The CMA’s seminar in March will explore the SIP – Session Initiation Protocol – and examine how ‘next generation’ services can deliver benefits for big businesses.  It is, after all, the big-spending major customers that keep Telco’s ticking over.

For some – mainly smaller businesses and consumers - the ‘next generation’ is already here in the form of VoIP services like Skype.  This proliferation of new services may be fragmented and non-conformist from a Standards viewpoint but it celebrates a key feature of the Internet – the freedom to enable ‘innovation without permission’. 

The SIP is, of course, about rather more than Internet telephony.  The protocol can be deployed for a wide range of interactive sessions – video, messaging, games and all manner of automated controls.   But inevitably it is VoIP and the attractions of managed voice communications at low cost that grab the headlines.  Millions of Internet users around the world are not the slightest bit interested in how it all works – and they are not waiting for permission.

 Mainstream Telco marketing departments may not yet be saying it out loud in public but the minds of their strategists are everyday having to adapt to the quickening realities of IP Services pluralism.  Cats are leaping out of bags all over the place and the old ‘top-down’ monopolistic certainties have vanished into thin air. 

The stock Telco response points towards issues of quality and assurance – particularly for major businesses who are deeply concerned for the integrity of their own operations.  But even here corporate organisations (and large public sector bodies) are finding it easier than ever to take control of their own destiny – for example through Corporate Peering – rather than rely on traditionally slow-to-innovate suppliers. 

So how can the major Telco’s survive this double-trouble of customers who don’t care about Standards and those who care so much that they’ll trust no-one but themselves ? 

If we look to France, where alternative Telco’s have taken advantage of LLU, the impact on France Telecom has been dramatic – stirring the giant into a frenzy of innovation and lateral thinking that will one day be shrink-wrapped into MBA case studies on the virtues of competition and determined customer-focused regulation.   

France Telecom’s response to the low-cost alternatives is to offer unlimited national CD-quality calls for a fixed price of 10 €/month on top of the standard broadband tariff.   Home-grown competition is also delivering dividends for softswitch manufacturer Thomson-CIRPACK as they announce new deals all over Europe with ISP’s who can now become fully-fledged specialist IP Telephony providers.    

The new arrivals now routinely embrace the SIP – differentiating themselves from the early sanction-busting innovators.   To some extent they can take advantage of being below the regulatory radar.  Not being subject to the analogue obligations of universal service provision, they can move fast and cherry-pick in their chosen markets. 

Here in the UK the Telco’s major business customers are looking carefully at their options.  Do they see the regulator fighting on behalf of consumers and business customers?  Do they see competition unleashing new innovative energies? 

Do they still need permission to innovate or will the Telco’s hold the line? 

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First published in NetworkingPlus, February 2006