The US market is at the center of communication service evolution with traditional carriers, retail brands and Silicon Valley app companies all competing for market and technological supremacy. Here, Daniel Kurgan, CEO of international carrier services provider BICS, explains the unique dynamics of the US market and the trends the company is seeing from its customers across all of these segments.
The international communications market is a fascinating and constantly evolving industry filled with innovation. Nowhere is this more evident than in the USA, where Silicon Valley’s finest are competing to provide mainstream and new app-based services traditionally offered by the likes of Verizon and AT&T. Simultaneously, traditional wireless providers are looking to provide value added services and complete the move to enhanced IP-based services, and a plethora of new MVNOs are entering the market based on popular retail brands and price-led propositions.
It is a market where only the strongest will survive, and each segment of communication players must address their own unique challenges to ensure they win or retain the market share to meet their business objectives.
Dominated by two market needs which can be categorized into MNOs (mobile network operators) and digital service providers, the US proves to be an exciting testing ground for new providers with unique business models. Around 90% of app-based communications providers operate out of Silicon Valley and are now engaging with mainstream telecoms infrastructure companies to expand both their physical footprints and their technical capabilities.
MNOs have had to upgrade their networks due to technological advancements, LTE growth and the role of big data. They now offer their subscribers enhanced services such as high speed data and high definition voice (VoLTE), which set an example to the rest of the world on how to keep customer engagement intact with the new service offerings.
Digital service providers on the other hand are cashing in on the growth of end-user reliance on smartphone devices for online activities. These often require identity validation and authentication via SMS or voice communication channels to avoid internet frauds over app downloads, mobile transactions, and so on. This is especially evident with those who are looking at new business models such as sponsored data – where users are offered free data to be used on a specific service – and those providing services in countries where regulation requires access to identity management services.
Telecoms industry analyst house Analysys Mason predicts that by 2020 the identity management services market will be worth $9.4 billion. This will in part be driven by requirements from Valley app companies to verify the identity of those using their services both in heavily regulated markets and more widely for their own business objectives. Many of these Internet companies will need to engage with traditional wireless infrastructure providers to enable these and other services to improve their customer journey.
International carrier services providers, such as BICS, have been engaging with these companies for some time: providing international capabilities, and enabling services which require more robust infrastructure than they already have access to.
Moving communications into the next generation
The rapid growth of these Valley players would never have been possible without the significant investments made by carriers around the world in making the ‘internet everywhere’ dream a reality. Not only is domestic 3G and LTE available throughout the States, but now customers of all of the major US networks can enjoy high speed data roaming while visiting more than 125 countries around the world, including all of the world’s major holiday destinations.
This footprint has grown simultaneously with strong smartphone penetration seen across the world since the iPhone launch in 2007. Following the development and roll-out of truly international LTE, the next major step is the widespread deployment of higher-definition voice services. In the US, this has taken the shape of VoLTE, which is currently being rolled out by carriers across the country.
VoLTE (Voice over LTE) offers the same leap in quality from standard voice as data services received when LTE replaced 3G, and promises to offer the same boost in usage carriers saw during this transition. In regions where app companies are gaining traction with IP voice services it is vital that carriers accelerate this roll-out and truly make the most of their significant investment in next generation voice.
VoLTE stands out as the highest quality HD voice service, offering low-frequency LTE spectrum usage, which enables network efficiency and reduced operational expenditure for mobile carriers. As usage increases in line with the availability of supporting devices and wider network availability, VoLTE will be made available for roamers and those making international calls. This promises to provide increased revenue for traditional carriers as they look to boost usage of voice and maximize the economic advantages from their technological investment.
To achieve this ubiquitous international service, however, requires significant research and interoperability testing. This is currently being undertaken by BICS in association with carriers around the world.
Following multiple, wide-ranging trials, the use case for international VoLTE interworking has been successfully proven between Europe and Asia and means not only will users across launch markets have access to high quality voice service over an LTE network, but general mobility will increase too, enabling services to be used on any device, over any access network, be it 3G, 4G or Wi-Fi. This technology is now being perfected for the US and other markets and will be available in due course.
VoLTE is only the start of the technological innovation that will drive the industry forward during the coming years with the scene now set for wider RCS (rich communication services) launch including group chat, video calling, instant messaging and file transfer services. RCS is a carrier-led initiative offering rich and simpler communication services which are interoperable with all other operators both domestically and internationally, providing the same level of ubiquity as voice and SMS.
This technology has also been embraced by Valley players such as Google with its purchase of Jibe at the end of September 2015. The acquisition further indicates how OTTs are interested in integrating telecom carrier-led next generation communication services.
Both VoLTE and RCS will bring the next stage of all-IP era communications to the commercial marketplace; offering ubiquitous, high definition services with a robust fall-back onto legacy technology as and when required.
In the US market, next generation services are revolutionizing communications services for operators, Valley app companies and end-users alike. The increasing demand has been driving service providers to ensure they have implemented local presences to target their current customers and potential new business and boost their income revenues where possible.
If these technological developments are fully embraced, and supported by carriers providing reliable backbone infrastructure, operators are able to bring the next level of communications to the market place and provide a new level of customer experience to subscribers, increasing usage and profitability.