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MetroPCS Puts Comms Startups on Notice

Sarah Thomas
8/21/2013

Solyman Ashrafi has a message for startups building communications services: "Your days are numbered."

It's fair to say the mobile industry has been more than a little slow moving on building out rich communications services (RCS), but once they go mainstream, Ashrafi, the vice president of product development at MetroPCS Inc. (NYSE: PCS), now part of T-Mobile US Inc. , predicts the Silicon Valley app upstarts will evaporate.

Once RCS is established, "You won't see these startups coming up with these communications solutions because they won't be needed," he predicted in a recent presentation.

RCS is a GSM Association (GSMA) initiative, marketed as Joyn, to build ubiquitous mobile communications services based on the IP Multimedia Subsystem (IMS) core network. More than just one standard, it has the ability to mash up a number of standards to, for example, add video a job recruitment app or integrate presence into chat. The key to all of this is that it works across networks, regardless of device, operating system, or service provider.

More than 70 operators have committed to it, with the most traction coming from Europe, but there hasn't been much significant momentum to date. MetroPCS, also the pioneer of LTE and voice-over LTE (VoLTE), introduced a RCS-powered communication service, Jibe, but, ironically, it's been limited to its own network. Its future is still somewhat unclear now that the carrier has been acquired by T-Mobile. (See MetroPCS Intros Video Chat with RCS.)

MetroPCS originally said it would roll out with other carriers later this year, enabling WiFi calling, video calling, enhanced instant messaging, and simplified content sharing across networks, but a spokesman now says that, "We don’t have any updates to share about Jibe right now and are evaluating future plans for RCS services."

The slow-moving nature of the market is why so many startups have emerged in the first place. The consumer expectation is that they can connect with anyone they wish via a group chat, video call, or other medium on any device and from any location. Startups like WhatsApp, Viber, and Line were formed to fill these gaps.

Some of these OTT apps are really good, too, so why does Ashfari think operators can do it better? He says it comes down to quality. OTTs don’t have access to lower-layer protocols to achieve quality of service. Their apps cannot offer a seamless experience, because that requires integration from the chipset, to the OS, to the apps, directly in the handset.

When (or if) RCS makes its way to more handsets, it will be pervasive. At least that's what MetroPCS is working toward. It doesn't plan to leave the startups behind, or rather not the ones that are really good. Ashfari said it will team up with them to improve their quality and leverage their app ecosystems in the process.

"There are hundreds of messaging and video apps, but none of them talk to each other," he said. "Users are confused on which ones are better. A lot of these companies in Silicon Valley will evaporate. The ones that will remain are the ones we will collaborate with to make sure our RCS connects to the top 10 RCS OTTs."

— Sarah Reedy, Senior Editor, Light Reading

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varkonyib
varkonyib
8/24/2013 | 3:45:06 PM
The opportunity window is still open for telcos
I could do voice/video over IP already 20 years ago. Still, as of today, the majority of calls are done on mobile phones using GSM/WCDMA.

Why?

It is not that expensive and very convenient. Just one click away.

Laziness rules.. Most people even do not change to a better tariff...

RCS is based on standards, like GSM, so it could be more or less interoperable and available everywhere.

Same with good old SMTP email, SMS or MMS.

The OTT space will consolidate as RCS will grow. They will live together some time. With OTT usually you have no customer relations and support, yet. So those who need that will stick to the classical telcos, or the OTT will become a telco. A convergence will happen, in 2 decades they would be no strict separation of telco and OTT in this domain. The RCS style service will become commodity, so efficiency of scale will take over the small OTTs.

QoS is not a real issue, when you have overprovisioned network compared to the individual needs. However, security might be more important for some.

Username/password is so outdated and easy to break. RCS could use USIM/ISIM in the future. This is the way to go. Also for mWallet/NFC.

This the reason why OTTs push so hard for TPM or UICC like solutions. They know that currently they have a huge disadvantage. No secure storage.

Sooner or later governments will also recognize that current style OTTs do not fit. So they will regulate them and push them to keep the rules. Convergence again. Just remember about BlackBerry pushed to implement lawful intercept. Or think about the DNS debates. Why should the USA control something over the other countries? Cannot be sustained. UNO and its organizations, such as ITU can make long term compromises...

Can you find the wild west today on the prairees? No. It has gone. The same will happen here. History repeats itself. Development is happening in a spiral way...

 

 
pdonegan67
pdonegan67
8/22/2013 | 10:43:02 AM
On Message
Yer man's certainly on-message so far as his new parent company is concerned. Though whether his predictions are "rich" or alternatively "a bit rich" is more open to debate. Predicting the demise of the OTT model certainly belongs in the latter category in my book.
corwin0
corwin0
8/22/2013 | 2:21:08 AM
Wait, it's not 1 April...
I've been hearing the promises of RCS (both on the vendor and operator side) for years.  It's not here yet, it will likely never really make it - the OTT horse has well and truely left the barn. 

Some issues with RCS, even if it attempts to deliver:

1) Inter-network - no one really talks about it - so, all my social network(s) need to be on the same carrier - right...

2) What about other (non Mobile) platforms?

Ubiquity rules here - and RCS is not, and never will be, ubiquitous.  

As far as the actual statement from MetroPCS, it is either an inflamamatory statement to get press coverage and people talking about it (in which case, it succeded), or the folks at MetroPCS live in a reality distortion zone and/or take interesting mind altering substances - wonder if they would share...
@jopocop
@jopocop
8/22/2013 | 2:10:34 AM
Re: Bewildering
Definitely concur with your observations.  There are so many cooks (operators) in the kitchen, it is hard to know what the final dish is going to look like.  What I know is recent articles such as:

 

Joyn Struggles As Operators Partner With OTT Providers

GSMA-backed standard joyn is struggling to drive significant operator support, limited by its complexity and slow speed to market, according to joint research by mobilesquared and tyntec.  more

Related Tags: nsnhuaweigsm-rTurkey


Mobile Operators Frustrated with RCS Delays

Even though Mobile Operators are engaged with RCS and committed to launching the services, the vast majority of Mobile Operators are frustrated with the delays, according to a Yankee Group survey that was commissioned by Openmind.  more

 

Seems to me that MetroPCS has enough on its plate now to contend with the hard nosed competition ongoing in the mature USA markets.  That is job number one, hanging on to customers.  
Dean Bubley
Dean Bubley
8/21/2013 | 10:09:40 PM
Bewildering
I've seen & heard quite a lot of nonsense about RCS over the past 5 years, but the comments expressed by MetroPCS in this article literally have me shaking my head in disbelief.

Which, coincidentally, was what I also did when I heard MetroPCS' radio ads a few months ago, asserting that RCS was "the social sharing app taking Europe by storm".

If this is their idea of a storm, then their meteorology is almost as poor as their understanding of consumer communications applications.

The argument for ubiquity is completely flawed. We will likely see no more ubiquitous apps, beyond today's telephony, SMS/MMS and email. Facebook is probably the closest with 1bn-odd customers - while RCS/joyn has (at most) 5m users, most of which are probably not active. Ubiquity is *earned*, not *assumed*, and thus far RCS certainly has done nothing to suggest it is going to earn users' acceptance, let alone loyalty or payment.

There are too many problems to detail here, but one particular is that it is "designed by committee" and iterates very slowly. If you look at what triggers viral uptake of the new apps, it's small unique features like stickers (LINE), presence that is actually useful (Whatsapp), photo filters (Instagram) and so on. There is no sign that the GSMA-led bureacracy, or telcos' product teams hobbled by embedded clients & rigid IMS vendor licencing, are able to compete on the same ground.

In any case, messaging is rapidly becoming a feature of other apps, not a service in its own right. And no, it's unlikely that an RCS API will be the preferred mechanism for most use-cases either.

Overall, I'd willingly make MetroPCS' Ashrafi a personal bet that his predictions are wrong. I'm easy to find if he wants to take me up on the offer - I'm all over Twitter, LinkedIn, Skype, Quora & even Whatsapp.

 

Dean Bubley

Disruptive Analysis

@disruptivedean
Sarah Thomas
Sarah Thomas
8/21/2013 | 6:17:34 PM
Re: Game on.
Well, net neutrality laws, I hope. That would be very bad press if they did that. They can improve the quality of their own services, but not downgrade competitors.  
zingaro
zingaro
8/21/2013 | 5:59:27 PM
Re: Game on.
What is to stop the carrier from inspecting web traffic, identifying these types of applications, and giving them very low CoS/QoS?  The applications will basically stop working at that point.
GarrettChoi
GarrettChoi
8/21/2013 | 5:22:02 PM
Game on.
Speaking in general for all of us Entrepreneurs who run the start-ups that the "big guys" threaten to "evaporate":  

Bring it.
MordyK
MordyK
8/21/2013 | 3:01:25 PM
Re: OTT ain't on notice yet
Kevin, There's also the question of cost. OTT apps are generally free or in teh case of Whatsapp only cost 99 cents a year, while carrier charge big money per text. so if carriers think they can supplant their text revenue by implementing RCS as a replacement revenue driver they are badly mistaken. I think this realization might be the cause behind the lack of enthusiasm for RCS by the carrier community.
MordyK
MordyK
8/21/2013 | 2:58:15 PM
Re: Preferred Chat System
That's the one strength carrier's always have to build on. All new services that carrier's try to offer IMHO need to ask how does the universal phone number give me an overwhelming advantage over any OTT competitor that can move faster.
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