As we’ve recently finished another round of the Austin, Texas based South By Southwest (SXSW) extravaganza, there has been a great deal of media attention to a number of “new” alternative messaging providers: Kik, Beluga (recently acquired by Facebook), Fast Society, GroupMe, What’s App, TEXTme, and Ping Chat to name a few. There are so many, I’m starting to lose track.
You’ve all heard me discuss NUVOs – the Network Unaffiliated Virtual Operators, AKA Over-The-Top (OTT) service providers. However, I think now, with all of the recent publicity about these alternatives to SMS messaging (and MMS as well), we need to take a step back and try to understand just want is the difference between this crop and the more established NUVOs including MediaFriends’ HeyWire, Pinger’s TextFree, Gogii’s TextPlus, Google Voice and Toktumi Line 2. There are several distinct differences and some may determine whether these companies ultimately succeed or fall by the wayside.
This is by far, the biggest differentiator that the true “NUVOs” offer. Without Telephone Numbers, the messaging service, no matter how brilliant, cannot interoperate or interact with the largest, most comprehensive social network or all – the 4.5+ billion SMS users around the world. This is a key differentiator of HeyWire, TextFree, Google Voice, TextPlus and Line2 – they all assign TNs to their subscribers.
Many of the newer one’s, without assigning telephone numbers, call themselves “texting” applications – true you enter text and can send messages to other subscribers of the same service – but to anyone with a mobile device? This is not possible, today. Conversely, how can someone with a messaging application, but not on the same service reach out to someone within another group? Again this is not possible, unless both utilize telephone numbers as a global addressing standard.
This is why we have international standards. Today, a TextFree subscriber can send and receive messages from a Google Voice subscriber or a HeyWire subscriber just as easy as they can exchange messages with a mobile network operator (MNO) such as Verizon or T-Mobile or Vodafone. The common addressing mechanism? Telephone numbers. International standard telephone numbers. Until there is an international and interoperable addressing mechanism that is backward compatible with the E.164 telephone number, there will not be such a global community of the scale to today’s world telecom ecosystem.
In the early days of SMS, one of the single factors that helped SMS reach the heights of ubiquity that it enjoys today was interoperability among different operators. These newer “texting” applications do not enjoy that same benefit. Consequently, all they have created are disparate islands. While I wish all of them the best of successes, I do worry that, at some point, their business model may collapse, as they ignore the benefits of becoming interoperable with other services. Perhaps some will gain enough subscribers and momentum to become a viral and disruptive technology. Certainly, the micro-blogging service, Twitter has done that. But, then Twitter is not a Person to Person communications medium, like texting is.
What truly amazes me is the significant amount of innovation coming from the NUVOs. They all have significant differentiators – in fact, if you look at each one individually, you’ll see features and capabilities that you wish you had on whatever service that you have chosen to use. One significant feature that most are implementing in unique ways is the ability to create and label groups or communities within their ecosystem and some extending to others (again, via the use of phone numbers). When a group member sends a message to others in the group, all group members will receive the message. Group administrators as well as members can control how messages are received. GroupMe assigns Telephone Numbers to groups, so individuals with other numbers (or on other services) can access groups via the a specific TN. You can try them out and see for yourself how each are differentiated. Some true NUVOs are messaging-only (HeyWire, TextPlus) ; others are messaging and voice (TextFree, Line2, Google Voice).
Facebook and Beluga
Now let’s circle back to the non-TN, OTT players. I don’t call them “NUVOs” as they don’t quite fit what I consider the “classic definition.” Facebook made a easy move towards this space when they acquired tiny Beluga – a pure Group Messaging player. But Beluga has not been using TNs for their subscribers. Furthermore, Facebook has made several statements as to how "relatively soon, we'll probably all stop using arbitrary 10-digit numbers and bizarre sequences of characters to contact each other. We will just select friends by name and be able to share with them instantly." As noted in a previous blog (and article in Network World), I think that is going to be a tough sell. It still remains to be seen what Facebook will do with Beluga, but this industry will be watching closely. Facebook Chat does not have a strong “group chat” capability, so I do presume that is where they will focus Beluga’s technology. As to “taking aim at the messaging cartel,” I’m not sure that Beluga was the optimal choice to incorporate that would give them that “power.” Still 500 million subscribers is nothing to sneeze at and they continue to grow in both subscribers and influence.
Don’t count out the incumbent Mobile Network Operators (MNOs) by any stretch of the imagination. While NUVOs are innovative and growing in influence and reach, they are still relatively small. After all, 5 billion global subscribers aren’t all of the sudden going to stop using SMS, MMS, and their own MNO’s voice services. MNOs have a long history of innovation, themselves. They got us to where we are today, making it completely possible for NUVOs and other potentially disruptive technology to exist. I would even venture to say that powerhouses like Facebook would not be where they are today, were it not for the global MNO community. As we have just completed the 2011, spring CTIA trade show in Orlando, SXSW, and Mobile World Congress, there is plenty going on – not withstanding, the potential upheaval in the US market in the next 12-18 months. The NUVOs are still primarily a North American Numbering Plan phenomenon. They have done a great deal to help messaging grow, as they are greatly expanding the “universe” of devices that support P2P communications such as messaging and voice. MNOs know this and are and will continue to be watching how they can partner with and leverage these innovations to retain and grow subscribers as well as protect and grow ARPUs. In fact, this type of MNO and NUVO partnering is now happening. Sprint and Google Voice announced at CTIA that Sprint subscribers may use their mobile TN as their Google Voice number. This is absolutely HUGE and shows just how an independent NUVO can easily partner with an established MNO. A brillant and brave move for Sprint and one that will likely pay off, well.
During this year, it is likely that NUVOs will begin to pop up in other countries, witin those countries numbering plans. Furthermore, you may see partnerships between NUVOs, ISPs, and new generation IP network providers. Stay tuned and watch closely, because this part of the industry does and will change rapidly.