At the top of their list of revenue woes: international voice. After ten years of negative to zero growth, revenues from voice are predicted to fall to $50 billion by 2022 – nearly half of the market’s total worth in 2012. A large proportion of this decline can be attributed to the rapid rise of over-the-top (OTT) services and VoIP services such as WhatsApp, Facebook Messenger and Skype among consumers and businesses as well as the adoption of UC by enterprises. In fact, according to Telegeography, OTTs delivered 40% more international voice traffic in 2017 than all the global telecoms companies combined.
Yet, the challenges around declining voice revenues have been discussed for nearly a decade. The truth is, some wholesale carriers have been extremely slow to act and today they find themselves at a crossroads: innovate or face extinction.
Wholesale voice is not dead
While wholesale carriers may well be servicing a market that is half the size it was 10 years earlier, this does not mean that voice revenue opportunities no longer exist. There will always be a need for wholesale carriers to provide capacity and manage international communications, serving the needs of mobile network operators and multinational enterprises. In fact, for the industry survivors there is a significant amount of revenue to be won, but this will only go to those wholesale carriers that are willing to embrace disruption.
Until now, the wholesale voice business model has been focused on offering a set of basic, generalised products and connecting customers from A to B. Today, this way of doing business will no longer suffice. For one thing, this model does not account for complexity in managing many more supplier relationships with faster time-to-market and the ability to serve new demand. Nor does it consider the evolution in consumer buying behaviours and expectations – something that is drastically changing business models across all sectors and markets.
Wholesale voice trading now requires a greater depth of understanding of the customer and the entire value chain. It is no longer about selling a product and handing it off to the customer. For longer term success, wholesale carriers must be continually refining their solutions and services to solve challenges and anticipate the future needs of customers.
What do Uber and wholesale voice carriers have in common?
While many refer to Uber as a “disruptor” this may not be strictly true. Disruptive innovation occurs in two ways: when a start-up uses digital technology to meet the needs of low-end customers – needs that have otherwise been forgotten; or to create an entirely new customer base within a specific market. Instead, what Uber did was simple - offer a better user experience for taxi users. Customers of all kinds want the services they are purchasing to be easy to use. The wholesale business is no different.
User experience is growing in importance in the voice services market. Just like Uber, wholesale carriers can adopt a communications platform-based business model to meet this new demand.
By developing their own platforms, wholesale carriers can move away from product-by-product sales and offer customers seamless access to a variety of solutions - even those they may not have previously needed. Better still, with a platform approach the operational complexity that plagues the industry is hidden from customers, improving the experience further. What’s more, a platform-based approach can be shaped to serve different vertical needs and evolve as needs change.
As APIs become more commonplace within the wholesale communication industry, solutions like cyber security, AI-based routing or even SD-WAN offerings can be integrated. Rather than offering services product-by-product, wholesale carriers should innovate by focusing on experience - delivering value creation, sourcing the best solutions and identifying the best partners to serve their customers’ needs.
