Real-Time Communications: Catching the Next Wave of AI and Chatbots

Real-Time Communications:
Catching the Next Wave
Application to Innovation Summit
13 June 2017
Pamela Clark-Dickson, Practice Leader
Digital Communications and Social Networking, Consumer Services
pamela.clark-dickson@ovum.com
@PamelaC_D

Ovum | TMT intelligence | informa2 Copyright © Informa PLC
 Ovum view
 Consumer communications: from analog to automation
 Enterprise communications: Meeting the needs of the omni-channel consumer
 AI and chat bots: The art (and science) of automated comms
 The Internet of Things: Everything connected
 Conclusions and recommendations
 Q&A
Agenda

Ovum view
 2015-20: Fourth half-decade of distinct step-changes in
communications technology since 2000
 Chat apps leading the charge
 Enterprises need to be where their customers are
 AI is everywhere – or is it?
 IoT permeating into verticals; security and utilities leading use cases
for consumer market (smart home)
 WebRTC already underpins many consumer and enterprise services

Consumer communications: From
analog to automation

From 2000: The evolution of communications

OTT communications mobile monthly active users and traffic to more than double by 2020
Global, mobile monthly active users, 2013-2020
• 3.18 billion unique global mobile
monthly active users (MMAUs) of
chat apps by 2020.
• 68.8 trillion total annual chat app
messages (text, picture, video)
• Traffic growth drivers:
• Increased penetration
• Conversational nature of IM
Source: Ovum OTT Messaging Forecast 2016-20

P2P SMS declines as use of OTT communications apps grows
• Global mobile messaging traffic falls to 4.54tn messages in 2021.
• Total messaging revenues decline to $54bn.
• Decline driven by growing penetration of chat apps.
• 64% of consumers in China, Japan, UK and US are MMAUs of chat apps (57% in 2015).
• 20% use on their tablet (13% in 2015).
N=4,003. Countries: China, Japan, UK, US
Question: Do you regularly (i.e. at least once a month) make use of the following services
on any of these devices?
Source: Ovum Digital Consumer Insights 2017: Communications, Commerce and Media
Source: Ovum Mobile Messaging and Revenue Forecast: 2016-21

Chat apps expanding in all directions - communications
•Messaging
•Sharing
First
wave
•Voice
•Video
Second
wave
•Digital
assistants
•Bots
Third
wave

Visual communications services expand in scope and functionality
Emoji and chat
bots
Augmented realityVideo callingSelfies and filters

Consumer use of video calling leapfrogs voice calling on chat apps
Source: Ovum Digital Consumer Insights 2015/2016: Disruptive Communications, Ovum
Digital Consumer Insights 2017: Communications, Commerce and Media
• 39% of consumers use video calling on their
mobile phone in 2017.
• Usage increased from 25.7% in 2015/16.
• Use of video calling on mobile phones grew
from 13.9% in 2015/16, to 30% in 2017.
• In Japan, video calling more than tripled in
2017, to 24%.

But telcos still have some cards to play in provision of consumer services, and must use
these to seek out and cement new revenue opportunities
Network ownership:
• Control quality and coverage –
churn reduction
• High-speed data via LTE
• High quality voice over VoLTE
• Wi-Fi calling plugs network
gaps
Customer relationship:
• Trusted provider
• Upsell traditional telco
services
• Cross-sell non-traditional
telco services/VAS (e.g.
insurance, smart home, IoT)
• Retail store network
Multi-play:
• Mobile/wireless, fixed,
broadband, TV
• Upsell multi-service bundles
• Enables content partnerships
Partnerships:
• Single access/billing point for
third-party services
• Package media and content
• Package non-digital services

Enterprise communications:
Meeting the needs of the omni-
channel consumer

Communications is becoming more contextual, giving rise to omni-channel customer engagement
SMS
Web (no
agent)
Social
media
Web
chat
Chat
app
E-mail
Voice
MMS
Income
Age
Gender
Location
e.g. city,
village
Games
console
Tablet
Smartphone
Desktop/
laptop
Network
Industry
vertical
Use
case
Generation X
Babyboomer
Millennial
Centennial
Traditionalist

The trend towards omni-channel: the right channel at the right time for the right customer
Omni-channel communications:
• Switch technologies as
appropriate during a customer
interaction
• Transactions may start and
end in different channels
• Enterprise platforms must be
flexible and adaptable

Consumers use multiple communications channels to interact with their service providers:
E-mail, web, SMS are still key
Question: How do you typically access the following customer care functions from your service providers (such as a retailer, a bank or a government department)?

Little has changed since 2016: E-mail, voice and web chat predominate consumer
preferences for various customer care use cases
N=1,000. Countries: Germany, US
Question: Given a choice, how would you like to interact with your service providers’ customer care departments for these purposes?
Source: Ovum Customer Engagement Survey, 2016

Consumers are also starting to use chat apps to interact with service providers in multiple
industry verticals
Question: Would you like to interact with your service providers (e.g. telcos, banks or
government departments) using a chat app?
Question: Do you currently interact with any of the following service providers using a chat app?

AI and chat bots: The art (and
science) of automated comms

Artificial intelligence in extremis: Humanity cedes control to machines, with dire
consequences
Source: The Matrix, 1999
Source: WALL-E, 2008 Source: Doctor Who, 2017
Source: Terminator, 1985
Source: 2001: A Space Odyseey, 1968

The reality may be less dire, more utilitarian: self-driving cars, digital assistants, smart homes

Smartphones and tablets dominate digital assistants to 2021, with Google Assistant to lead
the market
Global voice AI–capable device installed base by sub-segment
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2015 2016 2017 2018 2019 2020 2021
Installedbase(000s)
Apple Siri
Google Assistant
Amazon Alexa
Microsoft Cortana
Samsung S-
Voice/Bixby
Google Now
Chinese assistants
Global digital assistant installed base by vendor
Source: Ovum Digital Assistant and Voice AI-Capable Device Forecast 2016-21
Source: Ovum Digital Assistant and Voice AI-Capable Device Forecast 2016-21

Beyond the hype: consumer use of digital assistants and chat bots is still very much
nascent
Question: Do you use, or have you ever used a digital assistant (e.g. Siri, Cortana)?
Question: Do you use, or have you ever used a chat bot (i.e. an interactive "mini-app" that lives within a
communications/chat app and which can use artificial intelligence to mimic conversation)

Benchmarking key digital assistant offerings: As an emerging consumer technology,
geographical reach is still low
Name Languages Countries Voice identification? Native deployments Smart home
compatibility?
Developer platform?
Amazon Alexa 2 3 No 14 Yes Yes
Google Assistant 5 5 No 2 Yes Yes
Apple Siri 21 36 Yes 13 Yes No
Microsoft Cortana 8 13 Yes 45 No Yes
Hound 1 1 No None (app only) No Yes
Source: Ovum Consumer Facing AI Assistants Benchmark, April 2017

Telco AI initiatives: Telefonica Aura  AI-enhanced customer care platform – Telefonica’s ‘fourth platform’.
 Objectives:
 Give customers visibility and control over personal data and services
 Secure environment/data sharing with third parties
 Use AI for sophisticated, proactive customer engagement.
 KPIs: decreasing churn, increasing upsell/cross-sell.
 Availability:
 Spain, UK, Germany. By February 2018.
 Multiple platforms: mobile app, Microsoft HoloLens (VR), Skype,
Amazon Alexa, Amazon Echo
 Technology partners: Microsoft (Cortana), IBM.
 Services partners: Unicef, ProFuturo, Facebook and Caixa Bank.
 Features:
 ‘Personal data space’ (cloud storage)
 Timeline (chronologic data view).
 Use cases: user-led service discovery and provisioning, technical or
product support, usage alerts, security installation, vulnerability
tracking.
Telco AI initiatives: Telefonica Aura takes customer engagement to the next level

The Internet of Things:
Everything connected

The IoT is in everything: The smart home, wearables, toys, connected cars . . .

Security and utilities dominate smart home device sales to 2021
Source: Ovum Smart Home Devices Forecast: 2016-21
Smart home device unit sales by category, 2015-21

Broadband service providers are engaging with the smart home opportunity

The Internet of Things: many touch-points into enterprise
 700 million cellular M2M connections by 2021.
 Managing the ecosystem represents significant
challenges for enterprises and telcos.
 Real-time communications between
devices/machines/systems is key.

WebRTC is an underlying technology in many third-party communications apps – and the
stats show significant engagement (users are likely unaware)
Google and non-Google consumer and
enterprise communications apps are
already using WebRTC
WebRTC stats as of June 2016 (just about
due for an update!)
Description Data point
WebRTC-enabled browsers 2 billion+
Audio/video minutes sent per week
(Chrome only)
1 billion+
Data channel traffic per week (Chrome
only)
500TB +
WebRTC-based companies and projects 950+ - up to 1,200 as of May 2017
WebRTC acquisitions 30+
Sources: Google, bloggeek.me

Telcos can use – and are using! – WebRTC as a building block for B2B and B2B2C services,
including IoT
• Firefox Hello: video chat service
• Royal Bank of Scotland (Coutts):
online consultations between
customers and wealth advisors
• Esurance, Valspar: post/pre-sales
support eg color consultations
• Chegg Tutors, Cambly,
TalkAbroad, San Francisco Minerva:
tutoring, online classes
• Genentech: consultations
between physicians and scientists
• Fluke, ConceptBoard,
TakeTheInterview: workforce
management, collaboration,
recruitment
B2B2C B2B2C B2C, B2E

So, what is the next wave of communications?
2000 2005 2010 2015 2020
2003:
Skype,
LinkedIn
Fixed IP-based
communications
Mobile IP
communications:
smartphones, mobile
apps, social media
App-based
communications:
Chat apps, tablets
Automated
communications: AI,
chat bots
2004:
Facebook
2009:
WhatsApp,
Samsung
Galaxy
2007:
Apple
iPhone
2008:
Apple
App
Store,
Android,
Android
Market
Kakao-
Talk,
Instagram,
Apple
iPad,
BlackBerry
World
2011: Line,
WeChat,
Facebook
Messenger,
Snapchat,
Apple Siri
2012:
Viber,
Google
Play 2013:
Telegram
2014:
Signal,
Amazon
Alexa
Facebook
M,
Telegram
bots
2016: Google
Assistant,
Google Allo,
Duo; Bot
platforms:
Facebook.
Skype, Line
2006:
Twitter
2017:
AI: Kakao Brain, Live
Clova;
Visual communications
BBM,
Voxbone
2001:
Vonage
The communication
of things? Integrated,
contextual
communications?
2025

Conclusions and
recommendations

Conclusions and recommendations
 Communications will increasingly be omni-channel,
multi-device, visual, contextual, and enriched with AI.
• Telcos need to look for opportunities that
dovetail with their assets.
 AI has been coming for a long time, but finally looks
like it is just about here.
• Telcos need to decide if they wish to participate
(e.g. Telefonica). If so, partner for expertise.
 Success of Internet of Things relies on stable, reliable,
high speed data networks.
• Telcos need to be front and centre on this, and
make sure they wear their services hat too.
 WebRTC is a nascent technology, but it is already well-
established as an enabler.
• Telcos have probably missed the boat on
WebRTC-based consumer services – should look
to enterprise.
OR

Thank you
Q&A

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