MWC: Launch of RCSe services by Telefonica, Vodafone and Orange in Spain

By Dario Talmesio

Mobile operators need to go short if they want to go along with their customers. RCSe can rejoin the broken links between operators and their customers, at a cost.

RCSe is a bet operators can’t afford to lose. Unlike the many battles for inclusion in which operators try to enter vertical sectors and adjacent market, RCSe is a battle for relevance.

WhatsApp and Facebook Messenger and other OTT services are set to take almost 4% of their voice and messaging revenues from the mobile operators in 2012. While the operators can afford to lose this money, they can’t afford to lose the relationship they have with their customers.

RCSe is a way for operators to emulate these services and convince customers to stay with them, or rejoin them.
RCSe (Join) is a big gamble. It will succeed only if the business model is inspired by the Internet model where a lot of the good stuff is free. Operators will have to give away more that they are used to.

If operators want RCSe to be successful, they need to offer what the OTT players offer – a compelling user experience with a wow factor is a must, but zero price is also important. This is what people get from OTT players, something cool that costs nothing.
If operators want RCSe to become a mass-market proposition, as they should, then they need to have freemium business models where a lot of what they give comes for free with no catches.

Operators need to know that self-cannibalization of existing revenues is both painful and necessary if they want to keep the relationship with their customers in the Internet era; any attempt to position RCSe as a premium service will inevitably fail in competitive markets. At this stage of mobile Internet maturity, interoperability is not strong enough as a differentiator.

During 2012, there will be many launches of RCSe services in the majority of large European countries. Pricing will be the single most critical element of the service.

Operators will also have to spread their bets as the success of RCEs is far from certain. Offering Internet-like communication services will also have to be done as a pure OTT service as well as in partnership with OTT players.