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    Messaging trends in Europe


    Continuing our series of guest blog articles on the future of mobile messaging, Ludovic Patraud, Head of Product management, Jinny Software, argues that the introduction of IMS, SIP and RCS will offer mobile operators a path to the monetisation of new messaging-based sevices.

    Patraud’s piece begins here:

    In with the new
    As next-generation IP Multimedia Subsystem (IMS) networks roll out at an increasing rate, there is an expectation across Europe that this will trigger the introduction of next-generation messaging services – Converged IP Messaging – which will be a noticeable disruption to current legacy messaging communication services.

    In response, network vendors are pushing hard to sell their full IMS-capable networks. The current industry initiative – the RCS or Rich Communication Suite – to deliver an Enriched Mobile Communication & Messaging Experience using 3G and IMS standards, is being led by the OMA and 3GPP. RCS is currently in a trial phase in Europe, North America and Japan.

    This could be one of the killer apps for IMS networks; the initiative is following an aggressive roadmap with RCS Release 4 now being finalised. A combination of mobile handset-based clients and IMS-network-based capabilities are expected to support the new communication services.

    This new development is accelerating most notably in North America where it is being driven by LTE deployments pushed aggressively by CDMA operators. In Europe, however, MNOs are not rushing as fast to deliver LTE or new mobile broadband networks. The GSM/UMTS roadmap is strong here with HSPA+ sufficient for the next few years, but that’s not to say that LTE won’t catch up. Core network IMS deployments are progressing in Europe, providing economies of scale and efficiencies to traditional fixed-line operators. This enables them to provide unified telecom services in a similar way to triple-play and quad-play operators.

    The mobile broadband push and the growth in LTE and IMS networks have raised the stakes. Vendors are now moving ahead to deploy full capabilities including support for RCS. We are moving towards what could be an entirely new mobile communications ecosystem. One key question, however, is how to integrate this evolution in user services with highly successful existing legacy services, such as SMS?

    Clearly, there is a need to offer bridging capabilities for messaging, with SIP playing a major part and the approach here would be to deploy a ‘Bridging IP-Short Messaging Gateway’, which is currently defined by 3GPP.

    In 2011 and beyond, it is expected that the way forward will be lead by US MNOs to roll out these bridges between legacy and new communications services, with RCS playing a significant role. Operators will also focus their attentions on supporting and delivering the fullest range of mobile social networking experiences within these new network capabilities, and this will further drive the success of messaging and enriched mobile communications.

    Around 100 companies are formally participating in RCS, including handset manufacturers, infrastructure providers and software vendors. Others are following the initiative closely, ensuring such things as newly developed messaging platforms are fully compatible with future developments.

    On the legacy side

    In volume terms, considerable growth is still expected from SMS traffic in Europe, and is projected to be equivalent to 8% CAGR until 2015; SMS is still expected to account for 35% of non-voice revenues at that time. This is largely due to the way ‘unlimited’ packages are being offered by MNOs and the double digit yearly growth of enterprise messaging and machine-to-machine solutions. With more competition from MVNOs and a fierce fight for ARPU, deriving more revenue from messaging and SMS, including aggressive time-to-market strategies, is top priority. This is particularly important in view of the continuing fall in SMS prices. Legacy architecture, however, is no longer the most efficient way of supporting this continually growing traffic. 

    Opening up to next-generation services

    Operators need to open their networks to 3rd Party applications if next-generation messaging and communication services are to be realised optimally. This is essential if they are to replicate an APP-Store type of success inside the messaging domain. The monetisation of mobile advertising as a new stream of revenues highlights the need for such a move, and RCS Release 4, with its focus on API, goes some way down the path to enable this.

    In that context, below are key elements for an operator to deliver next-generation messaging successfully:
    •    Reduced running costs to deliver messages
    •    Service-oriented architecture facilitating rapid launch and the creation of new revenue-generating services, factoring subscriber personalisation for enhanced segmentation and greater stickiness
    •    Advanced security mechanisms to tackle spam and fraud
    •    Future-proof design to support Converged IMS services and RCS efficiently.

    One area of concern is that messaging continues to be a key route for virus transmission.  Messaging and SMS malware-related issues are expected to grow and new platforms need to be resilient to such attacks. With the reduced fragmentation of handset OS, however, the irony is that networks and devices are actually becoming more exposed to viruses and damage until a suitable solution can be found. With the mobile OS market consolidating, an Android 2.2 virus, for example, would impact a large percentage of the smart phones in use, and with more entry-level smart phones connecting to the networks the greater the potential problem from malware.

    MMS – time to reconsider

    One final messaging trend to consider is the continued relegation of MMS in Europe to a back seat despite its huge success in North America and the APAC. European operators should seriously be looking again at this medium, especially in relation to rich media mobile advertising. Return rates for an MMS campaign, for example, are three to five times higher than an SMS campaign, which, in turn, is 100 to 500 times higher than an email campaign. MMS-based services also benefit from their usage increasing virally due to the peer-to-peer effect, providing good returns for little investment, further bolstered by Europe’s high MMS-capable handset penetration.

    Old experience – new domain

    Mobile messaging still has considerable room for growth as the mobile ecosystem evolves. With the right new services and infrastructure to support them, mobile operators can expect subscribers to show the same hunger to communicate through messaging as they have until now.

    But aging platforms will still need replacing. Thankfully, innovative vendors are already achieving success in this space across Western and Eastern Europe and, as a result, MNOs have a very real chance of experiencing old-world messaging revenues in the new and evolving mobile ecosystem.