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Pulling off RCS will be a huge challenge for mobile operators, but they may be able to do it with some help from Google.
4 Min Read
Last week at the Mobile World Congress (MWC), there was one announcement that stood out from others: Global operators, Google and the GSMA will adopt Rich Communication Services (RCS), augmenting mobile communication as we know it.
With RCS, your mobile phone would natively provide the features that are currently only offered by OTT applications such as Skype, Whatsapp and Facebook messenger. The kind of features we're talking about are group chat, HD voice and video, file sharing and an enhanced address book, enriched with presence information.
Thanks to the acquisition of RCS software and infrastructure developer Jibe in September 2015, Google would integrate RCS functionality in the Android mobile operating system. Although RCS has been around since 2008, there have been very limited commercial RCS deployments to date, notwithstanding the limited trials that several operators have done over the last couple of years.
What's at stake?
For mobile operators, rolling out RCS services would enable them to win back market share and associated revenues in communication services that they've previously lost to OTT providers. While mobile operators only provide voice calling and SMS messaging, OTTs offer an extensive set of features at a fraction of the cost. For Google, collaborating with mobile operators on RCS would result in a bigger push on Android phones, rather than iPhones, which would surely be a nasty shock for Apple. In addition, Google's take on OTT communication services (Google Talk, Hangouts) has been substantially less successful than that of Apple (Facetime) or Facebook (Messenger and Whatsapp).
Will they be able to pull it off?
Making RCS a success is a gigantic project, with a lot of complexity.
These are the potential showstoppers:
Interoperability: It's not too difficult to make RCS work within the network of a mobile operator; many operators have already trialed RCS services with their subscribers. However, making RCS the next generation of mobile communication service by replacing SMS and regular voice calling, requires mobile operators to not only support RCS within their own networks, but also on their interconnections with other mobile operators, both nationally and internationally. These interconnections can be established directly between mobile operators, or through interconnection hubs provided by the so-called "wholesale telecommunications providers."
Mobile operators have historically had a preference for building direct interconnections with other mobile operators, and only using these hubs for a limited amount of the business. This means that they would need to upgrade hundreds of these interconnections to support RCS, which is an enormous task. In addition, this work would have to be done over a limited period of time while maintaining interoperability with the existing voice and SMS services. A long transition time would kill the user experience and prevent the network effect from playing its role.
An alternative is to migrate bilateral interconnections to hubs; wholesale telecommunication providers have had their RCS-compatible interconnection services ready for a while, thanks to industry working groups such as i3forum.org.
Business model: The simplicity of the business model has been a substantial factor in the extension of the telephone network to over 6 billion endpoints. All over the world, a voice call is charged per minute and an SMS per message. For RCS services, there is not yet such a universal rule. Operators can agree on the business model on a bilateral basis. However, while this gives more liberty in the commercial negotiation, it complicates the building of a global RCS network.
ROI: Switching from voice and SMS to RCS is a huge and costly task. The question is: How much money can operators make from this, given the fact that, discounting the data consumption, many (residential) OTT services are free of charge? And does this justify the huge project cost? If half of the operators in the world are hesitant, won't this kill the network effect needed to make RCS a global success?
It's obvious that pulling off RCS will be a huge challenge but considering that the driving force behind this initiative is a group of Internet and telecom giants, they might just do it. What is sure is that this will be a very interesting initiative to keep track of in the following months and years.
— Dries Plasman, VP of Product Management, Voxbone SA
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