Openmind looks at the impact RCS decision from Google could have on messaging fortunes of mobile telecom operators
Until a few weeks ago it was a commonly held belief across the mobile industry – albeit incorrect in our opinion – that there was no palpable business case for rich communication services. One of the strongest arguments against RCS was the fear operators would struggle to recoup any investment in the enabling technology as it wouldn’t deliver any significant new revenue-generating services. However, Google has now stepped into the arena and announced it is going to bring RCS to the masses by embedding native RCS capabilities within Android devices. The initiative has the capability to enable operators worldwide to provide an open, consistent and globally interoperable messaging service across the OS market share of smartphone devices – placing RCS firmly in the hands of potentially billions of users. Surely will this be the push operators need to take RCS seriously?
The OTT battle
For mobile operators, rolling out RCS services could provide them with an opportunity to win back market share and associated revenues in communication services they’ve previously lost to over-the-top providers. Currently, mobile network operators offer standard voice calling and text messaging, while OTTs such as Whatsapp offer an extensive set of features at a fraction of the cost. Initially seen as free and trendy value-added services, OTTs are now held as the gold standard in communication services by customers and, most importantly, are making significant amounts of money (revenues for messaging service Line in Japan, for instance, are in the order of $110 million).
Of course MNOs want a slice of this lucrative pie. However, to do this they have to evolve their messaging services and business models to incorporate new, enhanced, rich platforms to meet the growing expectations of 21st century users. Crucially for MNOs, these messaging services need to interwork globally just like text messaging does today.
Accelerating the RCS movement
Google’s announcement has accelerated the RCS movement. The promise of a universal RCS profile whereby mobile operators should be able to deploy a consistent RCS implementation, feature set and configuration has piqued the interest of many operators. And why shouldn’t it? According to IDC’s top-line projections, Android shipments will grow from 1.17 billion in 2015, to 1.62 billion in 2020, and its share of the smartphone industry will grow from 81% to 85%. With this projected growth and the predicted number of Android devices on the rise – all possibly with the native capability to host RCS – MNOs should be taking the RCS debate seriously. For an industry that has struggled with the business case for RCS, Google’s RCS play will finally give operators a golden opportunity catch-up with the OTT offerings.
For MNOs, the RCS client provided by Google will be based on a universal profile, enabling consumers to access RCS services from their devices (as long as they are also supported by their operators). Innovative new features such as group chat, high-resolution photo sharing, read receipts and more were previously exclusive to the OTT players; these features could now become part of the operator messaging experience. According to the GSMA, this would enhance the experiences of over 4 billion text messaging users worldwide. Where RCS differs to OTT channels is the ability to provide these services through a regulated and safeguarded network, therefore creating a consistent level of service that cannot be achieved by OTT players. Mobile operators will be able to deliver controlled and secure IP messaging systems.
Cloud-based implementation
Although the business case to march forward with an RCS offering has spiked, the argument concerning the cost for implementing an IP multimedia subsystem infrastructure is still under scrutiny. However, operators who are concerned with the initial cost of implementation should opt to test and implement these services via cloud-based hosted RCS platforms in parallel to upgrading their own infrastructure to support RCS. This approach provides extra flexibility and allows operators to begin to rapidly develop, test and deploy new richer communications services with reduced risk, disruption and cost.
Mobile messaging has never been more central to people’s lives. Carrier text messaging is used by billions of people every day and enables people to reach anyone around the world, regardless of their device, carrier, app or location. RCS is a new standard for carrier messaging.
The spotlight Google has shone on RCS has raised the profile and moved the conversation on in leaps and bounds. Nevertheless, for RCS to be a success mobile operators not only need to create an infrastructure that supports their own RCS offerings, but also offer a system that connects operators globally and establishes interconnections directly between mobile operators. Put simply, the RCS conversation is in full swing but, as is often the case with innovation, more needs to be done. What remains constant is that operators must continue to evolve their core messaging and voice services, or face the inevitable irrelevance in the eyes of consumers.
Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
