Swisscom's Rupp on Virtual Reality

Virtual reality and 360-degree video are emerging opportunities for operators. While the market is still very nascent and the opportunity still undefined, some operators are moving forward with new platforms to develop a strong market position for when the market eventually takes off.

Swisscom AG (NYSE: SCM) Event & Media Solutions, a division of the operator that specializes in providing ICT infrastructure for music festivals, corporate shows and other events, is one such organization. It has developed a strategy to leverage the operator's network and distribution assets to help deliver immersive video experiences.

The group's entry into the space is an interesting story in itself. Given the still-emerging nature of virtual reality (VR) and 360-degree (360D) video, awareness and interest were comparatively limited within the organization. However, its CEO at the time chose to institute an organizational restructuring that reduced his own authority and gave more freedom and accountability to the team members. The idea for the 360D coverage came from team members rather than management, and Stefan Rupp, now the chief digital officer of the division, fully credits his team for the company's initiatives in this emerging market space. (See Swisscom's Rupp: Flat Team Structure Drove VR Innovation.)

Rupp, a 23-year veteran in sports and concert event production in Europe, described the virtual reality initiatives of Swisscom Event & Media Solutions AG and shared his thoughts on the future of VR in an interview with Telco Transformation.

Telco Transformation: What are the kinds of the 360D services you provide?

Stefan Rupp: Basically we connect content producers with communities. The content guys don't have the reach -- they can't reach people. For VR, the community isn't there yet, but we believe it is coming. We have to start to build early.

We are still trying to figure out key content areas. What to prioritize -- sports, entertainment, tourism. Also retail may be an opportunity, and also industry -- maintenance, training ... not consumers as such.

But already we have a lot of content, a lot of production. And we understand the consumer side, the producer's side, the sponsor's side. [As the network provider] we see everyone's experience, everyone's point-of-view.

But we still need to make it work in terms of conversion, analytics. In all these things we are behind the big players. And we might work with them potentially, in areas where others are strong. [Having the analytics piece] is necessary to give customers insight into how it works, how it’s happening over time; otherwise they won’t know VR works.

TT: Can you give us some examples of what you are doing today?

SR: We have developed Virtual Switzerland -- it's the biggest community in terms of clients. We have 2.7 million clients for Swisscom. Obviously the VR users are a very small percentage today, but we've started early, and we'll be ready [when the base ramps up.] And we work with Swisscom TV, the biggest TV service provider in Switzerland. It can make VR possible, you can receive VR on many devices -- smartphones, tablets, etc.

TT: How do you see the VR space evolving in the future?

SR: If you are in VR, you get the impression that VR is everywhere. But if you look for activity, it is actually very small. It will get big when you have the chance of reaching a big community. You can't do that while you have big tech hurdles -- latency, bulky goggles, wires... it may not happen for three years. But it could happen very fast also. But let's say in five years, I think we will see some of these tech limits go away. And some will go faster -- many gamers are OK with goggles, they don't find them too heavy.

For the larger community, maybe they will need a richer experience on the smartphone. That's also the VR vs Augmented Reality (AR) argument. I don't see them as competitive as such. But I do see a big push for AR, as it's much more accessible and moving faster.

I think the VR segment will also exist but there will be a big shift to AR because there are no huge technology hurdles. [Currently] we are all geeks here, [happy to be] fumbling with technology, but it needs to be easy if you want to get a huge community to use it.

Pokemon Go showed very well how fast you can get people into new technology. It was huge and very fast. But that's also why it's difficult to predict.

Personally, I hate people who are sure about the future, because they tend to be wrong anyway. Maybe three to five years VR will take off. But equally, we may see some totally new technology in the holographic area, which offers totally new experiences. Then we'll face a totally different market!

— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation