Symbio Networks' Rene Sugo


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Symbio Networks' Rene Sugo at CommsDay Melbourne Congress 2013

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  • Clearly this is a global problem, and one of great concern to the United Nations. But how is this relevant to us here in Australia?Let me remind you that there are only 3 mobile infrastructure providers in Australia, and these operators are demonstrating a clear preference to sell their asset retail instead of wholesale. The reseller business model clearly has longevity issues.How will those of us without mobile infrastructure differentiate ourselves? How will the non-mobile part of our industry grow or even survive?Well, the good news is that consumers and technologies are changing… and it is no longer about big infrastructure, but about creating new value which will be delivered over-the-top.Today I hope to explore how new and existing non-infrastructure providers can build on this new emerging communications business model.
  • First networks to be built were purpose specific – from the first telephone networks which were hard-wired point to point lines, through to switched voice networks which were infinitely more flexible. However at the same time that digital switched voice networks existed, there were a plethora of other function specific data networks. Who remembers protocols like X.25, Frame Relay, ISDN data networks and then innovations such as general purpose cell switching in ATM networks. Of course the most recent is the universally flexible Internet Protocol which has now all but replaced all of it’s dedicated network predecessors. The two main reasons for the universal success of Internet Protocols was the fact they could carry any data payload, and they could be transported over any medium – from PSTN, ISDN, Ethernet, Fibre and it’s crowning glory is of course wireless networks such as WiFi and 3g/4g mobile networks.Device technology has undergone it’s own evolution in parallel to the networks. Initially devices were function specific – landline phones, even mobile phones. Initially general purpose hardware such as Personal Computers were clunky and complex. In fact some early computers were indeed function specific hardware implementation. How quickly we have forgotten the not to recent past! We now all posses devices that are small, lighter, more powerful and ultimately more well connected that anything we could have imagined a mere 6 years ago when on the 29th June 2007, Apple unveiled the game-changing smartphone, and soon after the tablet range of personal computers. Applications also evolved, from clunky inflexible text applications through to windows driven, and most recently “app” driven.The user experience moved from very basic, through to very complex. MS Office is no doubt one of the most complex mass deployed applications in the world today. How many of us have struggled to assimilate to a MS Office upgrade! It usually takes weeks to restore productivity. The applications are large and extensive. Compare this to the latest evolution of the “app” where they are limited to one specific function, typically easy to use with every function reachable within 3 touches. Such narrowly focused application scope allows users to personalise their own device with very specific choices in application mix – the ultimately customised generic device.
  • The market has moved from the premise of ‘buyer beware’ to a paradigm of ‘seller beware’.Consumers are now better informed than ever, with more choice & more information at the touch of a smartphone screen. They can compare sellers, services, pricing and features and make informed decisions about which services suits their specific needs.With the buyer more discerning then ever, service providers are struggling to be ‘jack of all trades’ – it is impossible to do everything & do it well. The trend in products and services is now to specialise & do one thing expertly.This trend has been further boosted by smartphones and the apps market, where you no longer rely on one device or program to ‘do it all’, but rather – the device acts as a gateway to access a multitude of apps. With space or memory no longer a real issue, consumers can afford to select specialised apps that mostly closely meet their needs, and are comfortable having a streamlined dedicated app for each task, rather than an all-in-one behemoth that doesn’t quite deliver well one any parameter.
  • Thecomms market has never really moved away from a perspective of dictating to consumers what they should be buying.Most of the initiative over time have been around suiting the service provider – multi-service was to be able to simplify billing, and bundling is really just an attempt to increase ARPU. In fact bundling is built upon the fact that most users won’t use all the services in the bundle thereby increasing breakage and margins for the provider.The recent stint of advertising “unlimited” services which were not really unlimited was just another form of this exploitation, which of course led to the TCP code.There is no longer a ‘standard’ or ‘average’ user – therefore, services can no longer be bundled into tidy packages with a set list of minimum features. To continue meeting consumer demands, providers must incorporate more and more features into their services.... and the old saying holds true: “jack of all trades, master of none”. It is very difficult for one provider or one app to deliver all the features, and do so simply & efficiently enough for consumers to want to use it.Therefore, we is happening is a fragmentation – the trajectory of better design means the apps & services must be specialised and service a single purpose.Consumers are now empowered more than ever to tailor their own communications solution. This is a paradigm that we initially observed with early adopters of VoIP technology who would create their own “Least-Cost-Routing” plans by picking the eyes out of multiple providers. While this level of complexity is out of reach of most consumers, thanks to smart phones, Over-The-Top applications and a huge pool of intellectual property, the tables have turned, and consumers can now very easily create their own personalised communicaitons environment!This means consumers can now pick & choose the services and apps, and they key selection criteria is better design – services that are easy to use, to understand and that deliver the desired outcomes.
  • You don’t have to go far for an example of personalisation – in fact no further than your own smart phone.I do not consider myself a power user by any stretch of the imagination, but I do like easy to use well designed systems. The three click rule – every function or setting is reachable in 3 clicks within an application. Some applications are taking this further and going to a “1 click” rule – the ultimate sniper approach.And the interesting thing is that most of these things are not new. They are just better ways of doing old things. Billing used to be a problem – but with the arrival of many micro-payment alternatives – credit cards, internet payments, online accounts – this is no longer a concern to consumers. A few years ago who would have entertained buying software or a service from over 100 vendors. Most of those single pay, or even free.On demand – have a need or idea you want to try out – just go online and purchase an application to fulfil that need. Chances are one already exists out there.
  • Service providers need to reconsider their value proposition in light of this new innovation cycle. Carriers with Network Infrastructure used to be the big innovators, now they are increasingly being left out of the innovation cycle. The infrastructure is just an input. The Service providers are redefining the speed of innovation with software instead of hardware. The Infrastructure providers who will benefit the most are those that have built inherent flexibility into their networks – thanks to providing flexible APIs, extendible capacity, and fast time to market.Speed – new opportunities emerge and are leveraged with ever increasing speed, and can just as quickly pass by. Limited opportunity for resellers to jump on the bandwagon – by the time they get around to it, the market is on to the ‘next new thing’.That is not to say there is no room for new infrastructure to be built. There is still a need for wireless networks, data centers, back-haul fibre, cloud farms etc. These are now necessary infrastructure components for new innovating providers.One great example of this innovation cycle is MegaPort. Mt Slattery’s latest brainchild. In reality he is taking other people’s data centers, other people’s fibre networks, stitching it together with a bunch of API’s, software and to top it all of a nice little smartphone app – and he’s made new and better something that was already there before. He’s re-invented the point-to-point link for small service providers and enterprises. By using software he has made simple something that was cumbersome and complex. And in doing so has created a new market for his product – virtually overnight.
  • If you’re in the Telco game and want to succeed in the retail market, your choices:1. Get own network – huge investment, very time consuming... almost impossible in current market2. Resell others – Telco’s are too slow to react. If you just resell their services, you don’t have any way of differentiating. The typical differentiator for resellers is price and service, not innovation. If you wait for your underlying carrier to innovate... you’ll might be waiting a long time. 3. Create something new - identify market needs, develop your own niche innovative apps, connect them to carrier infrastructure via software and APIs.And if the big traditional Telco’s don’t have the APIs you need, then look around for some new-generation carriers that have this capability – that open up their infrastructure.
  • Most of us that have a communications diploma or degree learnt of the 7 layers of the OSI model. I propose that model is out of date, and I propose this is the new OSI model for communications networks. Lets call it the OSI model for programmable networks.Each layer is now infinitely more complex than the traditional model, but fundamentally easier to understand.The user is now part of the model. It no longer ends at the application. The user is integral to the performance and usability of the network. As with the traditional OSI model, it can be boiled down into 3 major areas – Infrastructure, Delivery and Consumption. The interactions between the layers are not defined by international standards, but by programming interfaces and commercial agreements.If you are starting a new voice communications business today, or re-inventing an existing one, I would strongly recommend you look at what layer you start building your infrastructure.
  • AtSymbio we’ve been focussed on building capabilities for the future. We were lucky to be in the right place at the right time to build our own national voice network – and we’ve made it open to the world to leverage that network and build upon it. It’s proven to be the right decision with over 150 service providers leveraging our infrastructure to build their own value added products and services.This is a strategic decision which we are committed to. I welcome your thoughts and feedback on what we have done and the direction we are heading.
  • This is my view of the future of the voice app.There will be a handful of “cloud access platforms” – bridging the PSTN world and the cloud world – but these will be largely invisible infrastructure plays.The OTT provider will own the brand value and the high margin service delivery.The access carrier will be judged only on the quality and price for the access.And the user will chose their device and appplatforms based on personal choice or needs.Userswill have multiple “Voice” applications on the one device. Maybe work & personal, maybe one voice app per social network.Question-What will happen to “any to any “ real time communications? One of the key values of the PSTN today?
  • So back to the problem of too many phones and not enough toilets. It is really just a matter of understanding where the opportunities are, and finding the best way to leverage them. Once you do that you don’t feel so bad about not owning your own mobile network!
  • Symbio Networks' Rene Sugo

    1. 1. OTT: Shaping the Future of Communications Rene Sugo Group CEO – Symbio Networks 1
    2. 2. An Over-The-Top Fact! • More people in the world have mobile phones than toilets! – UN Study March 2013 • Out of the world’s estimated 7 billion people, 6 billion have access to mobile phones. Only 4.5 billion have access to working toilets • Ref: Slide 2
    3. 3. Who are we? Slide 3 Part of ASX Listed My Net Fone Built and operated own fully interconnected national voice network • One of only 7 national voice networks Largest VoIP network in Australia billing over 3 Billion voice minutes • We handle over 200 million calls per month Group ecosystem spans network infrastructure, software platform development & direct retail brands Industry advocate for technical innovation, and consumer adoption and migration to new voice communications environment
    4. 4. Agenda Evolution of Communications Consumer Perspectives Comms Market Perspectives What does this Mean for Providers? OSI Model 2.0 Building an OTT Future Conclusion Slide 4
    5. 5. Evolution of Communications Slide 5 Network Device Specific Generic Apps Basic Bundle Unbundle Personalised User Experience
    6. 6. Consumer Perspective Discrete Simple Services • Consumers didn’t know better • Consumers had no choice Multiple Services • Leverage complex billing • Saved time and effort Bundled Services • Seemed like a good idea at the time • Consumers perceived better value for money Personalised • Only what they need • Best value for money (free?) • Empowered • DIY tech Slide 6 Future…PresentPastPre-historic Consumer Beware Provider Beware
    7. 7. Comms Market Perspective Discrete Simple Services • Didn’t know or care any better • What else could you possibly want? Multiple Services • Lets make the billing more complex • Lock you in • Increase ARPU Bundled Services • Define the “average” user • “Unlimited” seemed like a good idea! • Increase ARPU Personalised • Apps! • Micro-payments (Free) • Over-the-top • Sniper approach • No “average” users! Slide 7 Future…PresentPastPre-historic Infrastructure was King! Consumer is King!
    8. 8. Example of Personalisation Slide 8 Better Design • Multiple providers Specialised • One brand per function Single Purpose • Three click rule
    9. 9. What does this mean for Providers? Slide 9 API controlled functionality User Needs & Wants Innovation Cycle Viral Adoption & Change Agent Software Components Fast Customisation & Deployment
    10. 10. What’s a new Provider to do? • Build or buy your own network • Resell other networks • Spend my effort to create something new What are my options? • Identify customer niche & needs • Leverage other people’s networks with APIs • Create your own value – apps, marketing & service! How do I differentiate and compete without infrastructure? Slide 10
    11. 11. OSI Model 2.0 Slide 11 Infrastructure Consumption Delivery A P I
    12. 12. Building an OTT future We provide: Network & Infrastructure Voice, phone numbers & porting APIs to build on: • Call control/features • Local Number Porting • Billing & payments • Provisioning You add value: Apps Deliver Over-The-Top Slide 12
    13. 13. Future of Voice Services Any to Any Connectivity Cloud Access Platform OTT Provider Access Networks Devices Other Network Symbio Networks Other Network NBN DSL Wifi 4G • Static Geo & Mobile numbering plan • Number porting into the Cloud • Voice delivery across any path & access • Flexibility to pick features • Multiple OTT providers • Flexibility of access • Flexibility of device or platform Slide 13
    14. 14. Conclusion OTT service delivery is the future Apps are the gateway to your user Almost limitless reach – 24x7 Global Still plenty of opportunity How are you going to make it? Slide 14
    15. 15. Thank-you 15