The CCA Voice - Fall/Winter 2012 - (Page 24)
THEME: GETTING TO THE NEXT ‘G’
Preserving Messaging Revenue with RCS
OTT messaging options are rapidly gaining mind and market share—to the tune of $13.9 billion, the estimated amount of revenue carriers lost to OTT services last year, according to Ovum. Provided by third parties, these services are carried over data networks or Wi-Fi, providing carriers with little to no revenue. The growing popularity of OTT services is largely attributed to increased use of smartphones, which have Web browsers and the ability to run thirdparty and preloaded applications, giving subscribers new, more sophisticated communication options. In fact, Informa estimates that every 10 percent increase in smartphone penetration costs Western European carriers $1.19 billion in voice and messaging revenues annually. On average, CCA carrier members oﬀer 22 diﬀerent handset models to subscribers, according to the 2011 CCA Member Survey. Though carriers are likely to enhance subscriber loyalty by increasing the number of smartphones available to subscribers, they also risk losing traditional SMS and MMS revenues to OTT messaging services. The in-demand Apple iPhone, for example, has the iMessage service preinstalled with its iOS 5 software. Enabling users to send texts, photos, videos, contact information, and group messages to other Mac and iOS users, iMessage is free. It also provides other common OTT features, such as delivery notiﬁcations and “…is typing” indicators—all from the Messages application. Though introducing the iPhone may be of strategic importance, carriers should consider how their subscribers’ move to this device could impact their SMS and MMS revenues. RCS gives carriers the opportunity to compete with OTT options like iMessage and maintain messaging revenues. With RCS, an enhanced address book serves as the central point of communication for both voice calls and messaging. Each contact is displayed with communication capabilities and presence information—such as current status, location, and available services. After selecting a contact, users can conduct individual or group chats and can share video, images, or other ﬁles during voice calls. Because RCS provides backward compatibility with SMS and MMS, users can message from their address book even with mobile users that do not have RCS. This provides RCS with ubiquity that some OTT services lack, since OTT options typically require users to share a common operating system or application. With advanced RCS 5.0 capabilities, carriers can also deploy RCS clients to multiple device types, extending communication capabilities to tablets and PCs in addition to mobile phones. The RCS network address book synchronizes contacts and conversation histories across these devices, preserving communication activity and enabling subscribers to move from one device to another during a conversation. Though RCS speciﬁcations require an IP Multimedia Subsystem (IMS), some vendors have developed RCS solutions that enable carriers to launch RCS without IMS. As a result, carriers can introduce this service immediately on 4G or earlier generation networks to strengthen their oﬀering and combat OTT options. Many carriers are moving forward with their LTE network buildouts to accommodate increased data usage, but they should also consider how advanced services like RCS can help to preserve messaging revenues and combat the threat of OTT options. As a natural extension of the original messaging services that subscribers have clearly embraced, RCS is a state-of-the art application that will strengthen carriers’ brands and ensure subscriber loyalty as competition continues to intensify.
By Damian Sazama, Vice President of
Corporate & Product Marketing, Interop Technologies
n today’s mobile environment, a growing number of carriers are transitioning to Long-Term Evolution— or LTE—networks to meet growing demand for data use. At the same time, subscribers are demonstrating increased interest in “over-the-top” (OTT) messaging applications like WhatsApp, BlackBerry Messenger, and iMessage at the expense of traditional SMS and MMS use. OTT options provide in-demand features that legacy messaging services lack and are often preloaded on mobile devices. Though many CCA carriers are focused on their LTE buildouts to remain competitive and enhance the customer experience, they should also address subscribers’ changing messaging behavior or risk losing revenue to OTT players. Rich Communication Suite (RCS)—an advanced communication service with messaging features like an enhanced address book, individual and group chat, and ﬁle sharing during communication sessions—represents an opportunity for carriers to preserve messaging revenues on 4G or earlier generation networks as competition from popular OTT services mounts.
VOICE • www.competitivecarriers.org • Fall/Winter 2012
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