9/10/2017 Amazon torpedoes telephony. So where are the new telco products?

Martin Geddes Follow

Humanistic technophilosopher
Oct 7 4 min read

Amazon torpedoes telephony. So where are

the new telco products?

Amazons announcement of the death of telephony, sorry, launch of Alexacalling

Theres a big talk about the IP transition for the PSTN, and how telcos
are going to invest loads of money in replumbing their vertically-
integrated voice services for the 21st century. I have a strong feeling
that fate is going to turn those investments into stranded assets.

The arrival of over the top VoIP and its e ect on telephony margins is
very old news. I started blogging about it in 2003, and made a minor
living in 20045 consulting on the rise of players like Skype and what
to do about it.

We are now at a new in ection point. Whereas the rst wave of over
the top voice was about delivering a telephony substitute, the next is
about completely replacing telephony.

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9/10/2017 Amazon torpedoes telephony. So where are the new telco products?

Your kids already regard anything without a touch screen as broken,

and anything without that capability is an abandoned legacy interface.
SMS isnt a better morse code, and telephony is now the morse code of
talk. No amount of network engineering is going to make a telephone
into an acceptable communications experience for future customers.

Amazons Alexa is growing at a startling rate, and is one of the fastest-

adopted consumer technologies in history. I am not an analyst I write
no reports, attend few conferences, and never listen to a single droning
PR brie ng so you will have to dig out the statistics for yourself. The
trend is beyond obvious.

The coming of machine intelligence, voice recognition, personal

assistants and more has been foreseen for a very long time. The growth
of online identities anchored in non-telco worlds (Google, Facebook, et
al) is also hardly news. The idea that the PSTN system of telephony will
continue to dominate voice communications forever is fantasmagorical
nonsense.

I and my start-up colleagues at Just Right Networks are busy setting up

the commercial launch of quality-assured cloud application access. The
technology has been around since 2007. I wrote about it in 2008 for
Telco 2.0 when I was Chief Analyst. (OK, I am a bit analystish)
Technology is not the barrier to telcos building new cloud-ready access
products. We dont need expensive parallel networks just for voice.

You have to ask yourself: why is there not a single new retail or
wholesale product (and fresh revenue line) out there to support and
integrate with Alexa? How has this whole industry entered into total
denial that the application action has all shifted to the cloud players,
and telcos are just their truckers?

Because the disruption thats coming is going to be big and ugly.

Telephony is the original (and presently best) form of shared virtual
reality. But many more forms of shared virtual communications spaces
are going to arrive. And you wont be dialling them.

It is companies like Amazon that are going to tie them to their cloud
commerce and communications platforms. They will supply the
identity and trust systems. The terminals will be ambient, worn and
embedded. And all this will need some kind of t-for-purpose data
transport.

The end result is going to be that companies like Net ix, Microsoft,
Amazonand Google start to put their own equipment into telco

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9/10/2017 Amazon torpedoes telephony. So where are the new telco products?

networks to not only distribute content, but also to control quality. They
arent going to wait for you to gure it out via SDN, because this can be
done incrementally with managed overlays.

And at that point, the telecoms industry will be in deep doggie doo.
Once youve lost control over the systems that match supply and
demand, youre no longer in control over your destiny. (Indeed, my
start-up is really doing high-frequency trading against BTs network to
extract the quality arbitrage. Thanks for the capex, guys!)

The margins from overpriced circuit products sold to enterprises will

collapse, as assurance becomes available on broadband. There will be
absolutely no di erentiation on the retail side, so more margin collapse
and consolidation. The interconnect revenue from voice (and SMS) will
go into freefall. And telcos will be faced with a small cadre of powerful
global cloud platform buyers. (Is oligopsony a word?) Oh, and SD-WAN
will hollow out every other arbitrage of bearer, space and time.

None of this is news, either. I said it all at eComm back in 2009 when I
worked for BT as Strategy Director. This is an industry thats had a
decade plus to get ready for this moment. And it has failed in both
vision and execution.

As far as I can see, the only interconnected quality-assured product of

notable success thats actually been delivered in that time is VoLTE.

One product.

From a trillion dollar industry.

OMG. Or maybe WTF?

About MartinGeddes

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9/10/2017 Amazon torpedoes telephony. So where are the new telco products?

I am a computer scientist, telecoms expert, and consultant. I

collaborate with leading practitioners in the communications industry
to create game-changing new technologies and businesses.

martingedd.es

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