Is RCS Already Too Late?

By Gary Kim March 06, 2014

Over the top applications appear to have been among bigger topics at the recent Mobile World Congress, perhaps in the same way that “Google” or “Skype” or “WhatsApp” have been in times recently past.

Nor have the fundamental concerns changed. With the adoption of Internet Protocol as the way virtually all networks now work, all networks have become loosely coupled, in terms of the relationship between transport and access, on one hand, and applications on the other hand.

In other words, app providers no longer “need carrier permission” to create services delivered over the networks. That fundamental change means innovation already has shifted primarily to third parties, and so has revenue opportunity and equity value.

The primary way new applications and services will be created is by unaffiliated third parties, not the access or transport providers.

That does not mean access or transport providers cannot try and increase the amount of “application value” they provide. That is why wide area network service providers are in the content delivery network business, for example.

Providing CDN services is one way to turn commodity bits into higher-value bits.

Likewise, Rich Communications Services is the telco answer to over the top messaging, voice and unified communication apps. The issue fundamentally is whether telcos can compete with WhatsApp and other services, given the lead WhatsApp, Skype, FaceTime and other OTT apps already have built.

You might say telcos face the same problem with OTT video entertainment or any of the emerging Internet of Things apps, mobile payments or connected car markets as well. Telcos have to move fast enough, with value enough, to head off third party competitors that in most cases will hit the market first.

So time to market is an issue, even aside from all the other obstacles large organizations always face when in competition with small, agile, focused organizations. So some might argue RCS already is too late to become a major factor in the consumer unified communications market. Analysts at iGR think that might be the case.

Movius, for example, says the GSMA-led Rich Communications Suite (RCS) will not be enough to reclaim revenues lost revenues lost to OTT providers. According to figures released by Ovum, operators will lose $54 billion by 2016 due to smartphone messaging apps. That might overstate matters, but the strategic assessment is widely shared. 




Edited by Cassandra Tucker

Contributing Editor

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