RCS For Mobile Operators: Increasing Revenue through Exploiting new Technologies

Written by
GMS

The possibility and potential of Rich Communication Services (RCS) have been talked about for some time. RCS promises to provide rich text and image content, increased subscriber and network security, and improved user/subscriber interactivity – much like third-party and OTT apps (such as bespoke verification apps, WhatsApp, etc.) – delivered via the same native channels as SMS text. We have previously looked at these and other features here, where we also discuss the possibilities RCS offers enterprise customers.

In this article, we will look at some of the challenges and opportunities involved in RCS, and how GMS (the longest-established and most-connected messaging hub for the CIS region for all messaging – P2P, P2A, and A2P) is preparing for the future of RCS services. Today GMS is a major global supplier of messaging services to both enterprises and operators, with over 60 mobile operators in the CIS region alone directly connected to its messaging hub. This, along with a proven track record of helping operators improve their revenues and margins from messaging traffic, means that GMS has a responsibility to the mobile community to deliver imaginative and appropriate solutions in response to technological changes such as RCS.

Opportunity
Although RCS has been a subject of discussion for many years, it is only recently that it has achieved the potential to have a meaningful impact on the messaging ecosystem and of delivering real value to enterprises, operators and network subscribers. The emerging value of RCS is partly attributable to the presently uncomfortable co-existence between mobile network operators and an increasing abundance of OTT providers. Since these OTT players are challenging for the growing market in business messaging, operators need to show that their existing messaging services have a more feature-rich future. RCS offers an opportunity for operators to improve their traffic monetization, by re-securing A2P traffic lost to OTT solutions.

Not unsurprisingly, enterprise engagement with RCS has been uneven. For example, enterprises in Great Britain or the CIS region have not engaged with RCS at the same level as other markets such as the United States or Korea. This is partly because operators in those places have been more advanced with their own work with RCS. One thing some of the US operators have done (as part of their service to their enterprise customers) has been to connect to the Google Jibe RCS hub. GMS is also connecting to the Jibe hub through the Google Early Access programme. In this way, GMS can provide its enterprise customers with the opportunity to participate in the early roll-out of commercial RCS services and give them a better understanding of how those services are to be delivered.

The move towards RCS
However, the most critical aspect of the evolution of RCS, in any part of the world, will be the attitude of the mobile network operators. It is clear that most operators are cautiously watching and assessing what they might need to do (and when they might need to do it). For example, it seems that the operators in Poland have reached an agreement that the Jibe solution is not for them but they have not yet agreed on if and how they should exploit RCS opportunities.

The issues determining the next steps to be taken by operators will be the same issues that are currently under discussion within the wider messaging ecosystem – increasing costs and stagnating revenues. The mobile industry generally recognizes the importance and increasing value of the A2P messaging business as one remedy to this, and mobile networks are in an existential struggle with OTT providers for this business. RCS may provide the tools necessary to come out on top, but how do operators and enterprises devise business models that secure revenue growth?

As RCS becomes a commercial reality we will see individual use cases becoming more meaningful, when previously they were really just a “proof of concept”. In some regions such as the UK, there are currently very few of these use cases with the same examples (or single example) being referred to for at least the last two years. There is a view that RCS will advance because enterprises no longer want to use apps to communicate with customers as they are expensive to produce and time-consuming to maintain. This theory will be tested as we see more real-world use cases emerge into actual deployment – should it prove correct, the net result would be networks joining their “first-mover” competitors by offering RCS channels, as the possibilities for monetization become more apparent.

Addressing the cost of RCS development
We should be cautious about claiming almost magical powers for RCS to address the needs of the A2P messaging sector. When it comes to RCS, operators are faced with some hard decisions. Development, after all, costs money, and appropriate commercial models are still uncertain. Fortunately, serious work is being produced, especially by the GSMA, on the very important questions of proper use cases and effective business models mentioned above.

Nevertheless, in actually investing in RCS, operators will have to confront the challenges currently surrounding the business model. It is not clear how much, if anything, enterprises are prepared to pay for RCS as a premium over A2P SMS. Nor is it very likely that subscribers will want to pay extra to receive an RCS. So, the cost burden may fall on the operators, who are in a major fight with the OTT providers for the enterprises’ messaging business, and as such they may have to absorb development costs in order to win a proper share of this traffic.

The importance of RCS Hubs
Of course, when it comes to international and inter-operator messaging, hubs form a critical part of today’s worldwide messaging ecosystem, and this is no less true of RCS. In this respect, at least, there are some pre-existing options to smooth infrastructure development. We have already mentioned Google’s Jibe hub, as one way in which US operators have begun to deploy RCS for their enterprise customers. This RCS hub is central to Google’s plans to take a large share of the A2P messaging business. It is, however, not the only option.

There are two main types of RCS hub that are offered. One of them is to host RCS infrastructure on behalf of operators (which is how Jibe works). The second type is more like SMS and MMS hubbing of today – relaying RCS messages exchanged between mobile operators.

Building an international RCS infrastructure
GMS’ position as a trusted global messaging provider means that there is an expectation that it should have something to offer its clients. To meet this responsibility, GMS is continuously engaging with existing and potential technology partners so that its delivery of solutions is effective.

GMS is capable of offering both RCS hub variants, with an RCS application server connected to the GMS worldwide hubbing platform on behalf of mobile operators, or by simple extension of that platform’s capability to carry RCS traffic. System design and technology specifications are in place, and GMS just needs to establish with its mobile operator customers which approach is most appropriate for their needs.

GMS is monitoring the development of RCS messaging so that it can help operators take advantage of its potential to maintain their role in messaging (and build revenue growth from messaging) at a time when some operators believe messaging is becoming a “legacy service.” At the same time, GMS is preparing to help its large client base of enterprises use the benefits of RCS to build better and more valuable communication with their existing and future customers.

Contact a GMS expert today and find out how we can help accelerate your business.

Comments

No comments yet... be the first to comment!

Leave a comment

*

Subscribe to our newsletter

Stay up to date with the latest messaging,
marketing and customer service tips and news