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RCS - Three letters in search of an Audience

Guy Redmill spoke at the recent RCS Forum in Barcelona and presented preliminary findings from some on-going research on operator attitudes to RCS conducted with Moriana Group. We shall complete this study in due course, but the conference was extremely interesting. There have now been a number of operator trials, although no commercial launch has been announced (at the time of the event). This is proving to be a thorny problem.

Written by
Guy Redmill
Published on
28 Jan 2011

In addition to reports from operators, we heard much from vendors with RCS-ready solutions. There were some excellent solutions described, and one vendor made the point that RCS can unlock a host of related applications, just like SMS, provided some imagination and creativity is applied.

Despite this, it seems we are at an impasse. Worse, despite favourable reports from trials, there is no sign yet of true inter-operator trials, which surely are required if services are to be launched. Indeed, it seems the absence of these is a key inhibitor. Guy attended the same conference last year and also participated in the RCS Dev Challenge with one of our clients, NetDev . Some months later, it’s disappointing to report that there has been little positive momentum.

While the operators we interviewed had strong intentions regarding RCS, many suggested that the window for success would be brief. It seems this is all the more likely as there are now emerging services, for example from Nimbuzz and, as we found out during the event, from Facebook, that offer many of the capabilities of RCS but completely disinter-mediate the operator.

What is interesting is that there appeared to be consensus that RCS would not drive revenue per se, but that it was an important defensive measure. One operator explicitly commented that any business case would not be secured on revenue but rather on the basis of saving customer acquisition costs by helping customer retention. It seems logical that customers won’t pay for something that they can already obtain, at least in part, for free, and it’s naïve to think that they will, unless it offers something genuinely novel. So far, the subscribers involved in the trials did not appear to believe this was the case. On the basis of the Dev Challenge from last year, there is little innovation being recognised – most of the consumer-orientated services seemed merely to offer capabilities that are already available from alternative providers.

Of course, there was a bit of argy-bargy regarding just who is holding back the market. Operators blamed the handset vendors and interoperability, while vendors questioned operators’ time to market speed. Hmm. We shall see, but it seems likely that a combination of the above is playing its part. However, in our opinion, there is a larger problem.

There was a clear perception that operators were waiting for the standards to be perfected. This is typical behaviour, but is it really tenable in today’s world? Do things need to be perfect to achieve success in today’s consumer market? Surely it’s acceptable to introduce a service that offers something over and above basic messaging and then upgrade it incrementally over time? After all, this is what many of the OTT players do.

It may also be mistaken to believe that full interoperability with all players in a market is an essential pre-requisite. It seems that there is a belief that market entry must wait until all peers in a market are ready. This seems wrong, as given the size of the operators involved in trials, they can surely find enough “tribes” (as one operator termed them) within their own customer bases to make some sort of early launch feasible? While interoperability must be the end goal, it doesn’t follow that it is a pre-requisite, as many apparently think.

We will return to the theme of RCS through the year, as it’s sure to be in the headlines, but one thing’s for sure, unless someone acts quickly, the audience for RCS may disappear. What’s more, it may well be make-or-break year for those three little letters.

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