Voice and messaging are the mainstays of telco revenue today yet there are still opportunities to grow the value of these services using innovative business models. At the 7th and 8th Telco 2.0 Executive Brainstorm in London and Orlando, two thought-provoking presentations provided concrete examples of embedding voice and messaging into business process for SMEs (so called ‘Communications Enabled Business Processes’ – CEBP) and proffered ideas about how telcos can turn these into significant revenue streams.
Below are videos and analysis of presentations on:
– ‘Cooking with Voice’ by Thomas Howe of the Thomas Howe Corporation,
– Telco Applications in the Clouds by Irv Shapiro, CEO IfByPhone
Cooking With Voice
Thomas Howe develops around six voice applications a month for enterprise clients and, speaking at the 7th Telco 2.0 Executive Brainstorm in London in November, called on the telco industry to monetise their data to reinvent voice services.
(NB We will shortly be publishing a detailed Executive Briefing by Thomas, describing detailed Voice and Messaging Use Cases, both for customers of our research subscription service and sale as a standalone report.)
Voice is a Spice
He equated voice to a spice in that in the enterprise application world it isn’t a service in its own right but a feature that can be used to enhance a process. As an example he related the experience of Mercedes Benz when it added a simple click to call function to its corporate website.
As a result of having data about where the customer was calling from and which web pages he had previously been to, sales conversions doubled from 10% to 20%, call abandonment was reduced and the average selling price increased.
Monetising Hard to Replicate Data
It wasn’t about the voice call per se; it was about putting the call together with information that was relevant to the call and valuable to the corporation and that is worth paying for from the corporation’s point of view.
Monetising such hard to replicate data by combining it with voice is where telcos have a great opportunity to grow, said Howe.
There are many areas where only telcos can deliver voice and have the information that will add value to the call, such as authentication, location, even availability.
Location, Location, Location
Telcos may have lost the lead with location in consumer apps but there are many examples of where location information in conjunction with voice or messaging could be monetised for businesses large and small. Examples cited included simple business process integration to automate a call to confirm a person is home to receive a delivery, to more complex notification of the need to leave for an appointment based on an individual’s location and the distance they are from the location of the appointment.
These and many more are highly valuable to businesses as they can save them huge amounts of money, primarily by cutting back on wasting time and resources.
Identity authentication could become another major growth area when combined with voice, according to Howe. The authentication of a caller is something that is highly valuable to a whole host of businesses. By adding location, phone identity and perhaps additional applications such as voice analysis, finger print readers or iris scanners on phones, a telco could verify a caller is who they say there are for banks, government departments, schools etc. This links closely with the work Telco 2.0 is engaged with on customer data and privacy which is discussed in Customer Data and Privacy 2.0 – Telco Goldmine?
Telco Applications in the Clouds
Speaking at the 8th Teleco 2.0 Executive Brainstorm in Orlando, Irv Shapiro, CEO of IfByPhone, claimed to be an outsider to the telecom industry. He then proceeded to demonstrate how his company was monetising telecom’s primary services, voice and messaging with 2.0 applications. He even suggested how telcos could do the same – not bad for an outsider.
Stop Analysing and Start Doing
Shapiro said that telcos are in real danger of suffering from ‘analysis paralysis’ in the face of declining margins from voice and data. They need to start to act to find alternative revenue streams and he used examples from his own business to demonstrate how the value of voice and messaging could be reinvented.
Telephones as New Access Devices for Apps
Rather than iPhones and app stores, these applications involve the integration of voice and messaging into business processes to improve the efficiency of SMEs. The technology for this is based in the cloud and works by automating phone calls for SMEs in three lines of business.
Do-It-Yourself App Building
The first comes from providing a web portal through which SMEs can drag and drop voice and messaging functions to configure their own apps into business processes. There is no requirement to integrate the applications for the SME as they do it themselves but the clever and monetisable part provided by IfByPhone is in hiding the complicated work required to allow the drag and drop capability.
Diabetes America is a user of the service and used the web portal to replace its outsourced call centre costing $400,000 a year, with an IVR app and six people in house, amounting to a saving of $240,000. IfByPhone now charge them $1500-$2000 dollars per month, which may sound low given the savings but equates to a 70% gross margin.
The other two revenue streams for IfByPhone come from outbound customer notifications and click to call capabilities where a click on a website triggers a phone call.
Savings, savings everywhere
Go Configure, a company that builds flat packed products for customers in their own homes, provides a typical case for the value of automated notifications. They spend $1500-$3000 a month with IfByPhone to arrange appointment times, a process previously conducted by secretarial staff and taking an average of five calls per appointment. The change has saved them $70,000 a year.
The value of Click to Call applications was previously referred to by Thomas Howe.
Currently, telcos either benefit from this as wholesale sellers to IfByPhone or as partners if they have the relationship with the SME. However, an even bigger opportunity could exist if telcos could turn PSTN phone numbers into SIP addressable end points, said Shapiro.
If that were the case then telcos could charge for the initiation and for connecting to those end points. In some ways this is similar to receiving party pays cellphones in the US or international roaming where both the sender and receiver parties pay. However it doesn’t have to be a sender and receiver, it could be the sender who pays twice, if the application is valuable enough. He challenged the telco industry to boost the PSTN in this was and then encourage app developers to create apps that would drive traffic to those end points.
It’s Voice Jim – But Not as We Know It
Seemingly all that remains for simple voice connections is a race for the bottom of the voice market. However, voice remains a core service and a core asset to the telco and one that has significant potential to be monetised in combination with other telco assets.
Take Howe’s Spice analogy a stage further and say voice isn’t a spice but salt, something that enhances the flavour of everything it is combined with. In order to build new revenues streams from voice telcos need to combine voice with other functions in order to create a service whose value has nothing to do with call time and distance.
Would You Like Voice With That?
The examples cited by Howe and Shapiro demonstrate that for the business community that value is huge. Similarly the number of potential customers for such services is limited only by the number of businesses. However, it will be impossible for telcos to sell individually tailored services to all of these. They must pick their targets carefully, create platforms that make adding voice to a business process as simple as adding fries to a fast food order and encourage app developers to see voice as an essential part of the developer portfolio.
It will also require the development of business models based on direct, partnership and wholesale routes to market and Shapiro’s suggestions for boosting the PSTN are food for though, although need working through with real use cases.
Voice 2.0 will be a more complicated proposition than its predecessor but it has the potential to be highly lucrative, and highly valuable to its customers.
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