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In a Bid to Keep Voice Alive, AT&T Courts Developers

The carrier hopes that encouraging innovation will prolong the life of its voice business.
January 11, 2013

AT&T hopes to reverse a trend that has seen Skype and other Internet telephony services start to displace its voice-call business over the past few years. The carrier is now encouraging outside programmers to create voice and messaging apps that use its customers’ traditional mobile phone numbers.

In announcing a new programming interface earlier this week in Las Vegas, the company turned to one of its many disruptors, Tropo. That company already provides voice and messaging apps over the Internet, and its platform will form the basis for developers to write apps that manipulate mobile calls—changing how calls are placed, received, and forwarded—and that merge voice messages with text-messages and e-mail.

Over the past year or so, operators around the world have moved in a similar direction. Telefonica, the Madrid, Spain-based carrier with operations in several countries, launched Tume, a messaging and voice app that adds shared photos to the mix. The European carrier Orange late last year launched its Libon—with multiple voice and messaging apps, including voice-mail that allows you to customize your greeting for each caller and see icons of their faces. And in the United States, T-Mobile’s service Bobsled—which also provides ways to consolidate voice, text, and social media communications—has taken off in the past year.

One early application using the AT&T interface is Myanumber, a service geared toward families. A child need only remember one number: if Dad doesn’t answer, the call goes to Mom’s phone; if she doesn’t pick up, it gets forwarded to a friend. The call could be set to be delivered to a phone, or through a Web browser; and an attempted call could be turned into a text-message, or a voice-mail attached to an e-mail message.

The API is part of a larger effort by AT&T to court developers (see “AT&T Looks to Outside Developers for Innovation”), which included a hackathon in Las Vegas last weekend that attracted 400 developers.

Even as smartphone adoption surges, the reality for carriers is that revenue from mobile voice and messaging around the world is expected to decline about $1 billion a month this year—from a total of $758 billion in 2012 to $746 billion in 2013—according to Yankee Group, a Boston-based analyst firm.

“What they’ve lost in terms of voice and SMS usage and revenue has been largely replaced by data services,” says Richard Karpinski, a senior analyst at Yankee Group. “The time is right for them to take some risks and innovate on the voice side.”

Even if innovative apps don’t generate new voice revenue, the hope is that they will help keep customers in the fold. Carriers are increasingly wary that cool new innovations—such as Snapchat, an app that lets photos sent by text vanish after a few seconds—can catch on fast.

“A lot of small companies can create something completely new, overnight, and if it catches on, it can spread broadly, and completely change how communications is done,” Karpinski says. The messaging app Whatsapp has taken business away from major mobile operators, particularly in Europe.

Last year, Verizon and AT&T both made an early step to get ahead of such trends. With new Web-based messaging and voice apps cropping up, the two U.S. giants started including unlimited voice and text-messaging in some data plans. “If AT&T is not taking these actions to provide better solutions, there are over-the-top [Internet-based] players who will do the same thing,” Ed Schmidt, AT&T’s executive director of platform development, said in an interview from Vegas.

Depending on how developers merge different services, AT&T and other carriers can act as “the connective tissue between various over-the-top voice/messaging services, turning competition from a negative to a positive,” Karpinski added.

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