Dubber and Macquarie Telecom Sign Call Recording MSA

Dubber Annual Report 30 June 2017

Virtual reality (VR) allows you to be transported to real or imagined locations instantly and can connect you to people all over the world. VR users hit 50 million in 2016 and the number of active users of VR is forecast to reach 171 million by 2018. The graph below shows how revenue has grown and is predicted to grow over the next few years. 360-degree video is already available on platforms such as YouTube and Facebook and continued investment from these companies and others including Google and Microsoft mean that VR technology is becoming more affordable every day.

Source: Superdata

The technology is set to transform a number of industries and affect on the way we work and interact with the world and each other. Developments in VR mean that live events such as concerts or sports games can be experienced from your sofa. A global audience can be reached from one venue with the help of a few cameras and some technology. Users can access live streams through VR headsets but also through their browser or mobile app.

A seamless experience

To create a 360-degree video, visual data from multiple cameras must be pieced together to create one video. Post-production of VR content begins with stitching and blending to create one seamless sphere of visual content. VR has continued to improve since its conception and now features immersive effects such as audio that matches the user’s visual experience so accurately that when a user looks away from something, the audio diminishes. Recording using binaural sound is key to this feeling of ‘presence’. For a successful VR experience, and a feeling of true presence, the stitching technology used to create the 360-degree environment must be of a high enough quality to produce a seamless experience.

The future of VR

Tech leaders are predicting that VR will compete with television in the future and are investing in livestreaming services that aim to distribute 360-degree VR content to users around the globe. Just as the internet has changed the way we consume media such as news articles, VR is expected to do the same to television. This entertainment value could be seen as a key area of investment for telcos looking to create a new revenue source after the decline in growth from voice, texts and, most recently, data.

Industry specialists such as CNET founder Halsey Minor believe that VR will be the next stage of growth for the content industry, while Goldman Sachs have stated that VR and AR have the potential to become the next big computing platform. Goldman Sachs have outlined their predictions for VR and AR use in 2025, which can be seen in the graph below. The World Economic Forum sees AR and VR as technologies that can transform daily life with their time and cost saving benefits. This growing industry should be capitalised on by any telco wishing to stay relevant in the future.

Goldman Sachs predictions for VR and AR use in 2025

An example of a telco that is investing in VR is SK Telecom, which is commercialising its 360-degree VR live broadcasting capabilities and planning to open its application programming interface (API) so that individuals and small content developers can create their own 360-degree live VR experiences.

At this stage, the development of VR is very experimental as challenges are identified and overcome. Poor internet speeds can impact the VR experience through heavily compressed images and the strain that VR will put on networks is an area of concern. Network capacity needs to be an area of investment, particularly at the user end of the journey, as VR requires around five times more bandwidth than HDTV as well as the low latency that is essential for a fully immersive experience. If users do not have the correct requirements, content will need to buffer and be stored locally  – creating delays and limiting the interaction capabilities of the VR experience.

The next steps for VR will take the experience mobile. Immersive live VR broadcasting will work in tandem and become more widespread with the development of 5G due to the large bandwidth and low latency that are required for streaming. Network providers will play a key role in the realisation of VR, ensuring high quality connections to allow for a seamless immersive experience.

Hosted telephony has gained popularity and coverage recently, with its cloud base appealing to forward thinking enterprises and press alike. The chart below shows the growth of both managed and hosted systems, with on-premise PBX experiencing negative growth. However, research undertaken by communications analyst MZA has shown that most small businesses still use PBX rather than making the move to hosted telephony. There are four main factors to consider when choosing between the two solutions, which are outlined below.

Source: Synergy Research Group

Cost

Hosted telephony largely appeals to both small and large businesses due to the lack of CapEx required to implement the system. There is no hardware necessary, which reduces the storage space required as well as power costs associated with running servers. With on-premise PBX options there are also installation costs on top of hardware expenditure. Larger organisations will have greater CapEx, as costs only increase with the size of the hardware required.

However, monthly subscriptions for hosted telephony can work out more expensive over time, depending on the services and the size of the enterprise. Considerations need to be made regarding the features required by the business, as there may be extra costs that are not included in basic hosting packages. The chart below shows the top 7 reasons that SMBs look to change their system, with the results separated by their current solution, giving an idea of the considerations that should be made when deciding on a system.

Software Advice’s survey of SMBs and their phone systems

Time

As well as installation costs, the time required to implement an on-premise PBX solution is an inconvenience. Cloud solutions offer the advantage of rapid deployment, meaning installation costs are virtually eliminated by the DIY approach to implementation. When choosing a telephony option, installing a new infrastructure is a significant commitment. PBX solutions will need to be updated over time, and replacing hardware or enhancing features can take weeks to integrate. These changes can often lead to communications downtime that will need to be scheduled to reduce inconvenience as much as possible.

Hosted solutions can be implemented alongside existing communication systems. The most hardware that will be required is the phones themselves. Software updates are maintained by your cloud provider, meaning you stay constantly up to date.

Flexibility and scalability

The case for hosted telephony is certainly bolstered by the flexibility and scalability that it offers. Just as hosted telephony can grow alongside a business, it can also be scaled back. This can reduce monthly costs immediately, in contrast to large CapEx that will have already been paid in the case of PBX.

Security

With hosted telephony you have the added reassurance of reliable redundancy. Depending on the provider, you may not have immediate access to all of your data but you will have the guarantee that it will be stored securely with recovery solutions. The advantage of on-premise PBX systems is the immediate access they offer, but recovery measures are often so expensive that only larger enterprises are able to justify the cost of this level of security.

To decide which option is right for your business you need to consider not only pricing, but what your company needs from a telephony system. Looking to the future and anticipating how these needs might change as your company grows is just as important as the immediate considerations of cost and convenience.

We recently published the results of our survey of SMBs in the US, which showed what small businesses are missing from their current communications solutions. After uncovering some interesting results we conducted a comparison survey; this time of UK businesses.

Accounting for a large percentage of employees in the UK – 48% according to the report SMEs and Flexible Working Arrangements – SMBs differentiate themselves from larger enterprises through their agility and ability to respond to changes within their market quickly and easily. A cohesive communications strategy, one that encourages collaboration and productivity within the company as well as streamlining external conversations, gives smaller businesses the opportunity to triumph over larger companies that may struggle to adapt.

By consolidating their communications, across telephony, email, and instant messaging, small businesses are able to synchronise conversations that happen remotely and also out of office hours. With a similarly small number of SMBs in the UK currently using a unified communications (UC) solution – 9.2% in the UK compared to 10.7% in the US – the potential for telcos is clear.

Mobility is key across UK and US

Much like the findings of our US survey, personal mobile was also the most commonly chosen answer to the question ‘what phone system do you use for work?’ by participants of the UK survey, with 38.3% choosing this option compared to 39.7% of US respondents (see chart below). To keep workplace communications cohesive, a UC solution with mobility is essential for small businesses where workers use their personal mobiles so much. Small businesses may have limited office space, so having the confidence that their employees can have all the functionality of work available on their own devices is of great benefit. Getting employees to use their own devices may also be more cost effective for smaller businesses.

We looked at the different services that SMBs used as well as their phone system. In the UK instant messaging was the most popular choice, with 71.7% of respondents communicating in this way, closely followed by voicemail at 67.5%. This is unsurprising given the growth of Slack, which has grown to 5 million daily active users from 4 million since only October 2016. Instant messaging was slightly less common in the US with 57.9% using this service, while 79.3% of respondents said that they used voicemail. The benefits of consolidating all of these communications include an increase in productivity as conversations can be found in one place.

Interestingly, when asked if they would like to have all business communications, including mobile and deskphone as well as conference calling and internal messaging, provided in one UC platform 64.2% of UK respondents said yes, compared to 72.5% of US participants (see chart below). This is still a significant majority and one that should be pursued by telcos.

A flexible approach to work

Increasingly, employees have come to expect the flexibility to be able to work from a range of locations, at a time that is convenient to them. According to a Citrix-commissioned report by The Work Foundation at Lancaster University, over 50% of businesses in the UK are likely to have a flexible working policy in place by the end of 2017. This flexibility boosts the happiness of employees and can result in more efficient working with less time spent travelling if employees can work from home and remain connected with the rest of the team. In fact, research by Vodafone found that 83% of respondents to their extensive workplace survey said that adopting flexible working has resulted in improvements in productivity.

A unified communications as a service (UCaaS) model utilises cloud infrastructure in order to provide the kinds of features that were once only available to larger enterprises, and through a lower cost service that is quick and simple to deploy. Cloud-based solutions also offer a higher security level that can defend against cyber attacks. Any solution will need to serve a variety of devices to fully integrate all employees but will be better placed to adapt to updated technology in the future with intuitive software and the automatic rollout of new features.

Additional services

In a similar result to our US survey, the additional service that SMBs in the UK wanted most from their service provider was call recording. An even higher percentage than the US, 42.5% compared to 37.2% of US respondents, chose call recording as the service they would like to add to their phone system (see chart below). Call recording is becoming increasingly important to small businesses as regulation and compliance develop as issues for more industries.

Not only do UC solutions offer synchronised conversations, their enhanced reporting capabilities can be instrumental for business understanding and growth. Call recording can help with training new team members and the data captured can form the basis of reports that inspire improvements in business practices.

Another opportunity for business development is the integration of a UC solution with existing CRM systems. This can add value as customer details become a part of the communication process, creating an informed approach that can improve relationships and make conversations more efficient.

Not only would a UC solution create a simplified and cohesive approach to workplace communications and increase interconnectivity between employees of small businesses, the potential for increases in productivity and efficiency is great. When integrated with existing CRM systems and used to inform business practices, a UC solution can provide previously unrealised opportunities for growth and development.

With an evolving business culture that increasingly requires flexibility from workers, solutions have developed that enable businesses to stay on target even when employees are working remotely, from their own devices, and out of office hours. Unified communications (UC) solutions do just that: synchronising conversations across devices and allowing workers the flexibility they need to keep up. SMBs are now looking for UC solutions which were only available to large corporations a few years ago. We’ve surveyed 120 SMBs in the US and found some interesting results.

Investing in communication

Communication is an important part of any business, but with tighter travel budgets affecting SMBs more keenly (a recent study by Forbes found that 59% of SMBs surveyed were travelling for business less frequently than they had been at the beginning of 2008, with 37% saying that they were travelling much less frequently) developing adequate alternatives to face-to-face contact is crucial. Improving communications allow relationships to be maintained from a distance, removing the need to be constantly on the road but in a slow and precarious economy, contact with clients is vital to nurture relationships and retain business

The demand for a unified communications solution is increasing due to the productivity and cost reduction benefits associated. Our survey of 120 SMBs across the US showed that while only 11% said they had a UC solution in place, 73% of respondents said that they wanted a service that consolidated all of their communications into one platform, showing a huge opportunity for UC growth. Simplifying the ways employees talk to each other and external contacts brings with it increased efficiency and a feeling of interconnectivity that is vital in a small business.

With 84% of respondents stating that they use the telephone as a business tool either some or all of the day, it is clear that this is an important channel for their company communications. However, significant percentages of respondents also noted their use of instant messaging and conference calls: showing that while traditional voice calls remain important to businesses, communication is branching out to other channels. Especially when sharing data or imparting information that is better presented visually, technology-enabled meetings such as web-conferences are a growing channel for businesses to engage with their customers through. More than half of SMBs surveyed by Forbes said they had increased their use of web-conferencing, videoconferencing, and teleconferencing since 2008 – citing time and money saving benefits as the main reasons for their choice of communication channel and also flexibility of location and timing (see graph below).

Source: Forbes

Mobile workers

SMBs are likely to employ mobile workers who need more flexibility than a traditional desk phone can offer. They frequently work across multiple devices and out of the office and require a communications solution to match if they want their conversations to remain cohesive and organised. When asked what phone system they used for work, personal mobile was the most common choice for respondents of our survey – showing that SMBs require a UC solution with mobility to ensure their communications are synchronised.

Employees experience this level of constant connectivity in their personal lives and they have come to expect this from their work communications as well. The risk of continuing without a UC solution in place is that employees, frustrated by workplace communication channels that lack flexibility and performance, use their personal accounts for external communications. This can cause difficulties concerning security and compliance. We have written before about the rise of BYOD and the challenges it brings but in certain industries this approach just isn’t feasible. In its place, a UC platform that is both available and secure is essential. This type of solution, which included features such as call recording and mobility, was once only available to large enterprises but is now available for businesses of all sizes. Telcos now have a unique opportunity to collaborate with platforms such as Dubber to offer these services to their SMB customers who are ready to take advantage of this additional functionality.

The most popular choice of service that wasn’t currently available to the SMBs surveyed was call recording, with 37% selecting it as a feature they want from their service provider, showing a key area of growth that telcos can capitalise on. Call recording is becoming ever more important as regulation and compliance become key for increasing numbers of industries.

The obvious solution for the communication needs of SMBs is a UCaaS model, which can provide features previously only available to larger enterprises, but with much lower costs. Using cloud infrastructure is beneficial to many aspects of businesses, from CRM solutions to data storage, due to its scalability and security, and its future is in communications. Native cloud solutions offer much better security than systems hosted locally and can grow or shrink alongside a business. By consolidating all communication; from telephony to email, via instant messaging, into one integrated service, SMBs can connect their employees with a cohesive working practice.

If you’re one of the SMBs that would like call recording on top of your UC platform, then get in touch

While the days of holding the line while you wait for an available support agent  might seem far from over, call centres have evolved since their conception with the emergence of new technology. Now more commonly referred to as contact centres, as communications between consumers and customer service advisors are no longer confined to calls, here we examine how they have adapted to the modern age.

Please hold the line

Traditional call centres used an automatic call distributor (ACD) to distribute incoming calls to agents using a first in, first out (FIFO) system. Modern contact centre solutions now have virtual queuing systems that allow customers to receive callbacks instead of remaining on the line while they wait for an operator to become available. Either a virtual placeholder takes the customer’s position in the queue, or a scheduling system allows customers to choose a time and date in the future at which to be called back.

New technology allows for continuous improvement of customer service. Interactive voice response (IVR) is a technology that utilises speech recognition and keypad tones in order to direct a call to the most suitable advisor using information supplied by the customer. Where traditional ACDs could only play a greeting and queue calls using the FIFO system, IVRs can profile a customer and reduce call transfer and queue times. Callers speaking different languages can be routed to an appropriate agent based on their language preference. With more sophisticated IVR, different approaches can be tested and refined to adapt to the customer’s response. Conversational IVR can even greet customers by name for a personal touch.

Survey by DimensionData

Adapting to the modern consumer

Historically, customer support has been delivered through call centres but today modern contact centres use computer telephony integration (CTI) to communicate through a variety of channels including online chat, forum style support ticket platforms and social media. The chart above shows how customer service interactions have changed since 2006. This immediacy and flexible approach is something that has come to be expected by the modern consumer. Where once customer advisors were only required to have excellent verbal communication skills, now their writing and adaptability is being put to the test. The chart below shows preferences in channel by age group.

Source: Fonolo

For instance, Akixi, a leading provider of cloud based call management and analytics allows businesses to improve their sales performance and deliver excellent customer service. They have recently partnered with Dubber, creating the potential for limitless applications of call recording and intelligent call analytics in one fully comprehensive unified communications (UC) package. Like Dubber, their solutions offer unlimited scalability, no hardware limitations, and rapid deployment.

Speech analytics software, such as Dubber’s Zoe, allow companies to identify repeated problems by looking at commonly used phrases and analysing the sentiment of phone calls. Complaints can automatically be picked up and forwarded to development teams to improve future products and services, while customer advisors who consistently turn complaints into positive outcomes can be identified through sentiment analysis.

With communications solutions now being integrated with CRM systems, the data generated from contact centres can help to build an informed profile of each customer. Mondago, who provide computer telephony software, specialise in providing UC solutions that are designed to be integrated with CRM systems. As repeating information is frustrating for the customer, services such as Mondago’s Go Integrator feature screen population, which allows an advisor to see all their available information, create a much more efficient way of working.

An integration between Mondago and Dubber, enables their Go Integrator product to automatically pause and resume call recording with Dubber’s cloud based service. This is essential for remaining compliant with PCI regulations surrounding the protection of payment card information. Again improving productivity in contact centres and enhancing data security of consumers.

Not so distant future

The introduction of session initiation protocol (SIP), which allows for multimedia communications, means that calls do not have to be confined to only voice. In the future, IVR can be extended to IVVR (interactive voice and video response), giving the option of video calls with customer service advisors. This will allow systems to read customer emotions by analysing facial expressions, and can also use facial recognition to identify and greet callers.

In place of security questions and difficult to remember passwords, video calls can use biometric identifiers such as iris scans to prevent fraud. Where customer emotions were once identified by an advisor’s sympathetic ear, sentiment can now be detected by software that can enhance customer understanding. The value of being sensitive to the needs of the customer still remains, but the emergence of new technology allows the modern day contact advisor to do their job more efficiently. By integrating IVR with CRM systems as well as workforce management systems, customer service has the potential to be completely transformed into a proactive element of business development.

Bring your own device (BYOD) is a workplace culture that has been adopted by most industries; from healthcare to finance. Allowing, and encouraging, employees to work from their own devices not only reduces expenditure on technology, it also increases productivity by allowing employees to work from home and while travelling, on a device they are familiar with. However, when it comes to monitoring the distribution of company data, there are some challenges that accompany the benefits.

Keeping tabs

Ensuring company data remains secure, while respecting the privacy of an employee’s personal information, is the most difficult problem that IT security departments face. When personal devices are used for work, the data remains controlled by the organisation and it is important that this responsibility is carried out without breaching any data protection obligations concerning personal data stored on devices. This can be a difficult balance to achieve, especially when working in industries such as finance and healthcare that require specific data compliance.

In finance for example, MIFID II regulations state that investment firms in the EU must take reasonable steps to record communications made from equipment that has been accepted or permitted by the investment firm – this includes personal devices. These regulations also insist that firms should prevent employees from communications on privately-owned equipment which the firm is unable to record.

Monitoring communications across social channels such as Twitter and real-time communication applications such as Skype can lead to difficulties when complying with communication recording regulations. Employees are so used to communicating across a range of methods in their daily lives that to restrict them is not an option. Add to this the US lead Dodd-Frank requirement to be able to complete a case reconstruction within 72 hours of an investigation request, and the need for a solution intensifies.

Some solutions

Developing a culture that is as dedicated to security and compliance as it is to flexibility and efficiency is the answer to the new challenges of BYOD. This evolution in work should be seen as an opportunity to examine employee communication practices and put in place measures to ensure a cohesive approach.

Chart by CIO Insight showing communication inefficiencies in American hospitals

BYOD certainly encourages companies to consider a unified communications (UC) solution. UC can easily integrate existing devices into one cohesive and efficient communications strategy that can save companies time and money. As well as ensuring that the business is compliant with regulations regarding the recording of communications, there are numerous efficiency improvements that an organisation can benefit from. Research by CIO Insight found that American hospitals were wasting billions of dollars a year due to inefficient communications technologies (see chart above). Interaction between colleagues and clients is quicker, and collaboration becomes easier, allowing employees to focus on work. Employing a call recording solution like Dubber that integrates with your company’s CRM, for example, can allow transcribed calls to be viewed alongside other client information.

Software solutions that have keyword search capability, such as Dubber’s Zoe, which allow information to be gathered quickly and easily are a vital precaution against the 72 hour deadlines involved in investigations. The ability to record, transcribe, and search conversations at the touch of a button can also increase accuracy in day-to-day work and ensure that important details are not forgotten.

Flexible call recording solves the problem of collecting work data while protecting personal communications. With an services like Dubber’s Playback, the user has the option to keep a record of  a call, after they have made it. Personal numbers can be blacklisted to ensure they are never recorded, while business numbers can be whitelisted so these conversations are always stored.

Graph from Global Market Insights showing growth expectations of BYOD market in USD by device

Not if, but when

With BYOD now an unavoidable reality, not having a policy on BYOD is the biggest risk to an organisation. A report by Global Market Insights anticipates growth in the North American BYOD market size over the next five years (see graph). Employees expect more flexibility in their work, and BYOD is part of these expectations.

With communications taking place across multiple applications, even on company-owned devices, it makes sense to embrace BYOD – with a considered policy that ensures security and compliance. In fast-moving sectors such as the financial industry employees are not going to ignore important calls just because they are unable to record them, so measures need to be put in place to ensure they can. Providing a UC solution that allows employees to work in the most efficient way is the key.

With the countdown to the MiFID II regulations on the financial sector within the EU continuing apace – we take a look at the APAC call recording regulations that have been put in place since the Global Financial Crisis of 2007.

Eleven members of the G20 summit, including Australia, China, Hong Kong, and Singapore, have committed to a host of regulations for their banks. The aim of these regulations is to improve transparency in the financial industries and reduce risk culture. These measures should restore the trust in investors and consumers that may have been lost in recent years.

With MiFID II mandating the recording of all mobile calls and text messages relating to financial advice and wealth management, it is unsurprising that Asia-Pacific should follow suit with its own extensive regulations.

Burden of proof

Although there is not a cohesive set of compliance guidelines for the region, the unifying theme of the regulations is financial services providers acting in the best interests of their consumers.

The Future of Financial Advice (FoFA) Act introduced by the Australian government, designed to nurture trust in customers and encourage transparency in financial service providers, states that financial advisors must act in the best interests of their clients. Best practice guidelines released by the Australian Securities & Investments Commission describe how records should be kept to show how this is being upheld. In order to comply with these guidelines, all communications with clients will need to be captured and stored securely.

The Hong Kong Monetary Authority also requires that institutions selling investment products maintain adequate records to demonstrate that they have advised their clients appropriately – this includes audio recording. Where repeated transactions are requested over the phone, these calls must be recorded to prove that customers are aware of any continued risks before continuing with their investments. Any waivers of risk disclosure should also be recorded as evidence.

Chart from Nielsen Q4 2016 Consumer Confidence Report

Similarly, the Chinese Protection of Consumer Rights and Interests Amendment places the burden of proof on service providers in the event of a dispute. Chinese and Hong Kong banks, are also required to keep records of client communications, including audio recordings, in all derivatives transactions. These must be kept readily accessible for a minimum of five years after the transaction has matured or been terminated. The Nielsen Consumer Confidence Index (see chart above) shows that Chinese consumer confidence has increased in Q4 of 2016, which shows promising signs for the new regulations.

The Monetary Authority of Singapore, in its guidelines on risk management practices, states that institutions should maintain records of telephone calls involving trades and discussions with customers on proposed transactions. Transaction information should be stored ‘in a manner that is reasonably practicable to retrieve’ until at least five years after the last date of expiry or termination of a contract. Storage for this length of time tends to be a major challenge for legacy call recording solutions, especially as financial organisations grow. The costs involved can increase dramatically with the storage requirements. With a native cloud solution, scalability is built into the service – allowing organisations to manage their data without any extra hardware.

Chart from World Economic Forum

It’s not all doom and gloom

As regulations and guidelines around financial services tighten to protect taxpayers and consumers, technology providers strive to innovate solutions to help organisations along this road. For instance we have seen solutions such as Dubber working with service providers to provide finance-focused call recording solutions to overcome these challenges.

Solutions such as Dubber’s native cloud call recording will be an instrumental service for organisations wishing to comply with these guidelines. Just like the paper trail of emails, it provides proof that specific information was supplied to a client, ensuring advice was given in their best interest. Not only is the implementation of this service quick and easy, there are numerous commercial benefits that accompany it.

Keeping customer service and user experience at the forefront of your business strategy is vital for success, and there is no reason that this shouldn’t be the case when maintaining compliance with regulations. The systems that have been put in place by financial authorities to maintain consumer interests can actually help banks to identify consumer behaviour patterns that can help them to understand their customers and improve their business.

Safe storage that is easily accessible, is something that you can expect from native cloud solutions. Without the need for any hardware, Dubber can provide long-term secure storage for your calls, which can be accessed in a flash. Solutions such as Dubber’s platform offering, which utilise third party infrastructure as a service solutions such as Amazon Web Services, experience vast benefits such as scalable storage and enhanced cloud security.  Prioritising security is all part of the AWS cloud infrastructure, which is constantly evolving to protect your data.

The way people communicate is changing, and so telcos need to reevaluate how they deliver their core services to keep up with these. In a dynamic and turbulent time for communications, telcos must consider a new balance to build lasting revenue streams; they must find innovative new solutions to overcome the 4 major challenges facing telcos today whilst still providing users with key services.

To stay afloat, telcos must adapt. If they invest and develop suitable solutions that simultaneously answer consumer demand and support tech innovation, they will broaden their user base and open themselves up to new sources of revenue. If they fail to adapt, however, they will find themselves threatened by other new, innovative smaller but yet fastly growing companies. In a competitive and dynamic industry that is headed for a big shake up, what new challenges are the biggest threats to telecom longevity?

1. Competition from OTT services.

The phenomenal growth of mobile messaging apps in the last few years has become a serious threat to telco revenue. Approximately 2.5 billion people worldwide now use at least one messaging app, which is steering valuable traffic away from telco’s text services. There is already an obvious decline in the Average Revenue Per User (ARPU) of telcos, with a decrease from 34.58% in 2007 to 22.11% in 2015. If the trend continues, text messaging will die out completely and OTT service providers will continue to steal valuable revenue from telcos.  Add the voice services provided on top of these messaging apps and the issue is much more significant.

2. Gearing up for the IoT

The integration of the IoT into our everyday lives is edging ever closer, and it is predicted that there will be 21 billion connected devices by 2020. To sustain these numbers, platforms that support incredibly high levels of connectivity will be needed. This places a lot of pressure on telcos to develop a converged platform that is sufficiently functional to support the full weight of the IoT.  The integration of technology companies with telco services to form the IoT could also result in a hugely compressed telco infrastructure.

3. Decrease in voice revenue

The way people communicate is changing: where voice and text used to dominate the communications industry, now internet messaging and VoIP do. Smartphone traffic is moving to WiFi, increasing from a total of 59% of smartphone traffic in 2011 to 81% in 2013. As a consequence, voice traffic has decreased from 50% in 2009 to 41% in 2014, leading to a decrease in voice revenue of 2.7% by 2014. Previously voice revenue was the largest source of income for telcos, and so the decrease in voice revenue has led to an overall decline in ARPU. Telcos must find an additional source of revenue to replace voice and text – such as network level Value Added Services.

4. Developing 5G

5G is expected to become available to the public by 2020. It is expected to improve not just the speed of the spectrum, but the capacity and latency as well.  Ultimately, 5G will provide a browsing experience for users with less delay and unlimited connections. The potential of 5G will also facilitate development of  IoT, meaning 5G will be not just an upgrade, but a complete revolution of mobile technology. However, there are many industry sectors and companies who could profit from 5G – including technology giants such as Apple, who are investing in 5G to support their smartphones, and IoT companies in need of a platform from which they can launch their products. The involvement of other industries puts telcos under pressure to develop 5G technology before they are shut out of the process altogether. The race is on – and telcos must invest heavily if they are to produce a network with the promised capabilities of 5G.

Take the new Peugeot Instinct for instance. At this year’s Mobile World Congress, we saw glimpse of telecommunication services and device providers, partnering with car manufacturers, to produce concept products and showcasing the reach of 5G within new sectors. This is a welcome step in the right direction.