3rd June 2019
Mobilesquared’s Gavin Patterson looks at why alternative pricing models are now being explored for RCS
Business messaging is a healthy and growing industry – due in most part to the availability of a single universal channel operating on a fairly simple business model. That channel is SMS, with mobile operators charging a termination rate for the delivery of a single SMS message.
However, just as the evolution of OTTs led to a fragmentation of P2P messaging, so growth in business messaging has seen different channels (SMS, RCS Business Messaging (RBM), Apple Business Chat (ABC), WeChat, LINE, Viber, KakaoTalk, WhatsApp for Business and Facebook Messenger, etc) all now competing for various elements of a richer brand and business spend.
Moreover, the fragmentation of business messaging runs much deeper than merely the choice of channel – with each channel offering different reach, in different markets, on different mobile devices, for different types of enterprise communication meaning, with different levels of richness, meaning that an omni-channel approach is now almost unavoidable if a brand or business wants to communicate with its entire customer base.
Although RBM reach is growing – from only five networks across four countries at the beginning of 2019 up to 52 by end 2019 – the RCS ecosystem is still struggling to find the best way to monetize business messaging.
At present, commercial launches of RBM have been priced in the same way as A2P SMS, that is to say on a per event pricing model, primarily because billing mechanisms cannot handle anything else.
The aim of a chat-based pricing model where brands and businesses are billed for the number of ‘conversations’ held with customers is a long way off and, when RBM does start to mature and billing mechanisms advance, mobile operators will look to expand the commercial model beyond simple SMS-like rate cards to include images, videos, rich cards and carousels.
Not surprising, therefore, that concern is growing within the RCS ecosystem that RBM pricing is currently not working as hoped, could become too complex, and could become a major deterrent for brands and businesses with alternative choices in an omni-channel world.
Much of the appeal of SMS is its simplicity in pricing, and many players within the RCS ecosystem are now coming to believe that RBM must either follow a similarly simplistic model for it to become a mainstream channel or look to alternative pricing models.
Options to monetize the P2P base – such as the introduction of a ‘cost’ model for P2P RCS pricing, targeting sponsored content sharing and selling access to the P2P user base – all now being explored as well as alternative A2P models such as revenue share, advertising and search.
For more information on P2P RCS monetization strategies please see our latest report the RCS Monetization Report: P2P,the first in a series of reports looking at the various options available to the RCS ecosystem to make money out of RCS and RCS Business Messaging.