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WebRTC: a new game-changer, disrupting Telcos and OTTs

[Championed by Google, WebRTC allows browsers to make calls from your PC or phone - and it's disupting both telcos and incumbent VoIP players, from Skype to Viber. Guest author Tsahi Levent-Levi discusses Google's intentions and the trouble ahead for both telcos and OTT players.]

It’s been a tough couple of years for carriers (a.k.a. network operators) who have been fighting off competition from over-the-top (OTT) players such as Skype and WhatsApp, offering services such as voice and SMS over the carriers’ own networks. The impact of these OTT players has been astonishing – whether they’re nimble startups like Viber (with more than 90 million users, making over 1.5 billion calls a month and sending over 2 billion text messages), or large corporations such as Apple, whose iMessage  reaches 140 million users, sending 1 billion iMessages every day.

But now an even bigger challenge has appeared on the scene: WebRTC.

WebRTC is a technology that allows developers to build real-time communication into web pages. And it’s not just going to affect the carriers – it’s the OTT vendors who now face a real danger because WebRTC brings down the subscription walls of different OTT players.

Right now, when it comes to OTT services, if I want to communicate with someone in real time, there’s no way to do so without installing a piece of software – plus, you can’t connect across services, e.g. call a Skype user from Viber.

WebRTC is going to change everything

How? It places the ability to use VoIP applications within any browser as it’s going to be part of the HTML5 standard. You won’t need a Skype ID, phone number, email address etc. – it will all take place through the browser, you won’t need to subscribe to any service, and you’ll have Google to thank for it.

Google bought Global IP Solutions (GIPS), which provided and licensed voice and video media engines to anyone who wanted to develop a VoIP application (including Yahoo and Skype), reducing the effort considerably by offering the real-time multimedia parts of the application “out of the box”. Google didn’t stop at acquiring the technology – it is now using it to commoditize its competition in the communication space and drive browser sophistication even further.

Here’s what Google did

- Google created WebRTC by wrapping GIPS up with a set of Java Script APIs targeted at web browser developers, which means opening up VoIP technology to millions of developers.
- Google open-sourced WebRTC, under a permissive BSD license – this made the technology available to reuse, modify and create derivatives; taking it out of the control of real-time media engineers and marginalized competitors like Spirit-DSP
- It took the technology to W3C and IETF standards bodies for standardization to make sure it gets adopted and become an ubiquitous and common component in the browser, and in the process, removing any Google-centric connotations from the technology
- It ignored the signalling layer, allowing vendors to use WebRTC in any real time communication settings, regardless of the protocol used for signalling call setup

The strategy behind Google’s decision

This is a classic “economics of complements” strategy that is commonly used by Google and it’s about to change the entire landscape of communication services for both carriers and OTT players.

WebRTC is all about real-time communication from within the web browser, and it’s a crucial part of Google’s strategy because it reduces the barriers of developing rich communication applications by having legions of web developers exposed to WebRTC as a free technology. These web developers will take voice and video services into new domains with new use cases, expanding the richness of communication and making it easier than ever before to start your own VoIP service using WebRTC.

For Google, this decision is simply about strengthening the Web and the web browser to reduce the gap between native application capabilities, whether they’re on the desktop or in the mobile realm. The real value for Google lies in allowing them to serve more ads and mine more insights out of people’s browser behavior – these are things that Google treasures. Such a move can weaken Microsoft along with its Skype acquisition and hurt Apple’s FaceTime service.

The usual OTT business model

OTT vendors base their strategy around reaching as many users as possible, offering them a compelling free service, locking them into it and then trying to monetize it via four main approaches:

  1. Advertising, done by ooVoo, Skype and others
  2. Connectivity to PSTN (Skype make most of their money out of connectivity to PSTN and the carrier’s phone numbering scheme)
  3. Value-added services, such as multipoint video calling; (done by ooVoo)
  4. Cashing out upon acquisition (which is what Viber is hoping to do)

OTT vendors make their money out of mass usage of their system, and for that, they prefer having users work within the boundaries of their service, and not letting them interact with competing OTT offerings: (Just try calling from Viber to Skype. You can’t.)

Goodbye, walls – hello to a new way of communicating

WebRTC literally tears down the silo’ed walls of OTT vendors by removing the need for a physical client for each OTT vendor and for an OTT user ID (such as your skype ID or email address). Since there is no specific signaling, each vendor can decide whether (and how) to use user IDs.

It will change the way we communicate, for example:

- Think of a local insurance agent in Paris looking to lure new customers: he sets up a website, invests in AdWords to bring leads into his sales funnel, and then routes these leads to a contact page – or a phone number. With WebRTC, he can close the loop and have the person at home access his website and contact him directly from the web browser – to wherever the insurance agent is. No OTT vendor required.
- Or a niche social network website for backpackers, trying to connect people planning a trip with one another. They won’t need to exchange user IDs or phone numbers, or install anything – with a click of a button they get connected through the social network website itself.

There are already startup companies offering services using WebRTC. These include Bistri, Cloudeo, FrisB, TenHands and TokBox.

As with the current web paradigm of signing in for new services using existing social media accounts, many of the new vendors who will adopt WebRTC technology will also opt for that model, removing the need for a unique service ID.

And what about the carriers?

Is WebRTC a threat or an opportunity? Well, it’s both – it just depends what the carriers do with it.

It does mean that carriers face further disruption to their communication services but in parallel, there are also sizeable WebRTC opportunities. However, in order to seize them, carriers will need to embrace the web developer community and deliver value to WebRTC-based applications and services, curving itself a place in this vibrant ecosystem. Web developers are already looking for WebRTC solutions they can stitch and mesh into their applications. Carriers can actually become a vehicle for innovation vehicle by offering:

- Session-based charging for WebRTC. As with any carrier service, they can charge customers for the WebRTC sessions they make: WebRTC communication passing through the carrier’s network can be tracked (through DPI and other means) and then charged for, probably against a bucket of minutes/sessions in the customer’s plan.
- Merging RCS with WebRTC. RCS (also known as Joyn), is the carriers’ instant messaging solution. By adding WebRTC to RCS, it can offer out-of-the-box programmable multimedia capabilities with no need to look into additional protocols such as VoLTE.
- Quality of service assurance. Need the police? Other emergency services? A business-related call? A carrier can assure the quality of service for that call and make sure it gets the proper priority over its network (at a cost, of course…).
- Infrastructure. WebRTC is just a protocol – making a solution out of it requires a lot of additional components, most of which are server-side. A carrier can offer the server-side infrastructure as a service to customers.
- PSTN connectivity. Carriers have their own existing voice communication network, along with connectivity to PSTN landline services. They can offer WebRTC termination to PSTN and GSM, bridging the gap between these voice services.
- WebRTC signalling. WebRTC offers only the media component with no signaling and you still have to reach a person via WebRTC (which is where the carrier comes in – it provides the connectivity for the users).

As much as they might want to, carriers are never going to be able to return to the golden revenue days before OTT players arrived on the scene, but WebRTC will allow them to stop the trend, (and maybe even reverse it a little bit), depending on how fast and how far they’re going to act. AT&T, T-Mobile, Deutsche Telekom and Orange are all examples of major carriers who have been quick to recognize and start to investigate the opportunities that WebRTC presents. The question is… how long will it take for others to follow?

  • Telecom well-wisher

    Compelling story Tsahi. You may be overestimating the short term impact of WebRTC and underestimating the long term threat to traditional Telecom.

    WebRTC like any new technology has growing pains, Microsoft (IE) and Apple (Safari) are not on board. MS wants CU-RTC-Web and Safari would rather stick with Facetime. Google is building plugins for these browsers, so its not really browser native execution. The codecs are not settled yet.

    Google extended an olive branch to Telcos by keeping signalling layer out (rather than sticking to REST of XMPP in the standard). But Telcos need to implement compelling javascript frameworks/SDKs for developers to use Telco's signalling layer. The Telco offering will have to compete with Google's javascript frameworks and SDKs on usability and price. Google has already implemented a signalling layer using App Engine Channels framework. Cisco and Skype will eventually provide SDKs and frameworks for the signalling layer. Furthermore, phone numbers are not required for signalling layer.

    So Telco webrtc signalling plane offering needs to compete by winning the hearts and minds of developers and their wallets over Skype's and Google's signalling plane offering.

  • Telecom well-wisher

    Couple of more comments:

    WebRTC can be used to build an RCS-type app for browser, but I disagree that it will obviate VoLTE. VoLTE is much more than VoIP. It can provide guaranteed bit rate for voice and video and seamless mobility to circuit switched voice and that's not webRTC.

    As for QoS, this has been a long standing argument of Telcos (almost a cliche) but lack of QoS has not hindered services like Skype, Viber etc. and Telcos have not implemented QoS widely yet. I agree that QoS could enable services like HD video conferencing and low latency gaming on bandwidth limited mediums (like wireless) and Telcos that provide pay-per-drink QoS will be more appealing to developers building such apps. QoS should be sold to app-developers and not end-users because it only impacts user experience for specific type of apps.

  • Leon

    Again, convenience is the name of the game. business voip systems providers better come up with something to match this new development. I'd hate to see something that's gained so much steam quickly lose momentum just as fast.

  • http://www.cygnismedia.com/mobile-phone-application/iphone-application.html cygnis media

    In Middle east countries where business voip systems provider are ban is very difficult for business there , they have to mange with high cost of telephone services.

  • http://www.itechwhiz.com Apple News

    Compelling story Tsahi. You may be overestimating the short term impact of WebRTC and underestimating the long term threat to traditional Telecom.

  • http://www.squidoo.com/sexy-games-for-couples Lester Gym

    Very curious how this will play out Tsahi. I guess we'll see aobut that in the near future. I'm betting on Skype becoming really really big.

  • http://www.ringcentral.com/small-business-phone.html small business phone

    WebRTC has its own potential of making a big hit in many users because of the good features that the app can offer.

  • http://www.visionmobile.com/blog/2012/09/webrtc-a-new-game-changer-disrupting-telcos-and-otts/ Traffic Tim

    reducing the effort considerably by offering the real-time multimedia parts of the application “out of the box”??

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