With the marginalization of bearer services, there will be a growing dependence on Value-added Service (VAS) applications for initially top line revenue growth (as data growth tapers off and margins are squeezed) and then for margin growth as bearer services become a cost-plus commodity.
By definition, VAS applications must add value, and not cannibalize existing/core services, unless clearly favorable. In the case of VoIP, incumbent operators must embrace the fact that bearer services are becoming commoditized, and therefore margins are going down, causing the carriers to invest in other areas. The areas that they must invest include integration of VAS with core services.
There is a noticeable impact any time a new VAS of any type (content, commerce, communications or application) is deployed as often it displaces or otherwise marginalizes existing applications. An excellent case in point is Rich Communications Suite (RCS).
Based on the GSMA’s RCS specifications, RCS combines several existing services including voice and video communications, messaging, and content sharing, into an IP-based communications experience that is compatible across devices and networks. RCS is an upgrade that marks the transition of messaging and voice capabilities from Circuit Switched technology to an all-IP world. RCS and Voice over Long Term Evolution (VoLTE) share the same IP Multimedia Subsystem (IMS) investment and leverage the same IMS capabilities.
For consumers, it has the potential to combine voice and SMS with instant messaging or chat, live video sharing and file transfer across all devices and networks. Main features of RCS are:
- Enhanced Phonebook: Service capabilities and enhanced contacts information such as presence and service discovery.
- Enhanced Messaging: Enables a large variety of messaging options including chat, emoticons, location share and file sharing.
- Enriched Calls: Enables multimedia content sharing during a voice call, video call and video sharing
This is a rather dramatic change from both of the previous models:
- Silo features/applications such as voice, data/video, and SMS that work completely independently on carrier networks and do not interact
- End-users utilizing so called Over-the-Top (OTT) applications (such as texting) and effectively by-passing the carrier (e.g. only using network operator data on a smartphone).
From the carrier’s perspective, RCS is positioned to have a huge impact on several applications/features including voice, video, and messaging as they will be merged together in terms of usage, which will impact various network elements and systems.
For one, RCS uses pure IP infrastructure (VoIP and SMS over IP), so there is a different architecture to deal with from OSS/BSS perspective. This is in contrast with RCS, as it depends on implementation and operation of both LTE and IMS.
A major challenge to this type of integration is Web Real-time Communications (WebRTC), a technology that supports browser-to-browser applications for voice calling, video chat, and P2P file sharing without the need of either internal or external plugins.
WebRTC has a few key capabilities:
- Streaming video, audio and data communication
- Coordinate signalling communication to report errors
- Exchange information
To use the WebRTC applications WebRTC implements the following APIs:
- MediaStream: access to data streams (i.e., user’s camera and microphone)
- RTCPeerConnection: Uses the audio and video calling and bandwidth management.
- RTCDataChannel: Uses P2P communications
A concern for carriers is that WebRTC will assist their competitors (notably OTT providers) in delivering services to mobile subscribers. Over-the-Top (OTT) applications are those that are provided via the Internet in which only a data connection is required. The wireless carrier is not directly involved and only recognized indirect revenue due to data usage. OTT players and applications have grown to become a significant threat to core services for network operators, most notably voice and messaging. Carriers do not discriminate what is being carried over the data channel and are satisfied (from a data service revenue perspective) to just sign up as many data users as possible.