RCS messaging is a huge opportunity but operators must work together to realize its potential

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Mary Clark, Chief Product Officer and CMO at Synchronoss, reflects on the RCS opportunity and what will be required to exploit it.

I remember ten years ago when the GSMA established the Rich Communications Service (RCS) steering committee and the telecom industry started work on how to take advantage of the new messaging technology.

Finally a decade later, operators are beginning to embrace the potential and the promise of RCS, and they are doing so together.

Two operator groups on opposite sides of the world have separately taken the first steps in this process. In 2018, Japanese operators came together to create a fully interoperable, RCS-based cross-operator advanced messaging platform. Then last October, the four largest mobile operators in the United States announced their own Cross Carrier Messaging Initiative (CCMI), a new joint venture to launch RCS-based advanced mobile messaging across all four of their networks later this year.

The motivation driving these two operator groups to accelerate RCS-enabled advanced messaging is clear: It’s subscribers’ appetite for easy-to-use, feature-rich messaging combined with operators’ own need to continuously improve the customer experience and create new revenue streams.

Consumers are ready

Early last year, Synchronoss brought together dozens of U.S. consumers of all ages to discuss their mobile messaging habits. One especially interesting finding emerged during the focus group discussions: Participants used the term “messaging” when they talk about OTT messaging apps such as Facebook Messenger or WhatsApp. The term “texting” was used when referencing traditional SMS exchanges.

What also became clear is that despite their use of multiple messaging apps, nearly every mobile user preferred using the native pre-loaded SMS messaging application on his or her device.

Why? Expectations for traditional SMS-based messaging are higher than expectations for OTT apps. Consumers consider traditional texting secure, private and reliable, and they know their personal contacts all have access to text – which isn’t necessarily the case with messaging apps. In other words, they trust tried-and-tested SMS to get the job done.

I fully expect consumers to discover even more value in texting once they experience RCS-powered messaging for themselves. When focus groups saw demonstrations of RCS and its extra functionality, the vast majority were enthusiastic about the new format and eager to try it for themselves. What was really appealing was being able to accomplish everything they currently do across multiple apps but from a single messaging platform and with a single contact list for friends, family and services.

Let’s be clear: RCS messaging won’t replace OTT messaging apps. But native messaging based on RCS is the next evolution of operator-led SMS and will play an essential role at the heart of the new messaging ecosystem.

Operators reap the rewards

RCS messaging gives operators three things they badly want today: improved customer engagement, ongoing loyalty and the chance for new revenues.

First: RCS vastly enhances the customer experience by providing a much richer messaging experience that incorporates multimedia plus a high level of personalization.

Second: Operators get to cash in on their hard-earned reputations as defenders of customers’ privacy, especially since some OTTs have come under intense criticism for their attitudes regarding customer privacy. RCS messaging offers privacy by design and the very same level of protection as SMS, and operators will be rewarded for their diligence in protecting it.

Finally: RCS gives operators a significant new opportunity to grow their revenue outside of traditional lines of service by being able to offer brands a feature-rich, permission-based direct marketing channel that consumers actually use.

According to Gartner, SMS continues to appeal as a valuable marketing channel for brands. Compared to email, text-based marketing messages have higher open rates, higher response rates and higher click-through rates. Combine SMS’s cross-network interoperability with customer appetite for the content-rich, personalized brand interactions that RCS enables, and it’s obvious that operators are sitting on an opportunity potentially worth billions of dollars.

Early RCS marketing trials are already delivering impressive results. A trial by fast food chain Subway used RCS for real-time, image-rich AI-driven conversations to personalize the ordering and checkout process. During the trial, Subway experienced a 146 percent uplift in orders and a 50 to 60 percent increase in conversion rates. These types of figures will only increase interest in RCS from brands that want to achieve substantially higher open rates and vastly improved customer engagement.

The RCS revolution is here

Two years ago in 2018 on stage in Barcelona at Mobile World Congress, Synchronoss CEO Glenn Lurie talked about future challenges. He told operators that the time had come to take advantage of new and innovative technologies and the benefits of collaboration with each other. Since then, operators in Japan and the United States – two massive markets – have prioritized collaboration and cooperation to create a truly differentiated customer experience via RCS-based messaging.

This is monumental and just the beginning. The progress made around RCS over the last 12 months shows what our industry can achieve with new technologies and by working together. Today’s mobile ecosystem is primed and ready for the massive step change that is operator-driven RCS messaging.

However, operators who continue to procrastinate and ignore the opportunities that RCS presents will face a future of disappointed subscribers and lost revenue. The time has come for us all to put aside our differences and join the RCS revolution together.

 

Mary Clark is the Chief Product Officer and Chief Marketing Officer of Synchronoss, responsible for global product management, marketing and communications. Prior to joining Synchronoss, Mary served as the CMO and Senior Vice President of Roaming at Syniverse. Throughout her 25 years in mobile, she has held several executive-level positions and currently serves as a Board member for The CTIA Wireless Foundation and is an industry advisor for Astra Capital Management.

 She has been an active industry speaker as well as a contributing writer for Global Telecoms Business and CMO.com. Mary is a champion of gender diversity and has been heavily involved in the Women4Tech program founded in 2016, the GSMA’s program on promoting women leadership in mobile technology.Her recognition spans from being named to the National Diversity Council’s Top 50 Most Powerful Women in Technology” list in 2016 and 2017 to Mobile Marketer’s “Mobile Women to Watch 2016” list. Most recently she was named to Capacity Magazine’s 2018 20 Women to Watch 2018, a list of some of the most prominent women in telecom.

RCS marks new age of customer engagement for operators

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece John Wick, GM of Global Product at Syniverse, make the case that RCS’s time has finally come.

It’s been a developing technology for more than a few years now, but Rich Communication Services (RCS) is finally coming to fruition and ready to make the impact that mobile operators and brands alike have been waiting for. There’s been no shortage of hype around this technology – and with good reason – but the tipping point is at last approaching when traditional text messaging is expected to have to make room for the functionality that RCS promises to bring.

Once past this point, operators will be handed new keys to the kingdom to be able to work more closely with brands of all sizes and industries. What’s more, operators will be positioned to become a more fundamental, revenue-generating partner at the centre of audience, employee and customer engagement.

So why are brands getting excited?

Put simply, RCS brings intuitive, engaging, and sticky brand experiences for driving long-term loyalty and becoming a central point of contact in a consumer’s life. This technology will transform messaging by taking its best functionality and giving it a 21st century upgrade, with features like high-resolution imagery, advanced video and audio capabilities, location information, and analytic feedback, just to name a few.

Let’s take a closer look at what opportunity this will mean for operators.

Brand and operator synergy
The industries set to benefit by RCS are wide-ranging. However, to begin to put this potential in perspective, let’s look at the hospitality sector. Imagine you’ve booked a hotel room after searching online, received a text message from the hotel thanking you, and then received your reservation details. This itself isn’t revolutionary – it’s standard, one-way interaction.

The opportunity with RCS, however, brings this interaction to another level. RCS-based conversational messaging will allow your hotel to suggest on-site amenities, such as dining options; or to book you a table by simply clicking a button; or to offer you a 10% discount off your bill. This can all be delivered within an RCS message, with no need for you to jump to another platform, such as the hotel’s app or website, and thereby enable one integrated, uninterrupted user experience.

Build a partner framework into this, and you’re able to suggest local attractions, discounted events, and local special retail offers, just to name a few things.

Moreover, this opens a whole ecosystem through which both the brand and the operator can drive revenue. From a customer perspective, it makes the booking richer, more valuable and more integrated with the stay. It’s more than just a text telling you your room number.

Additionally, from a functionality perspective, an interaction can be handled through a chatbot within a single messaging stream. There’s no departure from the network. This conversationally driven, multi-message model, however, does require a new monetisation approach, which we’ll get to shortly.

Making RCS a reality
It’s clear that the opportunity, driven by the revolution in functionality will be a game-changer. But how will this become a reality?

The adoption of RCS will depend heavily on several factors that relate to robust interoperability: reach, coverage, security and pricing. Standardisation across the telecoms industry, in fact, will establish a foundation on which RCS can flourish, with interoperability being key to ensuring that access is not limited by network coverage. Networks will also need to work within a centralised model to avoid any drop in access or connectivity for users.

What’s more, quality of service will also be important. Customers will need to love it from day one and see the potential in order to accept this as a channel for the long term.

Interoperability crucial to monetisation
Finally, the billing aspect within the interoperability necessity will play a fundamental role in the monetisation of RCS. This aspect of the RCS opportunity is one which perhaps brings a fresh revenue model for operators, as well as a chance to tie them significantly closer to brands.

Operators can benefit from brands’ successes by creating a framework of partnership revenue sharing from those using RCS. This would essentially be a pay-per-click system, except for bookings, purchases, and uptake that brands have secured through using the operator platform. Mutual success would encourage development and two-way support.

Pricing models
Payment brings us back to the pricing model that will need to be established to handle the traffic without relying on legacy models for the consumer. Text messaging has become a product that most consumers think of as ‘free’. However, RCS will deliver a far more conversation-based approach to messaging, with the potential for numerous messages throughout a thread. Therefore, rather than pricing by message, the results of these conversations could be potentially priced on a sliding scale via metrics such as click-through rates, conversion rates, or peak times (times at which messages would most likely be opened) for sending messages.

On this front, operators can continue to become central to brands’ success. Simplified pricing models, can make it easier for brands to see good margins returned on their investment and measure success. Further, transparent models, such as billing by time, not per message, could fuel conversation and encourage discussion with those behind the brand (and its partners). The operator can give the brand the support and orientation expertise that its in-house team requires, and the models, functions, and brand services can follow.

Looking Ahead
RCS will soon unleash a dynamic phase of engagement between operators, brands and consumers through a text messaging channel with a 21st century makeover. However, there is still work to do to develop the technology foundation and partnership ecosystem for enabling this.

It’s up to operators to demonstrate the potential, lead the creation of the technology, and bring innovators on board accordingly. Once this is in motion, we can expect to see a new wave of brands jumping in with RCS. And with a solid revenue-sharing model in place, there will be mutual interest and powerful revenue incentive in making the most of this technology.

 

John Wick serves as Senior Vice President and General Manager, Global Product, and is responsible for the management and growth of Syniverse’s three primary product lines, which include networking, messaging, and transaction and clearing.

Google undermines US carrier RCS initiative by launching its own

Less than a month after the four US MNOs announced a joint RCS initiative for Android, Google has decided to launch its own.

Google was conspicuously absent from the announcement of the Cross Carrier Messaging Initiative by AT&T, Verizon, T-Mobile US and Sprint last month. Considering it was all about championing RCS on Android you have to assume there had been some dialogue between the operators and Google, but the omission of the latter from the press release indicated progress had been slow.

Now, having not done anything significant about RCS in the US for over a decade, Google has suddenly found the motivation to upgrade all SMS messaging on Android to RCS. In a brief blog post Sanaz Ahari, Product Management Director at Google, explained all the cool new things US Android users will now be able to do via the text function. It could almost have been a CCMI press release.

It’s hard to see this as anything other than a direct attempt to undermine the nascent CCMI project. The US operators saw Google’s RCS apathy as an opportunity to add some value themselves, so Google acted quickly to pull the rug out from under them. It could be that some of the features operators reckon they’re able to uniquely offer, such as keeping user data out of Google’s hands, might still give them an advantage, but this looks like a major setback for them.

Synchronoss unveiled as tech partner for latest US RCS effort

The Cross Carrier Messaging Initiative will use Synchronoss tech in its attempt to make RCS into a useful mainstream alternative to SMS and OTT messaging services.

RCS (Rich Communications Services) has been around for a while, but most people have had a tough time caring, content as they were with SMS for simple messaging and OTT services like WhatsApp for sending photos and that sort of thing. But the four big US operators reckon there’s life in the old dog yet and launched the CCMI a few weeks ago to make a proper go of it.

Synchronoss is a US company that specializes in providing operators with extra services to sweeten their offerings, one of which is messaging, so it’s not surprising to see it unveiled as a key partner in this initiative. With little apparent demand for a new flavor of messaging, the end product of this collaboration needs to offer something special if expects people to give it the benefit of the doubt.

“The cross-carrier messaging initiative has the potential to transition the wireless ecosystem to a new, innovative messaging service that will power new experiences – allowing U.S. wireless customers to manage their digital life and enabling efficient and convenient interactions with their favorite brands from a single application,” said Glenn Lurie, CEO of Synchronoss, before pausing for breath.

“The launch of this initiative signals the beginning of the era of advanced messaging in the U.S. that will begin to unite communication, services and entertainment in entirely new ways. Synchronoss, along with our partner WIT Software, has seen first-hand how powerful advanced messaging can be around the globe, and we believe there is tremendous potential for this in the U.S. on multiple fronts. This collaboration exemplifies how working together can enhance the entire mobile ecosystem.”

“By collaborating with Synchronoss, we’ll be able to successfully advance the messaging experience through RCS and take the next step to further the conversational commerce ecosystem,” said Doug Garland, GM of the CCMI joint venture. “With new RCS capabilities all four wireless carriers together will be able to create better overall mobile messaging customer experience.”

Synchronoss and WIT Software have some form in this area, having been involved in a similar RCS enterprise in Japan last year. If RCS is to belatedly take off it will probably be because it enables some new kind of communication between businesses and end users that all concerned consider valuable. It’s not immediately obvious what form that will take, so it will be interesting to see what they come up with.

US operators collaborate in one more effort to make people care about RCS

AT&T, Sprint, T-Mobile and Verizon have created the Cross Carrier Messaging Initiative to push the Rich Communications Service standard on Android.

RCS is championed by the GSMA, which has been banging on about it for over a decade. It’s positioned as the heir apparent to SMS, offering all sorts of ‘rich communications’ such as images, group chat. That all would have been pretty handy when it was first proposed, but since then there have been countless OTT messaging apps launched, such as WhatsApp, which seem to provide at least everything RCS does. So it’s hard to see what the point of RCS is in this day and age.

The US operators clearly disagree, however, hence this announcement. It’s easy to see why operators, and therefore their lobby group, would want to promote a messaging standard that they have greater control over. But what is less obvious is the incentives smartphone users would have to switch to it. Presumably most would reflect on their current messaging app portfolio and conclude that if it ain’t broke, don’t fix it.

“People love text messaging for a reason,” said David Christopher, GM of AT&T Mobility. “Texting is trusted, reliable and readily available – which is why we’re using it to build the foundation of a simple, immersive messaging experience. This service will power new and innovative ways for customers to engage with each other and their favourite brands.”

“The CCMI will bring a consistent, engaging experience that makes it easy for consumers and businesses to interact in an environment they can trust,” said Michel Combes, CEO of Sprint. “As we have seen in Asia, messaging is poised to become the next significant digital platform. CCMI will make it easy for consumers to navigate their lives from a smartphone.”

“At the Un-carrier, customers drive everything we do, and that’s no different here,” said John Legere, CEO of T-Mobile. “Efforts like CCMI help move the entire industry forward so we can give customers more of what they want and roll out new messaging capabilities that work the same across providers and even across countries.”

“At Verizon, our customers depend on reliable text messaging to easily connect them to the people they care about most,” said Ronan Dunne, CEO of Verizon Consumer Group. “Yet, we can deliver even more working together as an industry. CCMI will create the foundation for an innovative digital platform that not only connects consumers with friends and family, but also offers a seamless experience for consumers to connect with businesses in a compelling and trusted environment.”

Here are the things the CCMI says RCS brings to the table:

  • Drive a robust business-to-consumer messaging ecosystem and accelerate the adoption of Rich Communications Services (RCS)
  • Enable an enhanced experience to privately send individual or group chats across carriers with high quality pictures and videos
  • Provide consumers with the ability to chat with their favourite brands, order a rideshare, pay bills or schedule appointments, and more
  • Create a single seamless, interoperable RCS experience across carriers, both in the U.S. and globally

Of these the B2B angle seems the most compelling. There is still a surprisingly vibrant business around automated application-to-person (A2P) messaging, which typically operators use to communicate with their customers. The switch to RCS would bring a lot more options to that business. And then there’s the fact that you don’t need to know whether someone has an OTT app installed in order to send that message, although it should be noted that Apple shows no sign of supporting it.

But there’s no getting around the fact that RCS is essentially a direct competitor to OTT messaging which, thanks to the inability of operators to act with any kind of urgency, now has a massive head start in the marketplace. Perhaps if more of them belatedly get their acts together as the US operators have they can start to build some momentum, but we’re not holding our breath.

Verizon strengthens commercial messaging platform

After providing call filtering features for free, Verizon is going to update its commercial messaging platform to better protect customers.

Verizon announced that an updated commercial messaging platform will be launched within a month to improve the protection of users. “This new platform will improve spam protections while continuing to enable commercial providers of SMS text messages capacity at scale,” the carrier said in a statement.

The platform refers to Verizon’s “application to person” (A2P) messaging service that businesses can use to engage directly with consumers, e.g. for promotion, customer service, or consumer survey. Verizon did not disclose more details on how the improved security features will work other than that the “new platform uses a full 10-digit telephone number to help you recognize who is texting you”. However we can expect that this would be the first implementation of the RCS based messaging service that Verizon announced at the end of last year. So far, Verizon has been using its own proprietary A2P messaging technology.

Despite that OTT messaging services like WhtasApp and WeChat are gaining popularity whereas mobile operators are losing values through SMS, largely due to the rich features these OTT services can offer. However, the more features are integrated in these services the more they are open to abuse, e.g. spams and phishing attacks, which drives consumers to place more trust in SMS and RCS (coming in messaging format). RCS is a “clean channel”, not tarnished by the privacy scandals committed by Facebook and co, or the over monetisation by others, said the software company Mavenir at the recent Mobile World Congress. Research shared by Mavenir showed 97% of SMS / RCS are opened within 3 minutes.

Verizon’s new announcement on the improved security for messaging came shortly after the carrier made some features of its Call Filter app free to its postpaid users at the end of March. Used to cost $2.99 per month, now users can have Spam Detection, Spam Filter, and Report Numbers for free, while additional features will still come at a price. Verizon is playing catch-up to T-Mobile and others that have already provided free spam protection. It can also be read as responding to a call from Ajit Pai, the FCC Chairman, late year that demanded operators to “adopt a robust call authentication system to combat illegal caller ID spoofing and launch that system no later than next year [2019]”.

Verizon Call Filter free vs. paid

RCS is here to stay and doing well

RCS has been touted as a saviour when the SMS value has been destroyed by OTT messaging services, but without much success, but it may finally have find its moment.

Mavenir, the software company, presented on day 1 of MWC 2019, promoting its rich communication solutions offered by Rakutan. The key benefits, or the main use cases that RCS can differentiate from OTT messaging actually are less to do with taking consumers back to texting each other, or P2P messaging, but rather the communication between businesses and consumers, or A2P messaging.

This view is corroborated by Infobip, a Croatia-based messaging platform that provides aggregated OTT messaging services (e.g. WhatsApp, LINE, Viber, KakaoTalk, etc.) for their corporate clients, which the clients then can use for customer service and CRM. However, the company told Telecoms.com that its dominant business, which it has seen annual growth of between 30% and 40%, is SMS and RCS based services.

One of the use cases is helping businesses improve customer engagement. Despite that on feature comparison RCS is mostly playing catching up on OTT messaging services, SMS and RCS tramp OTTs in consumer trust. To quote Guilliaume Le Mener, Manevir’s SVP for Enterprise Business, RCS is a “clean channel”, not tarnished by the privacy scandals committed by Facebook and co, or the over monetisation by others. Research shared by Mavenir showed 97% of SMS / RCS are opened within 3 minutes.

In one case, Infobip was hired by Twitter to reengage the inactive users, after the social media giant failed the mission with its early efforts through email. Thanks to its rich features, RCS messages can enable users to explore the content directly. For those users on phones not compatible with RCS, brands can choose to fall back on SMS with a web line. The results were much more improved also owing largely to the capability of producing rich analytics to evaluate the campaign effectiveness and make quick decisions on any changes needed.

In addition to A2P messaging, RCS is also being used by brands to engage consumers in P2A, that is engaging directly with the brands through messaging. On the brand side the service can be handled by bots. This will then need to be supported by AI and analytics which will be another business opportunity for the RCS solution providers. With OTTs also actively moving into the P2A domains, again this is an area that operators need to have a stronghold for RCS before it is too late.

For Rakuten, RCS may be particularly meaningful, as, coming from an internet service and MVNO background, Rakuten has a big range of digital service tied to a user’s Rakuten ID. RCS will be a key instrument to maintain and strengthen customer engagement when it builds out its 5G network from ground up.

A bunch of telecoms predictions for 2019

It’s that time of year again and before we set about the food, booze and pressies with shameless abandon we decided to collate some predictions from the cognoscenti of our industry.

2019 will be the year of rhetoric – William Webb, Telecoms Consultant

A lot of talking, not much doing. Everyone will be talking about their 5G deployments but many will be trials, not many handsets will be available, and there will be many teething problems with initial deployments. With 5G taking up so much attention, the industry will not be looking at alternative business models, hetnet concepts, or pushing for mergers. Current trends will continue – more fibre will be laid, more wifi connectivity provided, data requirements will continue to grow. Oh, and academics will start to talk up 6G….

Fixed Wireless Access put the revenue back in 5GBengt Nordstrom, CEO of Northstream

Fixed Wireless Access (FWA) has evolved into a separate 5G use case, especially by Verizon in the US. Of all the suggested 5G use cases – including eMBB and mIoT – it is FWA that provides the most tangible revenue growth opportunity over the next five years, for both the US and in specific markets in Europe. Furthermore, operators can use their existing physical network assets and competencies for FWA. In 2019, FWA will emerge as a mainstream 5G revenue opportunity beyond the US, and particularly in Europe.

The 5G hype bubble will inevitably burst, revealing its true value – Jennifer Kyriakakis, VP of Marketing at Matrixx Software

As operators battle each other to out-hype their consumer 5G offerings, the breathless mania will surely run into the hard reality of the consumer marketplace. The roll-out of next-generation capabilities will be lengthier than consumers expected, device manufacturers will be slow to adopt the standards, and a whole host of other challenges to 5G enthusiasm will surely arise. While initially painful, this bursting of the hype bubble will provide the impetus necessary for operators to pivot away from today’s heavy focus on speed, coverage and price, and refocus their businesses on monetization opportunities for new and emerging technologies. By embracing innovation as a way to help pay for their substantial network investments in the near term, it will afford Telcos breathing room for the consumer ecosystem to catch-up and fully leverage the new capabilities that 5G will offer in the long run.

Smartphone market to revive in 2nd half with 5G volume – Wei Shi, Telecoms.com Intelligence Manager

The smartphone market has registered the first 4-quarter recession by the end of Q3 this year, and is likely to continue into the first half of the next. The market needs a stimulus for revival, and that should come from 5G. With the first commercial 5G chipset launch by Qualcomm, the enthusiastic smartphone makers, led by Samsung and the Chinese OEMs and, will ride on the wave of excitement to bring a strong line-up of 5G enabled products to the market in the second half of the year. This will provide another impetus for replacement in addition to the normal Galaxy-iPhone driven cycle. However most users who buy 5G phones will not be able to use 5G services overnight.

Telcos scale back efforts in content and media – Paolo Pescatore, Tech, Media and Telecoms Analyst

Cost of premium content rights continues to escalate. In part driven by new bidders such as the online giants. This will force telcos to rethink their current strategies towards investing in content. Some telcos like AT&T and Telefonica will continue to invest heavily. While others like BT will scale back their own ambitions and take a different approach in this landscape such as partnering more closely with providers like Amazon and Apple.

Amazon will acquire DAZN to create a global sports TV challenger – Ed Barton, Analyst at Ovum

Sport is the missing piece of the content puzzle for the tech giants – but not for much longer if Amazon continues to bid for distributors with existing rights deals, such as Fox’s regional sports networks in the US. By acquiring DAZN, Amazon would gain strong sports rights in key global markets including Germany and Japan. DAZN is committed to the sports market but might find the support and growth acceleration offered by Amazon – and its huge existing subscriber base – too alluring to resist.

We will finally get the message on RCS – Mary Clark, CMO of Synchronoss

2019 is actually going to be the year of carrier sponsored RCS – some 12 years or more since the technology was introduced. Between the launch of the operator led solution in Japan and the many other operators we are talking to about this around the world, I think by the end of 2019 we will see multiple launches of interoperable RCS messaging within countries and across countries, allowing for an improved customer experience as well as commerce.

Bringing people and things closer together with applications – Patrick Joggerst, CMO and EVP of Business Development for Ribbon Communications

2019 will be the breakout year for applications that combine people and things, communicating with each other, whether through voice activated commands (“Alexa, call Mum”), or messaging alerts (“A stranger is on your doorstep.”) The lines will blur and tremendous value will be created when companies design applications, connected on secure networks, that make it as easy to develop a relationship with your smart car, smart home, or smart campus as it is to develop a relationship with human beings. The impact will be substantial and meaningful, with applications that leverage sensors to help us age at home more safely, to get to and from work more conveniently, and to generally reduce the “friction” in life that can lead to exhaustion and despair. Look for major changes to the contact center industry, as virtual and human assistants help millions of people navigate this brave, new hyperconnected world, and look for value creation in securing communications throughout.

Rise of SIM-only contracts could be bad news for operators – Kevin Gillan, Europe MD at SquareTrade

Expect to see the slump in smartphone sales continue, and subscribers increasingly turn to SIM-only contracts in 2019. Operators will need to think carefully about alternative revenue sources to combat the unavoidable slump in contract sales. Additional services such as music, TV or device insurance that will retain customers and improve subscriber engagement, while driving new revenue, will be critical.

Operators fully embrace eSIM for devices and the IoT- Bengt Nordstrom, CEO of Northstream

After years of concern about the impact on their businesses, operators are coming to realise the considerable benefits of eSIM technology. These include simpler provisioning, reduced logistic costs and lower barriers for new use cases. Thanks to the rising number of eSIM use cases plus the launch of major handsets equipped with GSMA-based eSIMs, 2019 will be the year that operators in Europe and North America properly embrace eSIM for both handsets and IoT use cases.

The first sixth/seventh play bundle – Paolo Pescatore, Tech, Media and Telecoms Analyst

Most converged telcos already offer a portfolio of multiplay services including fixed line broadband and pay TV. These telcos include the likes of Deutsche Telekom, Comcast, Orange, and Telefonica. Expect these providers to launch the first sixth/seventh play bundle. This will consist of but not limited to other services such as banking, financial services, utility services and other connected services. Orange is likely to lead the race with its march into financial services.

Microsoft is to finish 2019 as the world’s most valuable company – Wei Shi, Telecoms.com Intelligence Manager

Microsoft has been delivering stellar performances in recent quarters, and has weathered the market gloom better than its main competitors. The strategy shift to becoming a platform and to focusing on cloud and gaming will continue to power its resurgence. Meanwhile, its main competitors on the top of the world’s most valuable company table are seeing their share prices being depressed for different reasons. Apple’s overreliance on iPhone makes it vulnerable when the market sniffs weakness in the shipment of its latest products; Amazon’s AWS is growing slower than Microsoft’s Azure; Alphabet is still a one-trick pony: advertising through Google, which continues to throw the company into troubles. As a matter of fact, Microsoft did briefly become the most valuable company in late November. Next time this crossover happens it may last longer.

Now that they’ve got to actually do it everyone gets bored of 5G and starts banging on about 6G – Scott Bicheno, Telecoms.com Editor

So 5G just ended up being about capacity, efficiency and industrial applications. How boring is that? Once the first couple of 5G conversational gambits at MWC fall flat, people will soon realise it’s much more fun to focus on more distant technology, about which they can make all sorts of utopian predictions without fear of being called out. There will be talk of a wireless neural network connecting everyone and everything to a hive mind overseen by benign artificial super intelligence. What they won’t say is that the ultimate aim of 6G will be to erase all traces of individuality in order to create a global AR/VR Borg that will combine Chinese social credit, American cultural puritanism and European imperiousness to free us all from the burdens of disappointment, inconvenience and choice. Happy New Year!

Mavenir places fortunes in hands of big boys and RCS

Mavenir is a business which has been growing steadily over the last few years, capitalizing on the virtualization buzz, though future prospects could ultimately be out of their control.

One aspect of the business model for Mavenir is simple. It is somewhat reliant on the process of decoupling hardware from software, the emergence of standardised NFVi, which in turn will allow operators to reduce spending on hardware, placing more emphasis on software, which is the dream situation when rolling out the 5G world. Mavenir does of course have some pretty handy technology outside this grand plan, but this seems to be the general thesis.

This trend of decoupling hardware from software is already underway, though admittedly progress has been lethargic to date due to resistance from today’s heavyweight vendors and some operators clinging to the strategies of yesteryear, but staggered steps forward are being made. This is where Mavenir can enter the fray with the knockout punch; because its business model is not associated with hardware, it can offer software products and services cheaper.

The overarching theory is sound. Companies like Huawei and Ericsson, despite becoming software players in their own right, will have to protect total revenues; the transition from an integrated hardware/software solution to purely software will drop revenues, therefore in the first instance prices in the pure-play software business will be inflated. These are companies which will not want to shock investors with a plummet in revenues, therefore the transition into the virtualized world with be ‘managed’. With the traditional heavyweights overcharging, Mavenir can swoop in and undercut because there are no legacy hardware business revenues to worry about.

This all sounds like a very effective business model, but a lot of it is dependent on factors which are outside the control of the company itself. As it stands, Mavenir is profitable, with revenues of roughly $500 million and plans to grow this number to more than $1 billion in four years, but this all depends on virtualization trends picking up pace, operators embracing the new dynamics of the digital economy, 5G deployments to be as optimistic as currently being preached, and of course the assumption they can undercut the bigger boys on price.

But this is only one part of the Mavenir story, the other is focused on RCS, and looks incredibly promising. To date, RCS has been somewhat of a dirty word for the operators, with the webscale player plundering the bounties. But the tide is turning. Recognising the potential for RCS when delivering new services in messaging and multi-media content, it is embraced by operators in North America, with trends slowly beginning to sail across the Atlantic to Europe.

In the RCS world, Mavenir has been one of the first to get to the party. The team has already developed cloud-based applications, allowing easier integration for the operators, but more importantly, these applications aren’t just focused on the consumer services. This is where the webscale players have been reaping the benefits, but with an eye on the enterprise services market, Mavenir has the potential to make solid progress.

Another very important factor is the procurement process. The team already count 240 companies around the world as customers, and many of these customers are fickle beasts. They don’t like the unknown and fear change, the fact Mavenir is already a known entity is a positive. But known under what name…

This has been the plague of the business for the last few years. It was known as one name, then another brand, before adopting a new logo. Consistency has not be a major play, which will certainly make some nervous. A big question is whether Mavenir has permanently solved its identity crisis.

The theory about being able to undercut competitors is believable, but until competitors start talking about pricing models, we’ll never actually know. The assumption here is competitors will be defensive of hardware revenues, not aggressive on the software side. However, trends in the VoLTE world, where Mavenir is arguably knocking the likes of Nokia and Ericsson off the pedestal, and RCS are looking promising for the business.

A large component of Mavenir’ success seems to be heavily reliant on the deviousness of today’s mega-vendors and whether they will abuse relationships with customers, as well as adoption trends with are largely uncontrollable. A lot of future success seems to be dependent on moving cogs functioning smoothly and in a timely manner, but the team is confident… some might even say cocky.

You may be using RCS without even knowing

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Guillaume Le Mener, GM of Enterprise Solutions at Mavenir argues that there may still be a lot more to RCS than you think.

We have taken it for granted. When we use our smartphone, it is just another icon on the screen but, believe it or not, SMS is more than 35 years old. It was first proposed for the Global System for Mobile Communications (GSM) in 1982, although its most popular time was the late 90s and early 2000s, when entire generations mastered the art of compressing ideas, passions and conversations into small snippets using the most ingenious abbreviations in order to fit within the 160 characters limit. And its popularity generated a significant amount of revenue for mobile network operators (MNO) worldwide.

Then the mobile internet exploded, data plans became ubiquitous and over-the-top (OTT) applications usurped the throne that SMS had held for more than two decades and the MNO’s person-to-person (P2P) messaging revenue was severely diminished. However, SMS continued to live on as the platform of choice for application-to-person (A2P) or business-to-consumer (B2C) interactions. You have been using SMS to receive your two-factor authentication codes, confirmations about flight reservations, links to download mobile boarding passes, discount codes and coupons, or alerts every time your credit card was not present for a transaction. Mobile messaging is a part of our lives, even though we don’t pay much attention to it anymore: we have taken it for granted.

But mobile messaging has been going through a complete transformation. Originally embraced by the GSM Association (GSMA) in 2008, a new messaging protocol was developed with the goal of succeeding SMS as the mobile messaging application of choice: Rich Communication Services (RCS).

RCS was initially an industry response to the threat of the OTT messaging applications that were eroding their P2P SMS revenue and so it focused on introducing the features that made these applications popular—conversations, images, video, audio, typing notifications, read receipts—while ensuring the global reach that SMS provided.

For many years, RCS struggled to grab interest from MNOs and handset manufacturers because the business case wasn’t favorable. The OTT applications had taken over the P2P business almost completely—except on the markets where all-you-can-eat SMS plans were already in place—and it was uncertain that RCS could retake the throne. But recently, RCS introduced the Universal Profile—which enhances its capabilities by laying out the common functionality that needs to be supported by every player—and there has been a sudden interest to use RCS for A2P applications, a scenario that provides a profitable business case. Moreover, there is a push by mobile handset industry giants such as Google and Samsung. All these developments have infused RCS with new life.

A major improvement in A2P messages

The RCS open platform provides developers with everything they require to implement and deploy advanced communication applications. The message richness, combined with its universal reach, make it a very attractive delivery vehicle for brands, and offers new revenue opportunities for MNOs.

RCS solutions have been in mobile networks for several years provide major improvements in A2P scenarios such as:

  • Sender identified by name, not a short-code or MSISDN
  • Integration of graphics and QR codes
  • Hot-buttons to websites replacing links
  • Executable code embedded in the message, enabling customers to take action immediately without going to a website
  • Spam protection and privacy control measures to maintain customer trust

And by combining it with solutions like messaging-as-a-platform (MaaP), RCS provides the basis for up-selling A2P SMS now, and a chatbot platform in the near future, as well as P2P message monetization and data sponsoring opportunities.

With Google pre-installing the new Android Messages app on Android 8.0 Oreo and Samsung adding their own RCS capable messaging application on their smartphones, almost all the Android devices launched in 2018 will be RCS compatible and most major networks have deployed or are deploying Universal Profile compliant RCS solutions in the market — 55 operators and 11 OEMs globally as of January 2018, according to GSMA, with a forecast of 200 operators by Q1 2019.

What about the iPhone?

Even though the iPhone represents a smaller market share—around 20% globally according to Statista—Apple is the second most popular smartphone vendor after Samsung and their flagship device is still considered one of the trendsetters in the industry. Therefore, it is only natural that key industry decision makers look at their positioning around RCS.

iOS 11, the latest version of the iPhone operating system, does not support RCS capabilities in their Messages application. Apple did not wait for RCS to become popular and invested in their own multimedia messaging solution that was named iMessage. The Messages application on the device automatically detects if a contact has the iMessage service and utilizes it in the conversation—the user knows because the messages are blue. If the destination does not support iMessage, the application falls back to utilize MMS or SMS, presenting the user with a green messaging interface.

But this doesn’t mean that RCS cannot be used on Apple devices. It is still possible to provide a downloadable application that allows users to benefit from RCS’ message richness and universal reach. In some cases, other iOS applications may utilize RCS as a messaging mechanism within a specific user experience. For example, amobile-native unified communications and collaboration (mUCC) solution uses RCS in the mobile network as the instant messaging delivery mechanism. RCS can deliver everything a unified communications solution needs—such as typing and delivery notifications, message store and forward, conversation synchronization, or image, video and audio assets— and more—for example, rich cards and carousels—with the ability to deliver messages to any phone number in the planet by downgrading to an MMS or SMS message when needed, just like iMessage does.

And although Apple does not usually advertise their roadmap, past experiences show that they normally adopt technologies once they are mature enough—such has been the case with WebRTC—which makes it likely that iOS will support RCS in the near future.

Conclusion

RCS has already permeated into the networks and is about to take the center stage in the mobile messaging theater.

Unbeknownst to most of the people, MNOs and device manufacturers have been implementing RCS within their solutions. The GSMA claims there were 159 million monthly active users of RCS globally, as of January 2018, forecasting 350 million by the end of 2018, representing a $74 billion market by 2021.

In the US, for example, T-Mobile is already claiming that 30 million customers are sending over 250 million RCS messages every day across their network.

With the closure of the Universal Profile 2.0 and the strong push by Android, in the next few months users will begin to see RCS in every aspect of their daily lives. Although they will not know it as RCS, for them it will be just messaging.

 

Meet Mavenir to discuss RCS implementation at 5G North America 2018, May 14-16, in Austin, Texas.