world as we know it,” says Chris Mairs, MetaSwitch (News - Alert) CTO, referring to by-now obvious trends in the voice business. Consumer expectations are that they will have flat rate, ubiquitous and free basic features. Translation: Voice revenues are destined for commodity feature status, says Mairs.

 

“Toll minutes long ago became a commodity and are vanishing,” he says. “For many users, landline telephones are history. Many will never own one.”

 

Mairs pointed to several disruptive events, including the release of an open-source high-definition voice codec, which will make Skype (News - Alert) more than application users run on their PCs.

 

“The other thing is Google’s (News - Alert) GoogleVoice announcement,” which Mairs says is “only the first of a series of enhancements.”

 

The upshot? “Voice revenues cannot be the future industry revenue driver.”

 

That doesn’t mean traditional telephony will go away. “But it will be part of a vibrant, multi-faced communications environment,” says Mairs. The big issue is what users will pay for.

 

“Even commodity items can be combined in ways that create solutions with substantial value and price tags,” Mairs notes. “For telcos, the analogy is pipes, plus voice, plus partners, creating value that can be monetized, where all the ecosystem partners benefit.”

 

But a big shift is coming. “Service and applications are a different business from pipes.” Access and applications now are becoming two different businesses. Make no mistake, Mairs says: “users will buy data pipes from an access provider, then choose the most compelling app to ride over that pipe.”

 

For traditional service providers, that means a few basic strategies exist. First, providers can embrace and extend popular end user applications, such as adding a text-to-speech feature. In other cases carriers might create or partner with third party developers to provide apps on their own.

 

Enabling third party solution providers is another approach. The business model here is that users pay one entity for access, and then other for apps. In some cases, this means one or multiple streams for an access provider.