171026_Ovum_Telcos' Opportunities for RCS in the Enterprise (3)

Telcos' Opportunit O pportunities ies for fo r RCS in the Enterprise Consumer take-up lackluster but GSMA and Google proide RCS boost

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Telcos' Te lcos' Opportunities for RCS i n the Enterprise

Summar+ ,n brief The partnership beteen internet giant Google. telco industr+ bod+ the GSM Association /GSMA0. and global operators to deelop and facilitate the adoption of enhanced communication serices based on the GSMA's Rich Communication Communication Serices /RCS0 specifications is beginning to bear fruit1 Consumer adoption of RCS serices is groing. and the ecos+stem for RCS-based application-toapplication-toconsumer /A$!0 communications is starting to take shape1 Telcos ma+ hae lost the initiatie on person-to-person /!$!0 to chat. but the+ still hold the hip hand in A$!. due to the popularit+ of SMS as an enterprise messaging communications channel1 Android Messages and the RCS 2niersal !rofile has opened a brief indo of opportunit+ for telcos. and. as ith !$! SMS. it is an opportunit+ that is theirs to lose1

Oum ie 

Mobile operators have been reticent in engaging with RCS, and monthly active users (MAUs) remain low by comparison with chat apps. The rapid deelopment and groth of chat apps resulted in a crisis of confidence among telcos as to hether 3 or ho 3 the+ should upgrade their legac+ oice and messaging serices1 Relatiel+ fe mobile operators outside of the large operator groups /4odafone. "eutsche Telecom. Telefonica. and Orange0 hae launched RCS serices1

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he reinvigoration o! RCS over the past two years is primarily down to "oogle, via its ac#uisition o! $ibe Mobile in September %&'. Google has pushed the GSMA and participating telcos and OEMs to unif+ behind the RCS 2niersal !rofile for Adanced Communications1 ,t has also deeloped the Android Messages natie RCS messaging client and introduced an Earl+ Access !rogram !rogram /EA!0 to facilitate business use of RCS ia messaging-as-a-platform /Maa!0. and it is enabling RCS interconnection beteen operators ia the 5ibe hub1

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elcos may have dropped the ball on % communications, but there is still everything to play !or in A%* a success!ul transition !rom SMS may even help RCS+s chances in the consumer maret. RCS maret. RCS 2niersal !rofile Release $ enables enterprises enterprises to use rich communications to engage ith customers. building on the e6isting A$! SMS ecos+stem1 A good user e6perience ith a brand ia its RCS-based campaign ma+ encourage further consumer adoption of RCS1 7oeer. brands also ant the idest possible reach. hich RCS ma+ not hae in the markets that brands are targeting1 8ack of reach could be an inhibitor for enterprises. een gien RCS's capabilit+ for fallback to SMS1

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elcos will be unable to charge consumers !or RCS services, but they could generate revenues !rom enterprises. Chat apps alread+ offer free in-app messaging. oice. and ideo calling. hich precludes telcos from charging their customers to access these serices in Android Messages1 Messages1 7oeer. 7oeer. assuming assuming telcos can pla+ a similar similar role in the RCS-based RCS-based Maa! Maa! ecos+stem as the+ do in the A$! SMS ecos+stem. the+ should be able to generate reenues from business use of RCS1

9 Oum1 All rights resered1 2nauthori:ed reproduction prohibited1

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Telcos' Opportunities for RCS i n the Enterprise

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RCS still !aces signi!icant challenges. These challenges include building scale. enabling interconnection. concerns about Google taking a role in the RCS ecos+stem. and Apple's lack of support for RCS1

Recommendations 

"iven that momentum appears to be building around RCS due to the involvement o! "oogle, telcos should decide whether it maes sense !or them to also launch RCS services. Chat apps such as ;hatsApp.
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o ensure standards harmoni-ation and maimum e!!ectiveness, telcos should launch services based on the RCS Universal ro!ile, rather than on earlier versions o! the standard (such as /lacbird). Scaleill be ital to the success of serices based on the RCS 2niersal !rofile. and this can onl+ be achieed b+ telcos offering RCS serices that are interoperable ith those offered b+ other netorks1

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elcos should be aware that "oogle is not the only player in town. Samsung is also offering an RCS platform. including clients. application serers. a hub. and a moneti:ation platform. hich are based on the RCS 2niersal !rofile1 Telcos ar+ of orking ith Google hae an alternatie option in Samsung. and the+ can also deelop their on platforms1

Market status Operator deplo+ment and consumer take-up of RCS serices hae been slo Serices based on the GSMA's RCS had amassed onl+ *( million MA2s globall+ b+ 5une $&(. despite the efforts of the tier- European-head=uartered operators 4odafone. "eutsche Telekom. Orange. and Telefonica. the efforts of the 2S telcos Sprint. T-Mobile 2SA. and AT>T. and the more recent actie participation of Google1 And een though these telcos launched RCS serices some time ago. the+ appear to hae been leapfrogged in terms of user numbers b+ ,ndian operator Reliance 5io. a ne entrant that launched commercial serices. including the 5io?G4oice RCS serice. on its 8TE ?G netork in September $&%1 @+

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billion global MA2s1
had discontinued their serices1 0igure '1 "lobal distribution o! commercial RCS services, end2%3'4

Source# Oum


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Google's entr+ returns unit+ to fragmented RCS standards Google's September $& ac=uisition of 5ibe Mobile. an RCS platform and hubbing proider. and its partnership ith the GSMA and multiple telcos in
Release % ($uly %&'4* additional !eatures)

Capabilit+ discoer+

A$! messaging

Chat

Chatbots

Group chat

!lug-ins for third-part+ content

Rich cards

Audio messaging

!riac+ control

4ideo share

Spam protection

Multi-deice

Smart repl+

Enriched calling

Action buttons

8ocation sharing

8ie sketching

Source# GSMA


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Operators that hae deeloped and deplo+ed their on RCS clients 3 based on preious ersions of the specifications. and specificall+ RCS @lackbird 3 ill continue to offer and support these serices as the+ go through the process of rolling out Android Messages and migrating users to it1 Een though relatiel+ fe consumers are engaging ith RCS serices. Google has been orking ith the GSMA to deelop RCS as a platform for enterprise messaging. otherise knon as the messaging-as-a-platform /Maa!0 initiatie1 Maa! is being positioned as an upgrade to A$! SMS. hich ould enable businesses to send their customers RCS-based communications and content. falling back to SMS for customers ho do not hae RCS-capable deices1 ,t ould also enable businesses to deelop use cases for RCS-based ,nternet of Things /,oT01 ,n 5ul+ $&(. the GSMA announced the launch of RCS 2niersal !rofile Release $ /see Table 0. hich adds the Maa!oriented specifications1 The idea is that enhancing customers' communications e6periences hen interacting ith their serice proiders ill help drie further consumer use of RCS serices1 ,n a related deelopment. Hust before M;C $&(. Google announced the launch of an Earl+ Access !rogram /EA!0 for businesses. enabling enterprises and messaging connectiit+ proiders to partner on the deelopment and testing of RCS enterprise messaging serices /see Table $01 EA! participants 4irgin Trains. ;algreens. and Orange demonstrated RCS business messaging use cases at M;C $&(. including chatbots1 Again. the inclusion of chatbots on RCS has been a long time coming. ith RCS endor Solaiemes /ac=uired b+ Comerse in $&?. and no part of Maenir0 first demonstrating this capabilit+ for RCS in $&$1


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able %1 Member companies, 8A !or RCS business messaging Connectivity9mobile engagement service providers

Mobile mareting plat!orm and service Cloud communications providers providers

Aldeamo

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4onage /e6mo0

C8J Communications

E6perian Marketing

Kiphip

CM Telecom

,M,mobile

,C< Olson

Mobiit+

,mpact Mobile

Moile Messaging

8ink Mobilit+

Take

Message@ird

4ibes

mGage

;aterfall

OpenMarket

SA! "igital ,nterconnect

Silerstreet

Kenia

Source# Google

Market d+namics After a slo start. Google has some of its ducks in a ro Google has faced its on challenges in deeloping a successful mobile communication app1 ,t first created seeral separate communication apps. including Google Talk. GoogleL Messenger. Google 4oice. and 7angouts. before combining elements of each to create the Google 7angouts communication platform1 2nfortunatel+. none of these apps has been hugel+ successful b+ comparison to the larger chat apps ith hich Google might hae been e6pected to compete. gien its resources and scale1

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Android Messages has been deliering an upgrade to the SMS e6perience that is also interoperableI achieing this is important for building scale of RCS serices1 Google's ork on RCS in $&% focused on three ke+ areas. sa+s Amir Sarhangi. the compan+'s head of RCS# deeloping Android Messages as a natie deice client. consolidating its cloud RCS capabilit+. and enabling interconnection1 ,t as important for Google to ork on these areas since. for the telcos. the+ represented barriers to adoption1 The ke+ ork tasks for Google ith respect to Android Messages inoled adding RCS capabilities based on the 2niersal !rofile for Adanced Messaging to its Messenger for Android app. hich as subse=uentl+ rebranded Android Messages to strengthen the consumer proposition1 The app-based approach to proiding an RCS serice means that ne RCS features can be deliered as a softare update as the+ are deeloped or in response to customer feedback1 Concurrentl+. Google ported the 5ibe RCS Cloud to the Google Cloud !latform1 5ibe RCS Cloud is a hosted serice aimed at helping telcos to launch RCS serices =uickl+ and more easil+I Sarhangi sa+s that this can be achieed in si6 to eight eeks. adding that the capabilit+ is alread+ aailable in si6 countries1 Google recogni:es that enabling operators to launch RCS serices =uickl+ is as critical to achieing scale as the natie aailabilit+ of Android Messages on deices1 Sprint. Rogers Communications. Globe. Orange. Telenor. and "eutsche Telekom either use the 5ibe RCS Cloud alread+ or hae committed to doing so1 Google also ants to help the GSMA achiee the same kind of uniersal connectiit+ that legac+ telco serices such as SMS and oice enHo+ toda+. and again. the 5ibe RCS Cloud ill pla+ a role in this. as it enables hubbing for RCS serices1 Telcos that deplo+ RCS serices based on the 5ibe cloud platform ill also automaticall+ hae access to the 5ibe's RCS hub1

Sprint is !irst o!! the mar with the new RCS Universal ro!ile 2S operator Sprint as the first telco to launch the Android Messages enhanced messaging serice based on the RCS 2niersal !rofile for Adanced Messaging. in oember $&%1 Sprint is pitching Android Messages as an upgrade to SMS. in that it keeps SMS but adds features such as group chat. photo sharing. and read receipts1 ,nitiall+. Sprint enabled the serice as an update on selected 8G and e6us deices. hile oners of other t+pes of Android deices ere re=uired to donload Android Messages from Google !la+1 7oeer. from $&(. all ne Android deices from Sprint ill come ith Android Messages as the default messaging client. remoing a significant entr+ barrier to RCS to date# conincing mobile users to donload and use an RCS app1 Android Messages is not Sprint's first fora+ into RCS serices1 The telco is alread+ offering the RCSbased Messaging !lus for Android and iOS. hich enables chat and group chat. oice and ideo calling. and the sharing of content and location1 Sprint partnered ith Google's RCS platform proider subsidiar+. 5ibe. to offer Messaging !lus. but it is unclear hether Sprint means to continue offering this serice1

"oogle+s partnership with elenor is a big deal Google's partnership ith Telenor for RCS means that Telenor subscribers ho alread+ hae Android Messages ill receie the RCS capabilities through an app update. hile those ho do not can donload the app from Google !la+1 Also. ne Android deices aailable through Telenor ill come preloaded ith Android Messages as the default messaging app. meaning that the combined RCS-


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SMS capabilities ill be aailable natiel+ to users /like iMessage0. and that the+ ill be aailable across multiple handset makes and models /unlike iMessage01 Google's partnership ith Telenor to roll out RCS serices in * markets across Europe and Asia ill make it the second-largest deplo+ment of RCS serices at a telco-group leel behind 4odafone. hich has launched its MessageL and CallL serice in ? markets in Europe. and Android Messages in & European markets1 Telenor launched Android Messages in ora+ in 5une $&(1

@ut it's not Hust about Google# Samsung ants in on RCS. too Samsung also announced at M;C $&( that it ill e6pand the aailabilit+ of its RCS platform. based on its ac=uisition of endor eet Communications Technologies1 8ike Google's 5ibe. the eet platform includes natie and donloadable RCS clients. cloud-based RCS application serices. an RCS hub. and a moneti:ation platform1 Samsung ill be able to add its on Android-based handsets into the e=uation as ell. ith all future Samsung smartphones running Android Marshmallo or later including natie RCS messaging capabilities based on the 2niersal !rofile for Adanced Messaging /not Android Messages01 Earlier-model Samsung Android deices ill hae access to the same capabilities ia a donloadable client1 Samsung sa+s that it is orking ith operators including "eutsche Telekom. Dorea Telecom. SD Telecom. and 4odafone. and that its platform ill enable interconnectiit+ not onl+ among the operators. but also ith third-part+ RCS clouds 3 presumabl+ meaning Google1 "r1 7eimbach emphasi:ed that Samsung is full+ supportie of RCS. and Oum understands that the endor intends to cooperate ith the GSMA and Google. especiall+ as the focus moes toard enabling RCS for @usiness1
Market outlook Maa! is mooted as the ne6t step for RCS As preiousl+ mentioned. Release $ of the 2niersal !rofile paes the a+ for telcos and the ider enterprise messaging ecos+stem. including brands and serice proiders in arious industr+ erticals. to offer consumers enhanced communications e6periences that build on the popularit+ of A$! SMS as a customer engagement channel1 Oum forecasts that A$! SMS traffic ill gro from 1% trillion messages in $&% /B1& of total SMS traffic0 to 1$B trillion messages b+ $& /$*1( of total SMS traffic. and then decline beteen $& and $&$ as consumers start to engage more ith enterprises ia chat apps /see

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0igure %1 "lobal A% SMS tra!!ic, %&':;%'

Source# Oum

SMS has become popular as a communications channel beteen serice proiders and brands and their customers. emplo+ees. and the public. oing to its natie aailabilit+ on all mobile phones and operator netorks. its uniersal interoperabilit+ beteen netorks and deices. its lo cost relatie to other customer engagement channels. and its relatiel+ high reliabilit+. securit+. and priac+1 Consumers are also =uicker to read and respond to A$! SMS than other forms of communication from their serice proiders1 ,n addition. A$! SMS is a ell-used channel oing to a ell-established ecos+stem. hich includes mobile operators. SMS aggregators and other t+pes of connectiit+ serice proiders. infrastructure endors. customer engagement platform proiders. and business softare companies1 The GSMA and its partners are seeking to build on the capabilities of A$! SMS that hae made it so popular as a form of business-to-consumer /@$C0 communications. as the+ moe forard ith Maa! and RCS for @usiness1 7oeer. SMS has some limitations as a communications channel. and these hae become more apparent as chat apps open their platforms to enable brands and serice proiders to engage ith their users1 Chief among them is the %&-character. te6t-onl+ format. hich. hile alid for man+ use cases. constrains brands and serice proiders in hat the+ can cone+ to or elicit from their target audiences1 Also. SMS does not enable graphical content. hich is becoming increasingl+ important as communications gro eer more isual1 Conse=uentl+. SMS-initiated interactions are often fulfilled ia another channel. such as a phone call. an app. or a ebsite1 The character limit also preents brands from being able to proide their customers ith an instantl+ recogni:able and erified Sender ,"1 @randed Sender ," is aailable for A$! SMS. but there is a limit to the number of characters that brands can use. meaning brands ma+ either choose not to use it 3 hich means their onl+ identification is a long or short code 3 or choose to use a bastardi:ed ersion of their brand as the Sender ,"1 ,n either case. consumers are often unable to immediatel+ recogni:e and conse=uentl+ trust here the message is coming from1 RCS 2niersal !rofile addresses some of these ke+ shortcomings of SMS1

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The premise of Maa! is that it enables enterprises to hae more graphical interactions ith their customers. using enhanced messaging serices based on the RCS 2niersal !rofile /e1g1 Android Messages0. such as rich cards1 As ith SMS. customers ith Android Messages enabled on their deices ill automaticall+ receie enhanced messages from participating brands and serice proiders1 Messages ill default to SMS here Android Messages is not supported or a broadband data connection is not aailable1 Conse=uentl+. Maa! represents some ke+ potential adantages for telcos1 ,t ma+ help mobile operators reduce subscriber churn. since consumers ma+ sitch to telcos that enable brands to offer their customers enhanced messaging e6periences1 Also. telcos enHo+ a high leel of consumer trust. particularl+ as a channel for pa+mentsI this trust can be leeraged b+ telcos to enable pa+ments for brands that might ant to use Maa! and Android Messages to enable transactions1

Google opens a indo for telcos Google's inolement in the RCS initiatie has gien telcos a indo of opportunit+ in the @$C communications market. one that telcos sorel+ need gien that their !$! SMS traffic and reenues hae been hit hard b+ the groing popularit+ of chat apps for consumer communications1 Man+ of these chat apps are transitioning. or hae transitioned. into platforms for content. commerce. and business communications as ell1 The underl+ing ecos+stem for chat app engagement beteen enterprises and consumers is nascent b+ comparison to the A$! SMS ecos+stem. but it ill rapidl+ deelop. gien the sheer si:e of the opportunit+ represented b+ chat apps such as ;hatsApp.
Sure+ finds enterprise interest in richer communications and chatbot-like e6periences Oum's Enterprise Messaging Sure+. hich as conducted in Ma+ $&( and canassed && senior e6ecuties in seen countries across multiple industr+ erticals. proides some alidation of enterprise interest in using enhanced SMS or adanced messaging serices such as those based on RCS1 The sure+ found that *% of respondents' organi:ations ould be interested in using enhanced SMS or adanced messaging serices to engage ith their customers. emplo+ees. and the public1


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Oum also asked participants h+ their organi:ations ould be interested in using enhanced SMS. ith most /?0 indicating that it ould enable richer communications. including images and ideos /see
Source# Oum Enterprise Messaging Sure+. Ma+ $&(

Of the respondents ho indicated that their organi:ations ould not be interested in using RCS serices. the highest proportion /%?0 said it as because their organi:ation did not see an+ benefits in using enhanced SMS /see

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that balance the increased costs of proiding the serice against the benefits it ill proide. and make it easier for enterprises to access and integrate enhanced SMSNadanced messaging into their e6isting customer serice frameorks and infrastructure1 This obHectie takes on greater urgenc+ as Apple prepares to roll out iMessage @usiness Chat later this +ear. hich is aimed at enabling enterprises to use iMessage to communicate ith their customers1

Chatbots give telcos a chance to catch up with chat apps Adding chatbot support to Release $ of the RCS 2niersal !rofile is significantI it means that the capabilities of RCS are not that far behind chat apps /although user adoption and scale remain a significant challenge for operators01 All the maHor chat apps are offering platforms that enable deelopers. including enterprises. to create chatbots and use them to interact ith their chat app users. ith ar+ing degrees of automation1

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@ut it also appears that respondents' organi:ations are alread+ registering multiple benefits from deplo+ing one or more chatbots# (% of respondents said that their organi:ations had measured improements in customer serice. ($ had seen increased reenues. and %? had e6perienced reduced churn /see

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0igure 71 8nterprises+ eperiences o! using chatbots


,n addition. an ecos+stem is starting to form around chatbots. outside of the chat app platforms themseles1
The deelopment of use cases is ell adanced Google and other members of the EA! hae alread+ deeloped use cases around Maa!. including the 2D's 4irgin Trains. pharmac+ chain ;algreens @oots Alliance. and mobile operator Orange1

Use case1 =irgin rains 4irgin Trains demonstrated its RCS-based customer interaction capabilit+ at M;C $&(. sa+ing it ill help it to further improe its aard-inning SMS alerts serice. hich it deeloped ith partner OpenMarket. the Amdocs-oned mobile engagement platform proider1 4irgin Trains uses SMS to send its customers staggered alerts of platform announcements at 8ondon's Euston Station. to enable better crod control at the time of boarding1 Euston is 4irgin Trains' main 2D station. ith ($ million 4irgin Trains passengers passing through annuall+1 !rior to the


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introduction of the SMS alerts. each platform announcement precipitated the simultaneous moement of about %& people1 To improe the boarding e6perience. 4irgin Trains sends opted-in customers an SMS to alert them that a platform announcement is imminent. folloed b+ an SMS a short time later announcing the platform1 ,n addition. $ of passengers receie the te6ts ahead of the rest of the passengers. and announcements on the station boards are dela+ed b+ ( seconds1 These measures mean that the number of passengers moing at the same time is reduced. enabling a smoother boarding e6perience for all customers1 @ut 4irgin Trains is keen to further improe its customer interaction at the point of trael. and it also ants to address shortcomings in branding and customer anal+tics1
Use case1 >algreens /oots Alliance ;algreens is one of the largest pharmac+ chains in the 2S. ith B.&& stores nationide sering & million customers a da+. in-store and online. and filling $& million scripts a +ear1 Dartik Subramanian. director of mobile product management and the A!,s and ,nnoation team for ;algreens' oner. ;algreens @oots Alliance. told M;C $&( delegates that more than ( of 2S residents lie ithin Bkm of a ;algreens or "uane Reade store /also oned b+ ;algreen @oots Alliance01 The compan+ alread+ offers a range of mobile customer engagement products1 These include SMS alerts notif+ing hen prescriptions need to be refilled /ith a to-a+ capabilit+ alloing customers to respond0 and hen the+ are read+ for collection. hich together generate millions of SMS1 7oeer. there are use cases that are not specificall+ messaging-based. such as digital coupons. photo printing. telehealth. and the abilit+ for customers to order refills for their prescriptions b+ scanning and sending barcodes using their smartphones1 ;algreens is keen to e6plore ho it can transition non-messaging-based use cases to the messaging enironment ia RCS1 One e6ample is photo printing. hich ;algreens currentl+ enables ia a mobile app but hich could also be fulfilled using RCS messaging1 ;algreens customers could use a chatbot on an RCS messaging client to carr+ out all the functions that the+ ould e6pect to be able to access


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ia an app. such as selecting print si:es. the number of prints. and the branch from hich the+ ould like to pick up their order1

Maa could etend RCS to the smart home and the ?o ,n addition to the @$C use cases outlined aboe. the RCS 2niersal !rofile for Adanced Communications ill enable enterprises to e6plore opportunities for connected deices. such as those used in the smart home1 ,n addition to an organi:ation's chatbots appearing in a consumer's RCS contact list. the contact list could include smart meters. home lighting and enironmental controls. and entertainment s+stems. such that the consumer could manage their smart home remotel+ ia Android Messages /although the+ are more likel+ to manage their smart home ia Google 7ome01

Getting don to business# ;here are the reenuesP Making a business case for RCS serices has ala+s been a significant challenge for mobile operators1 The groing popularit+ of chat apps 3 hich offer free in-app messaging. oice. and ideo calling 3 has drien mobile operators to transition from charging their customers relatiel+ high prices for oice and messaging serices to charging relatiel+ lo prices for large bundles of messages and minutes or unlimited messages and minutes /often combined ith mobile data01 Telcos are unable to charge their consumer customers additional subscription fees for ne RCS serices. hich ould offer similar serices to those proided b+ the chat apps for free1 Conse=uentl+. the business model for RCS consumer serices is primaril+ in reducing customer churn to chat apps b+ proiding an enhanced communications e6perience. rather than generating direct reenue1 Oum understands that the commercial arrangements for RCS interconnection beteen telcos hae been defined. and are broadl+ based on the commercial arrangements alread+ in place for serices such as oice and SMS1 7oeer. the GSMA. participating mobile operators. Google. and Samsung are seeking to simplif+ interconnection for RCS serices. ith an emphasis on spam preention1 7oeer. Maa! could potentiall+ open an aenue of moneti:ation for telcos. since it ould allo them to proide enhanced @$C communications ia serices based on the RCS 2niersal !rofile for Adanced Communications. for hich the+ could charge enterprises a premium oer A$! SMS1 ,t ould be desirable for telcos to charge enterprises to use RCS-based messaging. since not doing so could result in problems such as spam1 ,t is possible that telcos could pursue an ad-funded model for proiding RCS serices. gien that RCS ould gie them the opportunit+ to use rich-media adertising1 7oeer. it is unlikel+ that telcos ill offer ad-funded RCS. since using adertising to fund communication serices has preiousl+ proed unpopular ith customers1 Oum's Enterprise Messaging Sure+ $&( found that. of the respondents ho indicated that their organi:ation ould be interested in using enhanced SMS. more than half /%0 ould e6pect to pa+ at least 1 times the price of ordinar+ SMS. and * ould e6pect to pa+ at least double /see

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0igure 41 8nterprises+ epectations o! enhanced SMS price relative to ordinary per2message SMS price


Respondents ere also asked hat their organi:ation's preferred pricing model for enhanced messaging ould be. ith * indicating that the+ ould like to pa+ per message bundle /for e6ample a bundle of & messages0. ith the price ar+ing depending on total messaging olumes /see


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Man+ challenges still la+ ahead for RCS Scale is necessary !or consumer and enterprise engagement The inolement of Google has clearl+ gien RCS a boost. but its success is b+ no means certain1 As mentioned preiousl+. building scale is a huge challenge. both in terms of telcos launching RCS serices and consumers using such serices1 ;ith *( million MA2s. telcos' RCS serices still lag significantl+ behind chat apps such as ;hatsApp.
?nterconnection is largely noneistent ,f RCS is to achiee the same leel of scale as chat apps. then interoperabilit+ beteen operator serices /and not Hust beteen opcos in the same t elco group0 ill be as necessar+ as making RCS natiel+ aailable in deices1 So far.
"oogle1 0riend or !oe Google's drie to create an iMessage-like e6perience on Android deices ith Android Messages is understandabl+ regarded ith suspicion b+ some operators1 Telcos ie Android Messages as a threat to their e6isting businesses. including legac+ oice and messaging /both !$! and A$!0. in much the same a+ as chat apps such as ;hatsApp and

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and "uo ideo calling apps. and it is possible that Google could integrate the capabilities of one or both apps ith Android Messages in the future. hich ma+ hae negatie implications for telcos1 Oum understands that Google is offering telcos free RCS application serers for to +ears. loering the barriers to telco adoption of the RCS 2niersal !rofile and Android Messages b+ taking costs out of the e=uation1 7oeer. it is unlikel+ that Google's moties are entirel+ altruisticI there is the possibilit+ that the internet giant could deplo+ to Android Messages the same kinds of sophisticated data collection techni=ues it uses to target adertising across its other serices1 Although it is e6tremel+ unlikel+ that telcos ould enable Google to insert adertising into their Android Messages serices. it is possible that Google could use an+ data it collects ia Android Messages for other purposes1 Mobile operators ma+ hae alread+ ceded some control to Google for !$! messaging. ith Android Messages. but industr+ insiders arn that telcos should retain control of their RCS infrastructure and ho it is accessed /e1g1 b+ brands0. so that the+ can continue to pla+ a role in the A$! communication ecos+stem ia Maa!1 Google ill also need to demonstrate that it can support telcos' regulator+ obligations ith respect to communication serices. such as legal intercept and data priac+1 This ill be especiall+ important if Google is hosting Android Messages and Maa! for telcos on the 5ibe cloud1 Meanhile. telcos' regulator+ obligations ill almost certainl+ rule out the abilit+ for Android Messages to enable end-toend-encr+ption /E$EE0. hich has become a standard feature in other chat apps1 Although the lack of E$EE might deter consumers. there ma+ be an opportunit+ for the GSMA. Google. and telcos to deelop a secure messaging ariant of Android Messages specificall+ for use in the enterprise1

Still no support !or RCS !rom Apple One of the ke+ challenges in the adoption of RCS is that Apple does not support it natiel+ in iOS and has gien no indication that it ill do so in the future. hich ill make it impossible for RCS to achiee the uniersal penetration that SMS enHo+s1 Globall+. i!hones hae a much smaller installed base than Android deices# 1* of smartphones compared to B(1%1 7oeer. in markets such as the 2D. the 2S.
Appendi6 Methodolog+ This report is based on primar+ and secondar+ research obtained from sources including interies. conference sessions. Oum's Enterprise Messaging Sure+ $&(. and desk-based research1 ,t also uses data from Oum's Enhanced Telco Communications Services Tracker: 2Q17 and Mobile Messaging Traffic and Revenue orecast: 2!1"#21$


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Enhanced Telco Communications Tracker: 2Q17 . TE&&&*-&&&?B /August $&(0 Mobile Messaging Traffic and Revenue orecast: 2!1"'21 . TE&&&*-&&&(% /oember $&%0

Author !amela Clark-"ickson. !ractice 8eader. "igital Communications and Social etorking. Consumer Serices pamela1clark-dicksonQoum1com

Oum Consulting ;e hope that this anal+sis ill help +ou make informed and imaginatie business decisions1 ,f +ou hae further re=uirements. Oums consulting team ma+ be able to help +ou1
Cop+right notice and disclaimer The contents of this product are protected b+ international cop+right las. database rights and other intellectual propert+ rights1 The oner of these rights is ,nforma Telecoms and Media 8imited. our affiliates or other third part+ licensors1 All product and compan+ names and logos contained ithin or appearing on this product are the trademarks. serice marks or trading names of t heir respectie oners. including ,nforma Telecoms and Media 8imited1 This product ma+ not be copied. reproduced. distributed or transmitted in an+ form or b+ an+ means ithout the prior permission of ,nforma Telecoms and Media 8imited1 ;hilst reasonable efforts hae been made to ensure that the information and content of this product as correct as at the date of first publication. neither ,nforma Telecoms and Media 8imited nor an+ person engaged or emplo+ed b+ ,nforma Telecoms and Media 8imited accepts an+ liabilit+ for an+ errors. omissions or other inaccuracies1 Readers should independentl+ erif+ an+ facts and figures as no liabilit+ can be accepted in this regard 3 readers assume full responsibilit+ and risk accordingl+ for their use of such information and content1 An+ ies andNor opinions e6pressed in this product b+ indiidual authors or contributors are their personal ies andNor opinions and do not necessaril+ reflect the ies andNor opinions of ,nforma Telecoms and Media 8imited1


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171026_Ovum_Telcos' Opportunities for RCS in the Enterprise (3)

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