Unified Communications Featured Article

Users Are Abandoning Traditional Text and Voice for Messengers

December 27, 2016
By Special Guest
Alexander Vityaz, CEO, Corezoid -

Telecom operators, even those based in smaller countries worldwide, have enjoyed robust and sustained financial performance through the last few decades. While that success is to be lauded, it has also served as a path to complacency, which has led the telecoms to ignore making vital strategic investments in innovation. In a recent interview, Vladimir Yevtushenkov, co-owner of MTS (the largest mobile operator in Russia, with more than 107 million subscribers) said, “Telecoms companies all over the world missed the boat with the appearance of messengers, because they didn’t invest in the development of new technologies.”

As a result of this loss of focus, communications competence has become divided into two parts: communication went to messengers, while network support came to rest on the shoulders of telecom operators – including all the burden of local troubles, regulatory compliance and hardware issues.

Billions of people all over the world are now using messengers to make calls and exchange messages, rather than using traditional SMS-based texting and voice plans. This amounts to a direct attack on the telecoms’ bottom line, as the companies depend on voice and text usage for a great deal of their revenue. Earlier this year, Facebook CEO Mark Zuckerberg acknowledged the situation that telecoms find themselves in, painting the relationship between telecom networks and messaging apps like Facebook’s own WhatsApp and Messsenger as symbiotic, suggesting, “Telecom carriers simply need to shift to business models that make money from data transmission instead of voice or text messages.”

This is certainly one approach that some telecoms have embraced, recognizing the tough matchup in competing with Silicon Valley on IT competency, and instead shifting focus to their core offerings and their roles as local network players. At the same time, the numbers for traditional telecom offerings look bad, with SMS texting usage diminishing and the already dominant messenger space projecting continued steep growth. Factors in the success of messengers include that many are free to use and feature superior quality communication experiences, handling new picture and video media formats with much more alacrity than SMS.

However, not all telecoms have signaled their surrender when it comes to continuing to develop communication technology. Some telecoms are proceeding with their own messenger apps, such as AT&T with its Messages app, and Vodaphone’s Message+ service. These services often include certain advantages based on the telecoms’ traditional competency with communication; for example, Vodaphone’s messenger service can automatically transmit a message using SMS through the cellphone network if data connectivity isn’t available. Of the telecoms pursuing this route, some are taking advantage of their size by “zero-rating” their own messenger offerings, not charging users for associated data usage in order to entice users to their in-house product. Another avenue for telecoms is the development of Rich Communication Services, or RCS, designed as a more capable successor to SMS that is built to compete with modern messengers.

When it comes to direct monetization of messengers, however, success thus far has only been realized around the periphery – emoji and avatar sales, gift cards to specific stores, etc. The Holy Grail for telecoms to pursue with the full strength of their messenger technology and business relationships is to enable effective mobile commerce. No messenger in the world has yet transformed into a full-fledged mobile wallet that allows clients to conveniently talk to brands and make purchases.

What might the architecture of a solution that enables telecom operators to seize this opportunity look like? It would take a messenger with an integrated monetization model - a business messenger – to allow customers to easily communicate with sellers and payments systems. The technology behind this ecosystem should include a messenger, a mobile wallet and a “digital core” responsible for the work of core processes and bots to facilitate shopping and transactions.

While messengers fight for market share and search for ways of monetization, telecom operators are facing a closing window of opportunity to coordinate their efforts and become players in the messenger and mobile commerce markets. Implementation of such a vision is perhaps the last chance for modern telecom operators to escape the same fate as the previous generation of telecom industry heavyweights (e.g. dial-up operators and broadband access providers), which saw their offerings commoditized and missed the critical moment to adapt to the new reality.

Edited by Alicia Young