WebRTC Expert Feature

December 08, 2014

Numbers & Carriers: the Bridge to Financial Survival, or Links to the Past?

By TMCnet Special Guest
Hugh Goldstein, Head of Strategic Partnerships and Alliances at Voxbone

“I seem to have lost my phone number. Can I have yours?” said the OTT mobile app to the competitive local exchange carrier in a bar. Clearly, tacky pick-up lines about telephone numbers still outnumber ones about IP addresses or SIP URIs. And there have always been a limited number of good telecommunications comedians.

The humble telephone number – so much a part of business and personal identity – has evolved considerably since digits were first used 125 years ago to help switchboard operators connect users on the new phone network. Today, there are billions of phone numbers operating within a clear, internationally-sanctioned hierarchy. Although mobile technology, deregulation and software have dramatically changed the industry, the telephone number continues to serve as a universal identifier for telephony. There are a few reasons why.

  1. Interoperability. Across all markets, the availability of broadband Internet for both fixed and mobile has had the effect of unbundling services and access that have always come as a package deal. Apps have become over-the-top islands of social communication, creating two distinct telecom service dynamics: the on-net and the off-net. The larger the club, the more likely your friends & acquaintances will also be members. Think of WhatsApp, for example – many consumers join it just to communicate with friends already on it. Most of these services are free so as users increase, the minimal investment of downloading a free app becomes more and more compelling. Some of the fastest growing OTT networks have developed a unique twist by searching the address book on the user’s smartphone, and using the telephone number as the identifier internally as well. UC implementation can use corporate emails or other IDs. But on-net communication – no matter how large the club – is never enough to satisfy all of a user’s communications needs. In order to communicate with each other, and the outside world, on-net services need telephone numbers, without exception. As such, telephone numbers will be the key for interoperability of networks for a long time to come.
  2. Monetization. Financial success of OTT communications has often been driven by M&A, which is not sustainable. When they need to generate revenue, OTT providers have often turned to origination and termination. In order to be reached from the outside world many OTT providers lease telephone numbers from CLECs or global specialist companies like Voxbone, then resell this functionality to their subscribers to create or enhance ARPU (average revenue per user). They provide termination to fixed and mobile networks and charge per-minute fees.                                                                                                                         We are still in the midst of a transition period between the PSTN business models (charging based on distance and duration of service), and flat-rate subscription models. Consumers and businesses alike want to keep their numbers, even as they migrate away from the PSTN toward Mobile, OTT and UC services. These numbers are a key part of identity and essential to remaining interconnected. Therefore, telephone numbers will continue to be key for operators to continue to generate revenue from legacy and new services. 
  3. Globalization. Planet Earth has over 8 billion humans who have a huge plethora of languages and alphabets used to communicate with each other. The beautiful, simple telephone number will connect you with any of those billions of people regardless of if they can understand a word of what you are saying once your call is connected. 
  4. Regulation. Who owns a number? Is it the operator, the government or the user? While the Carrier of Record has the right to use the number due to Local Number Portability (LNP) services (which we now take for granted in developed markets), the answer has increasingly shifted toward the user. Ultimately, telephone numbers are available for use only by appropriately licensed and regulated service providers; the end-user gets to keep them as they move between providers in liberalized and competitive marketplaces. LNP underscores how something can seem simple and effortless, but is actually dependent on a complex mix of technology and public-private sector cooperation.  

The telephone number: it’s no joke

The coming year holds even more promise of disruption for the telecom business via open standards such as WebRTC that will bring voice and video into any Web browser, and the industry should be prepared. Contributing to the promise of disruption is the simple fact that financial markets cannot rise forever, and venture-funded OTT applications will eventually need to generate revenue. The migration to UC and cloud solutions by SMBs and enterprises will continue, and they will require their solutions providers to manage porting of their legacy numbers. Globalization will also continue, increasing the value of geographic numbers from distant countries that ring locally on your phone. Perhaps eventually there will be a new form of global federation and standardization for telecom identifiers that unites all networks in a fundamentally new way, but for now and the foreseeable future – nothing rivals the simplicity and utility of the phone number.

Edited by Maurice Nagle

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