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Where next for messaging?

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SMS is ubiquitous and perfect for B2C engagement. But with 2G networks being decommissioned, where is messaging going – and what is waiting in the wings to replace it? Paul Skeldon reports

Messaging was one of the least expected developments of mobile comms when mobile phones took off in the 1990s. SMS was added to give phone engineers a means of communicating with each other that didn’t clog up the phone network. However, the neatness of trying to converse asynchronously via words in 160 characters tapped into a demand that no one knew was there.

I remember it well: why go through the (expensive) rigmarole of calling someone to say that you were running late, when you could text them that you were “10 L8”?

Today this messaging model to mobiles has morphed into a multi-billion dollar global business, so it is no surprise that many are trying to develop the next messaging standard that can reach like SMS, but deliver even more.

So where is messaging going?

“I think SMS is important to enterprises as it is on everyone’s device and you can talk to people – and people like it and enterprises know that. It’s a great way to deliver a notification,” says Jason Bryan, CEO, ROCCO. But that is going to change.

“Many MNOs are starting to shut down their old 2G networks and eventually 3G will be closed too,” says Bryan “What does this mean for SMS? Well, you can still run it even without 2G but then this old model of SMS won’t exist so how will they continue to supply that? What happens to m2m, IOT and voice traffic as well? These are all things that people are asking.”

In the midst of SMS’s rise – and indeed now spurred by the near-future decline of the networks that make it work – many other OTT messaging services have risen up. Facebook Messenger and Whatsapp are front runners, while in China WeChat is huge. But none of these can touch SMS’s ubiquity and utility. Also, for business to use them to connect with consumers, the consumer needs to opt in to allow them to do it: this makes them less ‘reach-y’ than SMS.

HEAR JASON BRYAN FROM ROCCO TALK ABOUT THE FUTURE OF MESSAGING IN THIS EXCLUSIVE INTERVIEW VIDEO

RCS is a-coming

Enter Rich Communications Service (RCS). RCS is Google’s attempt at rebooting SMS to make it rich and interactive and to offer the ability to take much of what corporates want from SMS into the truly interactive, 5G world.

However, it is limited – for now – to Android devices and, for that reason, lacks the reach of SMS. That said, there is a lot of interest in RCS as both businesses and MNOs explore where it will fit in the messaging paradigm.

“RCS is interesting,” says Bryan. “My personal belief is that there is an omni-channel approach to messaging. There are many ways of delivering messaging – including RCS – but no one messaging type will dominate. It all depends on each customer and what engagement they want. Do they want a notification or a conversation; is that an ongoing conversation, or just the transaction you are dealing with? It will depend on how people behave when they see RCS in action. The big question for me is whether it’s seen as useful or obtrusive.”

Nick Lane, chief analyst, Mobilesquared, which has done extensive analysis of RCS and its potential market agrees. There is a strong role for RCS, but as part of an overall idea of business messaging.

“RCS won’t replace SMS, but SMS will decline from 2022 as some 2G and 3G networks start to be decommissioned and as 5G sees more people use RCS. It is a balance that will slowly shift,” he says.

However, “Corporates that we explain RCS to see it could be favoured channel, with some 12% of businesses saying they would use it. What is interesting is, when you add SMS to that and call the combined entity ‘business messaging’ you find that a third of businesses want to use it. That is way ahead of all others other than email and phone – way out in front of FB Messenger and Whatsapp.”

HEAR NICK LANE FROM MOBILESQUARED TALK ABOUT RCS IN THIS EXCLUSIVE INTERVIEW VIDEO

https://youtu.be/jcoWjh9tUm0

Where is RCS at?

According to Lane’s research, RCS is happening. “It’s starting to move along quicker with the next 18 months being about acceleration and growth,” he says. “Google has rolled out Google Guest so that, in theory, anyone with an Android device in the UK, France and Germany can access RCS, So it can become a service that generates revenue.”

Lane continues: “RCS is here today, but in terms of scale it will be mid-2020 before it starts to get critical mass. We expect the main 36 MNOs in Europe to have it in place by the end of 2020.”

While many RCS detractors claim that Whatsapp is the clear heir to SMS with its 1.5 billion users, you have to get them to opt in… “It isn’t the go to channel,” says Lane. “RCS will let you use your existing SMS database to message them. That is very powerful.”

And, he says, we are starting to see some interesting case studies emerging in the coming months (see page 12). “So far, we have only had the same few trials to draw on to showcase RCS, but that is now changing with some pretty big names now using it. That should get things moving.”

Another area that has been seen to potentially hold back RCS has been pricing. Until now, it has been looked at as something that will be sold on a ‘per session’ model, priced as a multiple of SMS charges, often at quite a mark-up. Now, we are starting to see some service providers look at simple per message pricing.

In fact, mGage, which is one of the leading aggregators – along with IMIMobile – in pushing RCS has been one of the first to declare a price per message model of 6p, about three times the cost of an SMS.

“RCS is very rich and engaging so the value is there,” comments Nick Millard from mGage.

Mobilesquared’s Lane agrees: “Pricing models are being sorted and it very much needs a price per message model. This will really help.”

The other advantage that RCS brings and why telemedia needs to watch its development closely is that it could be a huge driver of carrier billing. “DCB fits perfectly with RCS: it is on-mobile, doesn’t affect the flow and could well be a massive driver for carrier billing as users start to see how convenient it is,” says Lane.

And that is why we are going to see more RCS in 2020 and how it will start to become the de facto experience for messaging. As SMS starts to decline as networks are switched off, it is a natural heir and one that offers huge opportunity for telemedia.

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