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Rich-Communication-Services-(RCS)-Opportunities-&-Challenges
Aashu Virmani
Sunday, January 3, 2010
It has been touted as the next big thing in the telecom world to connect the 4 billion strong telco user-community and provide them with an interoperable, rich media sharing experience. It has been termed a catalyst for “turning IMS based communication into a market opportunity”. It enjoys the support of more than eighty leading companies, including 28 of the world’s largest operators who represent 1.7 billion connected users. At the same time, the acronym “RCS” has also been termed “Really Considered Significantly Obsolete” even before the RCS experiences have hit the mainstream commercial market.

So what are the facts? Whose story do we believe? Depending on who you talk to, the answer may be different. In this short paper, we attempt to capture the strong points, as well as some of the weaknesses within this rather large industry initiative, and suggest ways in which the challenges could be addressed.

What Is RCS?

GSM Association’s website3 is a great place to get a quick introduction to RCS, if you are not already familiar with the initiative. In brief, RCS is a service vision that leverages existing successful mobile community experiences and enriches them in the following way:

* Building a community around the phonebook by adding presence and availability indicators to the address book.

* Enriching the messaging experience by adding chat, conversation histories and multimedia transfer between users

* Enriching the basic voice call by adding rich media sharing capabilities

Deliver the above concepts together on one device, make them work in an integrated manner across operator and country boundaries, and you get RCS. In short, RCS is a set of interoperable, enriched communication experiences.

The Opportunity

A Relevant Problem
Communication that a few years back was predominantly two-party voice conversation has evolved into life, event and experience sharing, involving all kinds of multimedia. The functionality in mobile devices today has increased several-fold with communication, entertainment and work tools all converging together into one unit.

RCS leverages the above to help operators avoid being turned into a bit-pipe – a relevant and timely proposition.

Interoperability Focus
The RCS initiative emphasizes interoperability across networks and operators. The first major interop effort around RCS is expected to take place among the three leading French operators, in an attempt to gauge both technical feasibility and market viability. Similar activities are happening in Japan and other parts of the world. This should help validate the universality of the service that the operators would like to be “as available as SMS” is today.

EcoSystem Involvement
The RCS ecosystem includes the entire spectrum of participants from large mobile operators, to network equipment providers, leading device manufacturers, and application infrastructure providers. This is not only a proof of the growing interest in RCS, but also a must for the success of a service. What started out as a group of ten participating companies is now supported by over eighty members from all across the world and growing.

Existing ID = Well Adopted experiences
This may be, by far, the least well understood, but greatest of RCS’ strengths. RCS does not attempt to recreate or define something brand new. It does however, attempt to take existing experiences and enrich them. Most of these experiences are tied into the user’s current phone book and begin by reusing the consumer’s existing ID – their basic phone number. Instead of needing to know a peer’s user name to be able to reach them via mobile IM, for example, RCS simply “enriches” the existing phone number with presence and capability indicators, eliminating the need to create yet another identity one must remember. This is subtle, but quite powerful – it gives RCS access to an instant community of peers 4 billion strong today.

The Challenges

Web 2.0 Fragmentation:
With a plethora of choices that abound in the Web 2.0 world, users are already using RCS-like experiences and are fragmented across social networks (Facebook, Bebo, Orkut), messaging communities (Yahoo, Skype, TenCent) and countless photo and video sharing sites across the internet.

Granted, these services and tools do not seamlessly work across each other, and often users have to resort to multiple identities and logins across many of these sites in order to address their entire “community”. Nevertheless, RCS must contend with this fragmentation and in fact, treat it as an opportunity to take the lead and tie these disparate services and islands through a unified experience for the mobile user.

Innovation at Telco Speed:
The RCS initiative, even by telco standards has been slow to get to market. Nearly two years after the initial announcement, the first market trials of RCS are just getting underway.

With each passing day, Operators run a greater risk of letting an internet based solution that provides RCS like experiences to gain mindshare and relegate them to being a dump pipe in the process – exactly what they are trying to avoid.

Metcalfe’s Law:
Initial releases of RCS have been defined such that an RCS user must first ‘find’ another RCS user in her address book to begin enjoying the RCS experience. Cross-operator interoperability can surely help, but we question its sufficiency. The picture below makes it abundantly clear.

RCS forecasts by Infonetics put the number of RCS users to around 1.2-1.3m worldwide in 2010. Insistence on the peer being part of the club creates a ‘fax-machine’ problem and might leave RCS with a long adoption cycle before the services become mass market.

Overcoming the Challenges: Break the ‘Fax-Machine’ Problem
Contrast the RCS penetration (above figure) with the Smartphone penetration in the same timeframe, and you’ll note that it is almost 200 times greater. What if each RCS user (inner blue circle) could communicate in a rich manner (as intended in RCS) with non-RCS peers who are in the inner green circle? This ensures that the first person to buy an RCS-ready terminal can find a good majority of friends in his phonebook who are ‘RCS-reachable’ if not fully RCS capable.

Embracing existing communities and social networks gives RCS users a greater reason to adopt the service and reach their peers on non-RCS communities. This is, without question, the biggest favor the RCS community can do for itself – make RCS relevant for its early adopters.

Customer in the loop
Dozens of interoperability tests have been conducted by the RCS community, yet there have hardly been any market trials involving real potential users and understanding the usage patterns and the user likes and dislikes. Perhaps what is needed is the Internet-style of innovation wherein market trials are regularly held, and the service is defined/improved based on the feedback from real users as opposed to a technology decision.

The Price and Packaging
RCS Release 1 was defined largely with trials and testing in mind. Going forward, the focus of this Go To Market body should be to help operators define a ‘service package’ suitable for their markets. If RCS helps sell additional ‘unlimited data plans’ then the service experiences might themselves be free. In other cases, a monthly add-on (much like SMS and MMS bundles) might make the business case work.

Interested operators could greatly use well documented best practices, cost-benefit analyses, recommendations on differentiating their offering and gather early user feedback to iteratively refine their service offering.

Conclusion

Media-rich communication experiences will be the norm in the future - it is not a question of IF, but rather a question of WHEN they’ll become mainstream and WHO will effectively monetize them. For the most part, existing mobile operators are well positioned to offer this next wave of communication services to their users and benefit from their infrastructure and radio network upgrades. The RCS initiative is certainly aware of the chinks in its armor and has taken several steps to rectify such weaknesses by increasing the pace and being a little more market oriented, with a bit less focus on specifying everything one hundred percent before presenting to real world users. These are certainly welcome moves. It remains to be seen how quickly this initiative will get a version of these services out in the market for users to try, and frantically adapt from then on, to ensure that RCS is the standard for rich communications needs of tomorrow.

The author is Head of Marketing, Aylus Networks. He can be reached at : aashu@aylus.com
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