real-time communications catching the next wave

Real-Time Communications: Catching the Next WaveApplication to Innovation Summit

13 June 2017

Pamela Clark-Dickson, Practice Leader

Digital Communications and Social Networking, Consumer Services

[email protected]

@PamelaC_D

mailto:[email protected]

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, USQuestion: 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

N=4,003. Countries: China, Japan, UK, USQuestion: 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

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 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

N=4,003. Countries: China, Japan, UK, USQuestion: How do you typically access the following customer care functions from your service providers (such as a retailer, a bank or a government department)?Source: Ovum Digital Consumer Insights 2017: Communications, Commerce and Media


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, USQuestion: 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

N=2,016. Countries: China, Japan, UK, USQuestion: Would you like to interact with your service providers (e.g. telcos, banks or government departments) using a chat app?Source: Ovum Digital Consumer Insights 2017: Communications, Commerce and Media

N=3,659. Countries: China, Japan, UK, USQuestion: Do you currently interact with any of the following service providers using a chat app?Source: Ovum Digital Consumer Insights 2017: Communications, Commerce and Media


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 2021In

stal

led

bas

e (

00

0s)

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

N=4,003. Countries: China, Japan, UK, USQuestion: Do you use, or have you ever used a digital assistant (e.g. Siri, Cortana)?Source: Ovum Digital Consumer Insights 2017: Communications, Commerce and Media

N=4,003. Countries: China, Japan, UK, USQuestion: 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)Source: Ovum Digital Consumer Insights 2017: Communications, Commerce and Media


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,AppleiPad, BlackBerry World

2011: Line, WeChat, Facebook Messenger, Snapchat, Apple Siri

2012: Viber, Google Play 2013:

Telegram2014: 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



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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