How Telcos Beat the Voice Minute Consumption Model

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Esta publicación también está disponible en español. Haz clic aquí para ver la versión en español.

Telcos have traditionally sold voice minutes as the basis for their business model. It’s no secret that traditional ‘minutes’ revenue is at risk as users focus on apps that use data rather than traditional calls and texts, even for their phone calls and messages.

Third party over the top voice over IP (VoIP) applications enable smartphone users to talk and chat with one another with greater ease and near global coverage as long as the users at both ends of the connection use the same application. While these applications drive additional data consumption, from the carrier’s perspective, the incremental data usage revenues do not make up for the erosion of traditional minutes revenue. Popular VoIP apps, such as WhatsApp, are free for download and use, and the carriers do not generate revenue from selling or using the service.

Voice Monetization is (almost) Dead: Now What?

With their traditional mobile subscriber business squeezed, telcos are doing what they can to be more innovative and transition their focus to services. Their goal is to transform their business model from ‘network-centric’ to ‘service-centric’ by focusing on a new generation of innovative and in-demand digital data services that they can monetize.

Secure Voice and Messaging as a Service

KoolSpan has partnered with several telcos around the world to develop service offerings of secure mobile communications for both voice and text. Carriers offer these solutions initially to their business-to-business (B2B) customers, including government organizations, enterprises and even small and medium sized businesses (SMB). As demand accelerates, several leading carriers are also rolling out “prosumer” and consumer secure communications service offerings.

The Result? Carrier Perceived as a Trusted Security Service Provider

While secure communications services vary slightly from one to the other, they share a common foundation of end-to-end (E2E) encryption. However, KoolSpan’s high definition (HD) audio quality and robust performance across a wide range of network environments exceeds the quality and performance of both regular calls and all other VoIP calls, so that users who are not satisfied with their free, “you-get-what-you-pay-for” app are willing to pay a nominal fee for KoolSpan TrustCall. End users are replacing WhatsApp with TrustCall because of the security and quality advantages.

Customers are happy with TrustCall and the security it provides, leading them to perceive their carrier as a trusted provider.

Customers Return for Additional Security Services

Telcos that build “value-add” packages around secure mobile communications can open up additional business and revenue streams. We have seen value add offerings including mobile device management (MDM), device security/tampering services, anti-malware and others.

Transformation of Traditional Telco Business Model

Bottom line, delivering TrustCall secure voice and messaging to B2B customers transforms their business model so that not only does it drive direct higher ARPU, but it also enhances the trusted provider relationship for carriers with their customers, leading to multiple new revenue streams. Key points for carriers to consider:

Secure voice and messaging for the business market is an innovative service that provides new revenue streams
Adding security creates a strong competitive advantage
Protecting confidential information exchanges brings new customers from competitors, reduces churn and increases customer satisfaction

Interested in joining our happy and satisfied telco partners? Let us know!

Nigel Jones

Nigel Jones brings to KoolSpan over 20 years of experience in operations, financial management, private equity, and mergers & acquisitions, with a demonstrated track record of success. Nigel has been a partner at private equity investment firm TWJ Capital since 2006. Prior to joining TWJ Capital, Nigel was a Principal at the Carlyle Group, where he was a member of the U.S. Buyout team focused on the aerospace, defense, and federal technical services sectors. Prior to joining Carlyle, he was an Associate in the Technology Investment Banking group at Goldman Sachs & Co. Nigel holds a Masters of Business Administration degree from the Stanford University Graduate School of Business and a Bachelor of Arts degree (magna cum laude) from Harvard University. Prior to business school, Nigel was a commissioned officer in the United States Marine Corps from 1991 to 1995, with a focus on secure voice and data communications. Nigel is a member of the Board of Directors of the Marine Corps Scholarship Fund.