Mobile World Congress in Barcelona this week highlighted the rapid rise of instant messaging services such as WhatsApp, Pinger, BlackBerry Messenger (BBM) and Facebook Messenger—apps that enable users to send messages and multimedia over data or Wi‑Fi networks.
WhatsApp, a cross‑platform subscription service that supports real‑time conversations, group chats and rich media, is currently handling around 2 billion messages per day, and other messaging platforms are also experiencing strong growth.
That success has come at the expense of traditional SMS, a long-standing revenue source for mobile operators. SMS became nearly as ubiquitous as voice calling because it was simple to provide and used minimal network capacity.
The cost to operators of these over‑the‑top (OTT) services is significant: industry analyst Ovum estimates the market slice lost to OTT messaging reached approximately $14 billion last year, underlining the threat these services pose to operator revenues.
Ovum warns that unless operators take decisive action, the trend will continue to erode their position. To remain relevant and financially viable, operators must modernize legacy services and adapt their offerings for today’s market.
This challenge compounds other pressures operators face: regulatory burdens in many regions, the capital expense of upgrading networks to 4G and beyond, and the erosion of direct relationships with end users as OTT players capture messaging revenue and customer attention. As Google chairman Eric Schmidt remarked at Mobile World Congress, “It’s a tough time to be an operator.”
At the same event, which concluded on Thursday, the GSMA—the global association of mobile operators—unveiled a new Rich Communication Services (RCS) initiative intended to counteract the OTT threat. The scheme aims to embed new messaging and internet‑based voice capabilities directly into smartphones, allowing operators to offer advanced communication features to subscribers without forcing them into separate apps.
Branded as Joyn, the service is slated to roll out this year in France, Germany, Italy and South Korea. Joyn seeks to leverage operators’ strengths while addressing some weaknesses of OTT messaging apps. Supporters argue Joyn will provide text‑message‑style interoperability across networks, rather than limiting communication to users of a single application.
Whether Joyn succeeds will depend on consumer adoption. Integrating the technology directly into the handset offers an advantage: when done properly, the experience can be seamless and tied to the phone’s native contacts and calling functions, rather than operating as a standalone app.
Joyn has already attracted backing from many major operators and a broad range of device and equipment manufacturers, including HTC, Huawei, LG, Nokia, RIM, Samsung, Sony and ZTE.
“Since Rich Communications will be fully integrated in devices, there is no need for our customers to download or install anything,” said René Obermann, chief executive of Deutsche Telekom. “Ease of use is thus ensured and it will just work. We are looking forward to offering new services like text chat, file and live video sharing during a call to our customers soon.”
Despite the potential, Joyn still needs to prove its value in the market. Important questions remain about pricing and monetization—details that will influence whether the initiative can deliver the rapid turnaround operators need.
The service is already available in beta for a limited set of Vodafone users in Spain, but broader availability depends on the software being preinstalled on new handsets, a process that takes time. To bridge that gap, GSMA recognizes it must offer Joyn as a downloadable app in the short term and has released a trial Android version.
Meanwhile, nimble OTT providers like WhatsApp and Pinger are likely to continue expanding and iterating quickly. The competition for innovation is intense, and Joyn faces an uphill battle to match the pace and breadth of features OTT players deliver.
“Operators must remain open to partnering with app developers, sharing end‑user data where appropriate, and enabling integration with users’ social connections,” said Neha Dharia, a consumer analyst at Ovum.
“The most important factor, however, will be cooperation between telcos,” she added. “They are no longer competing just among themselves; they must work together to meet the challenge posed by major internet players.”
For more information on OTT and value‑added service strategies, industry professionals will discuss these topics further at Telecoms Tech World on 4–5 June.