By Alex Duncan, CEO of Openmind
Customers are calling out for a feature rich messaging service from their mobile operators, according to a June report from the GSMA.
The report details that consumers are now demanding an operator-led app that includes access to all contacts, instant messaging, group messaging and real-time video calling, as well as new features like pre-calling.
This provides a wealth of hope to global operators who have, in recent years, increasingly struggled to compete in the mobile messaging market, with global SMS volumes are falling by a CAGR of 5.8 percent year-on-year. Sadly operators have done very little in response.
While most operators have focused their attentions on offering core services including SMS and voice calling, the likes of Whatsapp and Facebook Messenger have continued to develop new and exciting features fraction of the cost.
The result? Core communications services have slowly become commoditised and as such operators are beginning to feeling the pinch - revenue growth has significantly slowed – dropping to a CAGR of 3.1 percent per annum, from just over four percent in the period 2008 – 2014.
OTT players like Whatsapp currently hold the gold standard for messaging experience among smartphone users.
To win back market share and its associated revenues, operators must deliver a messaging experience that is equal to or better than what’s already on offer.
Crucially, this includes features that work interwork globally, regardless of network or location, just like SMS does today.
To deliver on this ‘one-size-fits-all’ opportunity, deploying a rich communication suite (RCS) is key.
RCS is able to deliver a consistent level of service that cannot be achieved by their OTT competitors, by providing rich IP-based features through a regulated and safeguarded network.
However, operators have famously struggled with a tangible business case for RCS.
Many historically feared they would struggle to recoup the cost for implementing an IMS infrastructure to support RCS, as it may not deliver any significant new revenue-generating services.
Earlier this year, Google announced its RCS solution, offering operators open, consistent and globally interoperable messaging services across Android devices.
Android shipments are expected to hit 1.62 billion worldwide by 2020, dominating 85 pecent of the global smartphone market.
These devices are expected to contain the native capability to host universal RCS, making the Google RCS proposition a promising one.
Google has helped to provide a path to globally ubiquitous RCS via Android, encouraging operators to consider a viable role for themselves in the messaging market.
However, to meet customer demand, operators will need to make some strategic decisions about which RCS solution they deploy.
There are two main options available to operators: source RCS applications themselves (via their network or a commercial cloud offering) or source applications within Google’s cloud-based RCS.
Below are four key considerations that may help operators with their choice of RCS:
Launching new services quickly
Operators will need to be able to differentiate their messaging services to deliver any meaningful impact within an already saturated market.
According to the GSMA, customers are keen to see new features including one-to-one chat, pre-calling and VoLTE from operators.
One of the advantages of hosted RCS is the level of service flexibility it offers operators, allowing them to roll-out unique and personalised services, quickly – an effective tool in maintaining customer loyalty and reducing churn.
However, the level of service flexibility can vary from solution to solution.
For example, some hosted solutions provide operators with a fixed set of communications features that can be deployed in a ‘pay-as-you-grow’ fashion.
While this ensures operators can act quickly and cost-effectively, it also limits operators to a set of ‘vanilla’ services.
Instead, operators must ensure that their hosted RCS is customisable, allowing them to create and remove messaging services alongside customer demand.
As highlighted by the recent GSMA report, subscribers are looking to their operators for new and innovative communication services.
In fact, the research showed subscribers preferred operator-led services to existing popular internet-based messaging services: 79 percent of those surveyed said such a service would be relevant to them, and 89 percent regarded them as unique.
Operators that opt for a hosted-RCS solution must also consider the branding and ownership risks.
For example, if branding is not appropriate an operators’ service maybe be perceived by the subscriber as a OEM service (à la Apple’s iMessenger).
This would reduce customer loyalty towards the operator and encourage churn.
RCS provides operators with access to customer insight through statistical data and customised reporting.
If used appropriately, this insight can help operators to improve network issues and service experiences.
However, operators must be wary of the ‘off-the-shelf’ reporting that can come with hosted-RCS services as they limit the ability to analyse data appropriately.
Operators must ensure that they choose a hosted solution that gives them the same access to statistical data and customised reporting from their own data centres.
Customer data storage
Consumers are increasingly concerned with brands and companies having access to their personal data, fearful that their personal information is being used for data-mining purposes.
Many hosted RCS solutions involve operator’s subscriber data being stored in thrd party locations, sometimes in other countries.
This could raise security concerns among subscribers and may comprise any enterprise or government customers an operator might have.
This is because they often require that data is stored locally, in the same country as their business, and in the operator’s premises.
Some hosted solutions can be deployed directly into an operator’s premises as a module, avoiding the same data security considerations of other hosted solutions.