Derek: Hello everyone, Derek Johnson with tatango.com.
I'm here at the Interop Technologies booth with Josh from Interop.
And I asked him to sit down with me because yesterday, the GSMA had a seminar on RCS business
messaging.
And we couldn't film there, but Josh actually was there.
They sponsored it.
And you presented, right?
Josh: Yes.
Yeah, I presented at the event.
It was a great event.
Derek: Okay.
So everybody on YouTube is wondering what happened at this event.
So run through everything that happened at this event.
Josh: Sure.
You know, one of the things I'd say would be very telling is, one is the room was completely
full.
They had an annex and an overflow that was full of people.
So that shows me that whether it be operator from an industry ecosystem, there's a ton
of interest this year on RCS, which has been great.
You know, we've seen it from whether it'd be operators we're engaging with to, you know,
the traditional RFI, RFQ, all those types of things.
You know, 2019 is going to be the year for RCS.
Derek: And I guess before we get into it, since we're at the Interop Technologies booth,
what is Interop Technologies?
Josh: Sure.
So Interop has been involved in messaging from our inception.
So we, at our core, are a messaging vendor.
If you know much about kind of that core technology, you know, SMSC, MMSC.
The first product that I developed at Interop was actually an A2P gateway where we connected
to, you know, aggregated the aggregators, and connected to many mobile operators.
So for us, it was a natural extension.
And we've been involved in RCS all the way back when it was RCS and it was join, and
everyone was launching the join pins and everybody walking around with them.
We stayed in there, continued to develop the platform to where we provide infrastructure
for mobile operators.
So we provide the IMS core, the RCS application servers, the chat bot platform to manage and
develop all these chat bots, as well as interconnect hubs to interconnect to other mobile operators.
Derek: So for my mother that's watching, essentially kinda what I heard is for smaller carriers
that maybe don't wanna do all the heavy lifting of initiating building RCS, you're kind of
providing an out of the box solution for them to add RCS to their network.
Josh: I would say yes.
So most of your smaller operators, not only even small, many are moving to the cloud.
So, you know, we do sell to tier one operators around the globe.
So if they're looking for on-premise solutions, where they run and manage it, or manage across
many different properties, all the way to, like you're saying, a smaller operator that
says, "Hey, I don't have the technical expertise.
I don't have the time," or they're looking for more flexible business models, you know,
we handle all those types of operators.
Derek: So the next phase is RCS.
So explain what happened during this, I guess, seminar.
How long was it?
And walk us through kind of the steps and the interesting takeaways from this seminar.
Josh: Sure.
Well, it's couple hours seminar.
You know, the GSMA with Jill Cooper, she did a great job kind of explaining, like, RCS
is here, you know, leveraging Vodafone's network to show how RCS can be used to simplify your
life.
So it was from, you know, getting your airline ticket automatically sent within your native
messaging to making changes to your seats, and them sending you notifications to, you
know, you're working with Virgin Trains and, "Sorry, your train's going to be late," so
you're notified.
So that alleviates some of that customer care and service frustration or attention, to then
them using that as an opportunity say, "Oh, but we upgraded your seat.
And come pick up this free muffin," you know what I mean?
I mean, they're Virgin, they think about customer care customer service.
So it's great to see how they're solving real problems through RCS.
And then things like, "Well, I'm gonna go ahead and download my music playlist," and
have that all in there, booking hotels and travel.
And in the end of that, it's how RCS can simplify your life, you know?
It was pretty telling at the end where they had, you know, a screen of 20 different apps,
right?
And, you know, think about what you'd be doing to have to go back and forth to do all those
changes and all those things.
If you didn't have the app, you'd have to download the app.
But with RCS, it was just there.
It was all within that native messaging client.
We also heard some great things from AccuWeather, how they're looking at, you know, RCS and
different use cases.
You know, I was joking around.
You know, it's one thing to check the weather forecast, but to be able to chat with the
weather, you know, that's pretty cool.
But they're using it for very personalized things to say, "Hey, you know, it's gonna
be..." you know, they mentioned Barcelona, "Hey, it's gonna be snowing there.
Make sure you're prepared."
So it's beyond just, "Hey, the weather is going to be 42."
It's like they're starting to have a more personal relationship with their subscriber
base using something like RCS.
It's great to see Pecha from the Deutsche Telekom there.
You know, he's one of the leaders and pioneers here.
And we'd love to see the investment and the activity from big operator groups like T-Mobile,
and what they're doing and moving.
And, you know, when they move, industries move.
So that's really great to see that activity there.
And then there are some other use cases which are pretty cool around serving the underbank
through RCS.
You know, being able to do micropayments and other things that RCS could enable.
But what I spoke upon on RCS was a couple of things.
One was bridging the gap.
Today, there are 4.7 billion SMS users.
It's the number one communications application that there is in the world.
You know, you got WhatsApp, and we talk a lot about the OTTs.
But they're about 1.5 half billion.
You know, Messaging is bigger than Flix, Telephony is bigger than email, it's bigger than the
active monthly YouTube users.
So it's huge.
So operators have to bridge that gap and start to convert those SMS users to RCS.
When you create that audience, you create the value.
You create the value and the reach for the brand.
So these use cases are great.
But until we get that subscriber base there, yeah, there's not that value.
The brands are gonna put their mobile spend where the eyeballs are.
We know that.
We see that in mobile marketing and advertising.
So it's about converting your subscribers.
You have to move.
So mobile operators.
The time to move is now.
You've got WhatsApp business, you got Apple business chat.
So you see these other big players and how they see, you know, the revenue opportunity
around business messaging.
You know, Mobile-Squared, who you mentioned you're gonna be talking to as well, you know,
had some great numbers about, you know, it's about an $18 billion to $20 billion industry
today.
But that's gonna grow and double to over $40 billion in the next five years.
So is that gonna be operating revenue, or is that gonna start to go to some of these
OTT providers.
So it's essential as an industry, has a mobile operator that they do move forward with RCS
in business messaging.
Derek: Now, everybody watching this video, there's always kind of the elephant in the
room.
And that is always Apple.
Are they going to adopt it?
Was there any announcement from Apple or any indication from the GSMA what is happening
with Apple?
Josh: Well, you know, we did hear that they are meeting with Apple here.
So, you know, you're getting the key operators, these large group operators, you know, operators
where there's a large Apple penetration, you know?
If you look at some markets and, you know, Germany as an example, or you look in the
U.S. where there's 45% or so iOS users, it's very important for Apple in those markets,
you know?
So there's a lot of drivers in regions.
You know, SMS does have a shelf life.
At some point, you know, it's gonna be sunsetted.
And Apple needs some interoperability between RCS or Android, I would say.
And that would be RCS.
You know, GSMA and, you know, the 5G, they've stated that RCS is the messaging technology
for 5G, which we thought was huge.
You know, we're pushing it, we're yelling about it, but are we putting it into standards?
You know, maybe we learn from our mistakes in 4G, where it should have been RCS, and
now in 5G it is.
So that's great.
So, you know, nothing as far as an announcement.
But there's a lot of pressure on Apple to have something like RCS to interoperate with
Android messages and Samsung, which is all based upon RCS.
Derek: And what about carriers, carrier adoption?
Were there any carrier announcements?
Because I know people were interested in Verizon maybe coming out and saying they're supporting
something or rolling out something.
Was there any carrier announcements?
Josh: Well, what we actually saw from Verizon at the beginning of the year was that they
did announce on the Pixel devices that they were going to be launching RCS.
And at the last messaging labs in New Jersey, they mentioned that their goal was to have
RCS live, Q1, and then A2P live by summertime.
So I don't know if those dates have slipped or if they're still marching towards that.
But I mean, for them to publicly announce that, you know, that puts a lot of pressure
on the rest of that region, and really to the globe to say, "Hey, all the tier ones
in the U.S. are launching, you know, major operators," you know.
And then to see the use cases that are coming out of the U.S. is really creating a lot of
momentum and a lot of excitement in the space.
Derek: Another elephant in the room is pricing.
I know, Vodafone has put some pricing out there.
Did we hear anything about pricing models or the actual price of RCS?
Did they even touch on that at that meeting?
Josh: They haven't touched on it.
You know, as we go to these different events, you know, as they're hosted by GSMA, you know,
they have all the legal ease and the things they need to adhere too.
But, you know, what we're hearing from analysts or, you know, when you look at the reports,
you know, is that it's going to have a premium over SMS, it's conversational.
So there's gonna be more usage.
But we also don't want to...When you talk to the brands, you know, they say, "I want
to use a technology and platform that allows me to have a conversation, engage with my
subscribers.
I don't wanna be to the point where it's like, oh, I gotta kill the conversation because
I reached a certain number of messages.
There's no longer an ROI there."
So I think we have to be smart and intelligent.
And I think they're doing the right thing and they're taking it slow, they're understanding
the usage.
You know, this is completely new compared to SMS, which is really just a one-way communication.
This is now instant messaging, it's now communication.
There's files, there's location, so it's a much richer experience.
And we do need to take that data, realize what the value is, and then charge appropriately
to not inhibit growth.
Derek: Sounds like a lot went on.
Was there anything else at the meeting that our YouTube subscribers need to know?
Josh: You know, I would say, as mobile operators look to RCS, they need to look at it in the
long...what is the long road.
You know, if this is gonna be my platform for not just A2P, or the...it's not SMS Plus,
it truly can become a platform of innovation.
You know, once you start working into, you know, adding carrier billing to us, another
carrier can start having transactions upon it.
Once you start looking to...you know, RCS gives you the location of the subscriber,
it gives you the availability, the handset that you're using, this is very valuable information.
You can create some very unique use cases around it.
You know, think about integrating things like voice and video.
So it truly could become this platform where operators start to expose their assets or
network through APIs to create new use cases.
You know, we've been talking about that for a long time, but I really think RCS helps
gets them there.
So they need to look at the long-term vision as to making an investment today for a platform
innovation that allows me to climb the value stack, climb the ecosystem, and really create,
what I would say, is a next generation of value added services.
Derek: Now, one last question.
Everybody has been saying the last 10 years, this is the year of RCS.
This is the year.
That was another theme, I think, the GSMA lab, which was on Sunday.
Do you think this is the year, is it next year, is it 2023?
Where do you see kind of the tipping point happening?
And then what is going to trigger that tipping point?
And let's focus on the United States and then kind of outside the United States.
Josh: Sure.
So I do believe this is the year for RCS, you know?
I know that I've been on video or quoted saying, "It's been the year of RCS," but I may have
said it in some presentations before, you know, and why is that.
I think, you know, North America is why I'm saying that.
You know, you have AT&T who has about 25, if I'm not mistaken, bots live on their network.
You have Sprint, you have T-Mobile, you have Verizon who, you know, has made commitments
to launch.
So that's going to create from a user basis, you know, you have Android devices, all of
them from Samsung supporting RCS, you know, shipping on any of the other OEMs with Google
Android messages from a client standpoint.
So that creates the handsets because before, that was been the problem of RCS.
How do you get it there?
So we've solved those problems.
Operators are moving, that's another big problem.
But this is gonna be the year where we start to build the base.
Is this the year that all those revenues come in?
And, you know, we reach, you know, our golden ticket, if you will?
No It's gonna be the year that we start to build a base, you know, from different analysts,
you know, everywhere from 1 billion users this time next year, to 800 million users
this time next year.
So I think if we, at the end of, you know, this time next year, we're talking and there's
one billion active users, you know, at that point we're Facebook Messenger from that standpoint.
At that point, we're nearing WhatsApp with 1.5 billion.
And to me, that is a tipping point.
Once you reach the one billion, you've got mass adoption, you've got market.
Now Apple is listening, they say, "Hey, there's something here.
I've gotta do something.
I've gotta support that from that standpoint," one billion users is a massive market.
Derek: Okay.
So you've heard it here, Josh at Interop Technologies.
He claims this is the year, 2019, for RCS messaging and business messaging.
We are here at Interop Technologies at their booth here at the GSMA Mobile World Congress
2019.
And he gave a great recap of what happened inside that very small room yesterday, talking
about business RCS messaging.