Where Is the Industry Actually Headed? Whatsapp, RCS, and More

With Mobile World Congress coming up in less than two weeks, there are two developments that will no doubt be the most discussed topics in the messaging industry this year: WhatsApp Business and Google's RCS.

WhatsApp Business

Having reached 1.3 billion users as a P2P messaging app, WhatsApp launched WhatsApp Business for Android devices in select markets. It’s focused on small businesses that would benefit from this additional communication channel with their customers, similar to Facebook Messenger.

Time will tell if small companies adopt this new communication channel, and whether WhatsApp plans to offer a paid tool for large enterprises. However, one thing is certain: Given their massive user-base, WhatsApp has enough market leverage to affect the way companies communicate with their customers.

RCS (Rich Communication Service)

RCS is an initiative by Google, primarily designed for the Android ecosystem. From a technical perspective, it’s a set of communication standards that enable devices and networks to send richer content compared to SMS, which is limited to 160 characters and only text, without the need for a third-party app. For consumers, this means text messages that have a lot more features, like images, videos, and call-to-action buttons.

Similar to OTT platforms (e.g. WhatsApp, Viber,) RCS uses a data connection instead of a network operator's signaling systems, meaning that messages are sent and received via 3G, 4G, and WiFi. To reiterate, RCS can do this without requiring an app to be installed

This is why many have called RCS Google's answer to Apple's iMessage, except that it is designed to work on all mobile phones.

The bigger picture

Although both initiatives seem different, they are both participating in the same race --the race to become the interface through which we interact in the digital world.

WhatsApp may only be a chat app right now, but to understand its full potential, look at the transformation WeChat has undergone in China in the past year. What started as a chat app by Tencent is now used for everything from calling people to ordering food and hailing a ride in China.

Whether WhatsApp will follow a similar path and try to become the keyhole through which we interact with the world is hard to say. But with its massive user-base, the potential is certainly there.

Google's RCS, on the other hand, may also be viewed as simply messaging with upgraded functionality. However, the key to its potential lies in pairing its functionality with chatbots. Adding chatbot AI to the mix has the potential to create a layer of communication through which one could interact with any service, brand, or company in the world.

Combining the functionality and potential reach of RCS with chatbots allows any user of practically any phone to be able to communicate, consume rich content, make purchases, book a hotel, and so on. All of this through a messaging interface and not needing another app install.

Winners and losers

RCS still has a long way to go to get where it needs to be in terms of coverage. For RCS to really happen it needs an unprecedented coalition. Google, all major handset providers, and mobile network operators must agree on the technology and business models behind RCS.

Although this kind of consensus takes a lot of effort, RCS has been successful to some extent. Exactly a year after RCS was first announced, the first mobile operators have launched public betas.

Their motivation is quite clear. The proliferation WhatsApp, Viber, and other OTT platforms has corroded the P2P (person-to-person) messaging revenues of mobile operators. As WhatsApp and other platforms are on the verge of finding their value propositions to companies, mobile operators need to protect their A2P (application-to-person) messaging revenues, which have so far remained unaffected.

Given that RCS makes more progress in covering more people in 2018, it may very well prove to be very valuable for the operators.

What does this mean for my business?

As the industry heads towards consolidation, battling to become the single most used communication channel, it’s important to understand that reality is never uniform.

The world consists of companies and people not using the app most may be using. There will always be handsets without the ability to receive rich messages or connect to the internet.

Regardless of who the industry dubs the winner, effective communication will always mean being able to reach all your customers the way they want to be reached.

This means three things:

  • being able to use rich features where possible
  • being able to fall back to SMS
  • being able to determine between the two

This, in turn, means that the messaging platforms providing communication APIs must be ready for industry transformation, so our clients don’t have to.

Lauri Kinkar
2018-02-13 00:00:00 UTC