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Quo Vadis RCS?

19 November 2024 RCS · Messaging · Chatbots · Telcos

We are reading a lot of buzz and hype about RCS (Rich Communication Service) and RBM (rich business messaging, the A2P/P2A of RCS messaging) these days.

Telcos are happy with the final Apple OK to provide a native RCS iOS experience; they are claiming today that RCS has 1.1 billion users. The messaging aggregators, after being desperate at the lack of evolution of SMS and starting to become more agnostic, providing services on top of OTT messaging apps such as WhatsApp, Viber and others, are happy to return to a more familiar space (telco partnerships), but now with 21st-century messaging features.

Let’s analyze what is real behind this.

  • There are no 1.1 billion RCS users. The Android app being RCS-capable does not make its users RCS users, as most of its use today is to check OTP SMS or read some marketing promotions in plain text. Most people do not know they have a “WhatsApp-alike” messaging tool native in the phone.
  • Regarding aggregators, the RCS business model will be different from SMS, because now there is Google as the “elephant in the room”: an additional key player, infrastructure provider and hub connector. RCS finally happened thanks to Google, but it is not free: Google is now a key player in what was, until now, a theoretical telco business.
  • Telco representatives acknowledge that P2P leadership cannot be retaken from WhatsApp, but they look forward to RCS becoming the “app” for business messaging, separated from WhatsApp, which users would keep for P2P. This won’t happen: WhatsApp can create a clear UX separation between A2P and P2P in the same app, or even launch a complementary app for business messaging cases.

What was wrong with RCS?

  • Basically, the biggest failure of RCS was not launching in time. In 2010, RCS had an RCS core (with and without IMS), Android and iOS app clients, and an RCS API Gateway for business messaging and for web exposure (accessing from a web or smart-TV client). My startup then, Solaiemes (our blog here), created the first RCS API gateway (also with a developer portal to build cases) and wrote the first GSMA spec. RCS could have launched in 2009… 2009… 2009… (more or less at the same time as WhatsApp, and well before WhatsApp Business). A few years ago the Telefónica CEO and GSMA Chair, José María Álvarez-Pallete, said “We should have invented WhatsApp ourselves”, but in fact it was invented by the telcos, just not launched.
  • In order to protect the SMS cash cow, the telco mindset produced a list of procrastinating excuses to “buy time internally”. I had to listen many times to: “security requires telco provision of services”, “banks and other verticals will never ever use OTT messaging to reach customers”, “it is too soon”, “we can create a new spec with more features before launching”… While some (telcos) procrastinated, others (OTTs) delivered. Instead of refining specs with more features, OTTs added features by iterating with customers. The result is here. Delivering things pays off.
  • The third big mistake was the lack of investment. Telcos destroyed the tech ecosystem around RCS by not investing and not launching, and the only way to rescue RCS was to outsource a key role to Google (which acquired Jibe Mobile). Thanks to Google, RCS has now been launched, but it is still unclear whether a real ecosystem around it can be developed. I hope it will be possible.

What can be done now to make RCS a competitive option in the messaging space?

Basically… put some money and real will into doing things.

  • Stop claiming you have 1.1 or 2 billion users until you can say those users have actually used “RCS features” beyond plain text. Be humble and start working hard.
  • Advertise and market RCS to help users discover it.
  • Speed up and create easy frameworks to partner with aggregators, so as to launch a lot of A2P cases as soon as possible. And if you are not the incumbent now, competing is about undercutting the price of the incumbent player (WhatsApp).
  • Create non-commercial A2P services to help users discover RCS (info services, chat-based tools, chat-based games).
  • Embrace AI and data analysis to extract value from messaging.

There is a myriad of possibilities around messaging that a new tech ecosystem could provide, but it would need investment and early PoCs with an MVP. Telcos are not the owners of the “timing”: the timing is now fast-paced. It cannot take years to launch features, services and use cases; we are talking about months, and ideally weeks.

It makes no sense to complain about OTTs benefiting from huge telco investments in networks (3G, 4G, 5G, fiber) while not competing on “own services” to save pennies.

Yes, telcos, you still can compete, but you may need to let others help you.

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