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EVENTS 09/12/2020

What happens to operators who have deployed RCS already and sunk millions into it?

 

Us humans are creatures of habit. Sure a few of us like pushing the envelope, always trying out news things at the bleeding edge, but the huge majority of us enjoy their comforts, what’s already known and proven. But then along comes a game changer to really shift things up a gear, something that quite literally grabs the attention of billions of people in a smooth, comfortable manner. Take SMS, the humble text message. 

Born in 1992, SMS grew rather by accident grew to be a hugely successful two-way means of communication that captured the trust of a generation SMS was originally conceived as a one-way channel for mobile operators to update their subscribers about network activities such as planned system downtime but several years later, started to take hold as a two-way P2P (person-to-person) means of communication. About 20 years ago marketeers got with the idea of using it for one-way A2P (application-to-person, B2C and B2B in plain language) marketing uses and the rest is history. 

 

You could be forgiven for thinking RCS was the new kid on the block but the concepts of it has been around for a decade.

 

A2P SMS is easily understood and with 98% of successfully delivered messages actually being read, it just works. Organisations of all types, shapes and sizes globally use it heavily for delivering marketing, transactional and informative content to their customers and indeed potential customers. Transaction volumes are increasing year-on-year and as this strange year of 2020 has unfolded, ever more use cases for it have come to the fore.

SMS undoubtedly sits astride the A2P mobile engagement throne but there have been pretenders to it over the years. SMS is all a bit dull, flat and grey. Being visual creatures, introducing a (particularly attractive) visual component to something really grabs our attention. After getting off to a cautious start in 2001, Multimedia Messaging Service (MMS) built up a head of steam and it wasn’t long before people were talking about the total demise of SMS in its favour. Melding the pull of pictures with the world of text messaging (MMS) should have created something unassailable but a host of technical limitations and commercial challenges meant this was not to be. SMS lived to see another day. 

The P2P side of communications has not been as forgiving to SMS though. Chat apps like WhatsApp, WeChat, Viber and Telegram have decimated Voice and P2P SMS revenues for mobile operators globally and the internet giants use operator’s network infrastructure to push through valuable advertising to people without paying operators a cent. 

The new kid on the block always seem to draw attention and consumers’ eyes. With a lot of products, it’s a case of form over function. Few draw the two elements together successfully in a long-term, economically sustainable way. 

If you’ve been to any mobile related events around the world in the past couple of years, you couldn’t have avoided heaving about Rich Communication Services (RCS), unofficially known as ‘SMS 2.0’.  In a nutshell, RCS is a set of communications standards for SMS, MMS and calling that sets out to make text messages look and feel more like dedicated messaging apps such as WhatsApp and WeChat. 

RCS brings with it a truly dynamic environment. Colour, video, chat, it’s all there. Many people have been of the opinion that RCS would replace SMS as the dominant force within several years but this has not happened. And we here at Vox are and doubtful if this will truly ever happen.

 

Google recently threw a further curveball at operators who have already deployed RCS by announcing they are essentially going all in with their own Android Messages.

 

You could be forgiven for thinking RCS was the new kid on the block but the concepts of it has been around for a decade. Indeed, it has been implemented in some networks since 2013 but we’re still to meet any who have said it has been a commercial success. 

Sitting behind the major efforts to push RCS to operators has been Google who have been very invested in it. Unlike SMS though, getting RCS to actually work is rather complicated. Even with might of Google sitting behind it. 

First of all, operators need to invest in an expensive RCS solution. To use RCS, subscribers need smartphones, but not just any smartphones. Smartphones have to be of a particular type, have particular software and a specific app downloaded, if not already preloaded. To really complicate things, Apple does not subscribe to RCS at all. It’s an Android (Google) only solution, the fallback for everything being SMS. With Apple having captured approximately 20% of the smartphone market globally, a large chunk of smartphone users has no access to RCS, something which does not look like changing anytime soon. And let’s not get started on the commercial model of RCS. 

There is no agreed commercial model at all across the RCS ecosystem so how do operators have any chance of implementing it properly in their billing system? And the pricing out there makes RCS far more expensive than A2P SMS. So why would an enterprise already using SMS to great effect to deliver quick transactional and informative messages make that switch if far more expensive? RCS is definitely not the holy grail new source of revenue and margin some have made it out to be. It is rather fast becoming something of a costly minefield for operators. 

Google recently threw a further curveball at operators who have already deployed RCS by announcing they are essentially going all in with their own Android Messages. So, what happens to operators who have deployed RCS already and sunk millions into it? And so back to the world of A2P SMS we go. 

A2P SMS is here and now. Controlled and managed properly, it is super high margin for operators and a growing area. Ignore the smoke, the mirrors and the false prophets and don’t overlook what it right in front of you today. It may not be funky but it gets the job done like nothing else out there. And Vox is here to ensure that operators globally can rapidly take their rightful share of this growing A2P pie by providing a complete monetisation, anti-spam and anti-fraud solution. All potentially with no upfront costs to carriers as well. 

Vox has shown its creativity for many years and with an entrepreneurial feel and real understanding of what operators need, our comfortable size makes us an approachable, great company for carriers to partner with. What have you got to lose? 

 

 

 

 

Written by Ehsan Ahmadi – CEO of VOX Group