Chris Kranky

Recent Posts

WebRTC is this more or less?

Chris KoehnckeChris Koehncke

cockroachesYesterday I wrote a “tongue in cheek” article about some of the silliness that the telecom industry has brought with them into the Internet age.  Telephone company executives have been concerned as traditional voice usage has declined (one mobile operator has seen their average hold times decrease to a mere 1.5 minutes per call) and along with it all sorts of usage revenue. The question is what to do?

Any good MBA student will tell you it’s generally a bad idea to invest to stop a market from declining. Market dynamics, like the oceans, have strong tidal influences and no single company is likely to change the tide. It’s basically good money after bad.

Most of these telcos are multibillion $$$ entities with the bulk of their monies coming from a single region. For all the noise Skype generates, it’s perhaps a $1 billion in revenues and that’s worldwide. A widely published figure is that Skype users are burning up 115 billion minutes per quarter of which only a fraction end up going back to the PSTN and being chargeable.  If Skype hypothetically charged $.01 this works out to about $5 billion a year in revenue, barely ranking in any telco list.

Skype has relatively little cost to run their operation and like most freemium services is looking for a single digit % of the users to actually pay. It’s hard for a traditional telco to adopt this model and perhaps they shouldn’t try. You don’t take a battleship to war when you need an aircraft carrier. Legacy telco systems are perhaps a battleship in the war ahead.

The introduction of WebRTC only complicates things further. Google, learning from their Android experience, is trying to unleash millions of HTML programmers to create new multimedia communication applications. Hundreds of cockroach applications will scurry across the kitchen floor in the course of the next 36 months. The barrier to entry will be low. There won’t be 1 Skype, there will be hundreds of them. What will stick is anyone’s guess.

My recommendation is for telcos to invest in WebRTC infrastructure, minimal as they can, experiment on a variety of ideas, worry less about making $$$ and more about learning and more importantly bringing value to their existing customers and keep their cheque book handy as a bidding war will ensue for those who create compelling applications.