Tag Archives: bt

internet, mobile, Web

Telcos have a dying business model – APIs and cloud services are the future says Alcatel-Lucent’s Laura Merling

2 Comments

Laura Merling from Alcatel-Lucent spoke at the Monki Gras conference in London earlier this week, saying in effect that telecommunication companies have a dying business model.

She gave a two-minute summary of Telco history.  “First it was all about voice,” she said. “Then the intertubes happened. Now you had data … then it went back to voice, the big push for wireless. Then of course wireless moved, so it’s not about voice any more, it’s about the data.”

She expects the next step to be “connected devices … the phone goes away, everything you do both data and voice happens on other devices.”

What does this mean for telcos? They have become commoditised, she said, suppliers of data plans. “It is a big commoditised business that has no real innovation.”

“In the future, the data plans dies,”, Merling says. “Think about it. How many devices have you got? Think about connecting all of those. You probably want the same data plan. But why pay for a data plan? How will telcos make money? You can’t just keep increasing the data plan.”

Instead, the money is going to come from the APIs and accessing the services.

Enter Twilio, a virtual telco. “I think of twilio as a craft telco”, said Merling, tying in with the beer theme that flowed through Monki Gras. “Do they sell hardware? No. They have software and APIs.” She says the Twilio business model scares the industry: it is based on transactions, not data plans. She also noted how old established vendors are buying up software-based providers, such as BT acquiring Ribbit and Microsoft acquiring Skype.

Tomorrow’s telco, says Merling, is a based on a software stack. “Antennas and towers are not going to go away, but the infrastructure becomes all software based … combining network services with cloud infrastructure.

“At Alcatel-Lucent we sell hardware. We sell big giant boxes. But this is where it is going.” She says the telcos are now aware of this, hence the title of her session “How telcos got API religion.”

Her final prediction? “Jeff Lawson becomes the CEO of AT&T. Why? Because the model has to change.”

It was a thought-provoking talk, though the unspoken question was whether in fact the telcos will successfully transition or whether they will simply become less important, continuing to maintain the pipes while others profit from what flows through them.

I interviewed Twilio CEO Jeff Lawson in October last year.

comment

BT selling Openzone wifi access by default through its customers broadband, some do not realise it

2 Comments

Yesterday I spent some time helping a small business sort out its new broadband and voice over IP system. They have signed up for BT business broadband and were supplied with a pre-configured BT Business Hub, a combined ADSL router, switch and wifi access point.

I was surprised to discover that the hub was preconfigured to share the wifi connection to the whole wide world, via BT’s Openzone service.

Openzone is not a free service, although many BT customers have unlimited access as part of their broadband package. Non-BT customers who want to use it have to pay BT for access minutes.

Why would anyone want to do that? Here is the reasoning BT offers in its FAQ:

Why would I want to enable the BT Openzone service on my hub?

With the growing need for people to work how, where and when they choose, Wi-Fi users provides a great opportunity for Wi-Fi access on the move.

Wi-Fi users requiring access on the move are constantly looking for new hotspot locations, as the UK’s Wi-Fi footprint continues to expand.

The BT Openzone service on the BT Business Hub can provide the same Wi-Fi access that ‘premium’ hotspots offer, but without the infrastructure costs. Businesses enabling this service on their hubs can raise the profile of their business in hotspot directories and generate a new revenue stream through voucher resale.

Well, anyone can resell Openzone access vouchers; it is not linked to the access you are offering so it is incorrect to call it a benefit. This is unlike BT FON, which is a similar facility for home broadband customers, but with the difference that if you offer hotspot access through your broadband, then you also get it free from others. The real benefit is that if BT has lots of customers who do this, you are more likely to get hotspot access yourself when out and about.

The benefit for BT is more obvious. More wifi hot spots, more revenue from Openzone customers.

Now, what about the downside? BT has a whole series of FAQ responses addressing understandable concerns like: does it impact security, what about someone visiting an illegal site, what about performance?

Despite BT’s reassurance, the security question is easy to answer. Opening your wifi access point to the general public cannot improve your security, but it could weaken it. The cautious should turn it off.

The key question though: are BT customers fully aware of what they have agreed to? I asked the business owner who had dealt with BT, and he had no idea that the general public was being allowed to ride the broadband access he had paid for, with any revenue going to BT.

Further, it is on by default, and BT admits it could impair performance:

If your broadband connection has reduced bandwidth (less than 1Mbps), your private broadband traffic may be overwhelmed. BT recommend that you disable the service via your BT Business Hub’s web interface to improve performance. For further information on how to do this, please see How can I turn my BT Openzone service on and off?

Note:

As the hub’s default setting is for the service to be enabled, you need to disable the service again if you perform a factory reset in the future.

While I have little doubt that the small print of the BT agreement permits this Openzone element, I still question the ethics of BT selling its broadband service, and then selling the same service again to the general public, without directly sharing any revenue with the first purchaser, and without a clear opt-in.