There was one announcement at the Mobile World Congress (MWC), that stood out from others: Global Operators, Google and GSMA will adopt RCS (Rich Communication Services), 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: Group chat, HD voice and video, file sharing etc. Thanks to the acquisition of RCS software and infrastructure developer Jibe in September 2015, Google would integrate RCS functionality in the Android mobile OS. Although RCS has been around since 2008, there have been very limited commercial RCS deployments to date.
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.
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– Making RCS the next generation of mobile communication service requires mobile operators to not only support RCS within their own networks, but also on their interconnections with other mobile operators across the globe. These interconnections can be established directly between mobile operators, or through interconnection hubs provided by wholesale telecommunications providers. Historically, mobile operators have preferred to build direct interconnections with other mobile operators, and only using these hubs for a limited amount of the business. This means that they would have the huge task of upgrading hundreds of these interconnections to support RCS. This work would also 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.
- 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, an SMS per message. For RCS services, there is not yet such a universal rule. Operators can agree 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? 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 telecoms giants, they might just do it.
Read the full article on LightReading
Dries holds a masters degree in economics from the University of Leuven and a postgraduate masters degree in ICT from the University of Namur.
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