RCS messaging: still a zombie, but now wearing a suit

This post originally appeared on October 4 on my LinkedIn feed, which is now my main platform for both short posts and longer-form articles. It can be found here, along with the comment stream. Please follow / connect to me on LinkedIn, to receive regular updates (about 1-3 / week)

Yesterday I followed the Mobile Ecosystem Forum stream of its #RCSWorld conference, on #RCS #messaging, especially business messages. I thought it was time to get an update.
 
As regular followers know, I’m a long-time critic of RCS. I saw it announced in 2008, wrote reports & advised telco clients about its many problems in 2010-2013, called it a zombie tech in 2015 (“28 quarters later”) and have been sniping at it ever since, including at Google’s acquisition of Jibe and its attempt to turn it into Android’s equivalent of Apple #iMessage.
 
Some flaws have been addressed (it finally uses E2E encryption), while Google’s tightening control of its features has maybe fixed its “design by committee” paralysis and historic fragmentation. Google is now hosting the whole application for many MNOs, rather than telcos relying on (and paying for) in-network IMS integration, but with an implicit threat of end-running them if they don’t support the services to customers.

There's about 1.2bn phones with RCS active - mostly Google #Android but also about 200m in China. This has been driven by its adoption as the default messaging client on new phones, rather than by consumer download.

I didn't hear any stats on genuine active use - ie beyond just using it as a pseudo-#SMS/MMS app because it's the default. Numbers always seem to be monthly MAUs rather than meaningful DAUs. No anecdotes of teenagers who swapped from FB / WA / iMessage / WeChat / TikTok / whatever because RCS is cooler with better emojis, birthday greeting fireworks or cat-ear image filters.
 
To be fair, the conference name was misleading. Almost the entire event was about RCS Business Messaging (RBM) rather than personal or group messaging. It was about targeted marketing campaigns (that’s spam to most of us), customer interaction with so-called “brands”, multichannel whatnot, and blather about engagement and “digital” marketing

Apparently A2P revenues for SMS are flattening, but the addition of "rich" interactive in-messaging customer experience functions will reignite growth. One operator in the audience asked why the same forecasts have been shown (and not come true) for the past 4-5 years. Apparently it's too complex for most developers.

So the big innovation is "basic RCS" with 160 characters. SMS with a brand logo, a verification tick and read receipts. It's aiming at the #cPaaS market to get more devs/marketers onto the first rung & hope to catalyse more fancy use-cases later.
 
IMO this is why Apple isn’t going to support it anytime soon, despite Google's cringey social media exhortations. The notion RCS is a standard for P2P messaging is a smokescreen. It’s an ad & CRM platform, not an SMS replacement or default way to chat with friends. It’s not going to be the messaging equivalent of USB-C chargers & forced on Apple by the European Commission
 
In a nutshell, it’s still a zombie. But now it’s a zombie in a suit spamming you with ads and "engagement" while it eats your brain

 

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Mobile adblocking is overhyped & mostly unworkable

There's been a lot of fuss in recent weeks about the possibility of mobile operators blocking ads transiting cellular networks - or perhaps even charging advertisers for their delivery. I've written before that I think the idea is a non-starter (link), and I still believe that to to be the case

Three has announced a deal (link) with Shine that will (at a future date) implement network-level ad-blocking. The PR talks a good game about privacy and control, but is unfortunately divorced from reality in several important ways.

(Incidentally - I apologise. Mea culpa. I was the one who originally suggested that mobile ads' data-traffic could be charged to the advertisers - see this link. But that was 5 years ago, and the mobile world has moved on rather far since then)

Now to be fair, some mobile ads are very annoying and intrusive. I hate the ones that pop-up while scrolling through a website (or in-app) and take you straight to the appstore download page, as you swipe on the wrong bit of the screen. And yes, if I was limited to a very small data allowance, I'd be annoyed by the big chunks of data from the ads themselves, cookies and assorted other background marketing eating up my quota. There's a bunch of dodgy privacy-invading practices too, which I despise.

But.

There are multiple reasons why trying to fix these issues in the cellular network is the wrong answer:

• 50-90% of smartphone use, and probably 90-95% of tablet use, is over WiFi - and almost exclusively WiFi not provided by cellular operators, or transiting their core networks. Therefore people will still get ads on their phones most of the time. (And no, they won't "onload" to cellular just for the ad-free experience).
• The most fast-growing part of mobile advertising is in-app. And while some in-app traffic (eg rendered in browser-style webview pages) might be blockable, the "native" ads such as Facebook's in-timeline ads won't be. Facebook blends them in at the server, and encrypts it all. That's not going to change, apart from becoming ever more-sophisticated.
• Encryption is also being more widely used elsewhere. HTTPS, encrypted video streams, full-VPN clients and so forth. Some of this might be block-able, eg if it comes from easily-identified servers or IP addresses, but it's naive to think that isn't subject to a million workarounds
• People who really want ad-blocking are likely to do it themselves, either with an app or browser-capability, or perhaps even in the OS. That way they can block ads on WiFi too
• Any network-level solution is held hostage to future modifications in Android and iOS which offer work-around options for advertisers. That might not be a bad thing, in that it could cut down on some of the worse pop-up offenders or most-egregious "cookie monsters", but it won't reduce the overall amount of ads.
• Advertising and B2C engagement is changing anyway. Some is moving to apps, some is moving to ads/interactions in messaging (conversational commerce - see link here from my friends at STL Partners)
• It risks all manner of embarassing or legally-questionable side-effects. There will be false positives (eg blocking things that aren't ads) and false negatives (failing to blocks ads). What happens when Operator A blocks an ad from Operator B, and the competition authorities take a dim view? Or blocks a government ad for submitting tax returns on time, or a charity's disaster appeal? Put your PR and legal teams on danger-money....

The bottom line is that screaming headlines in stories like those from ZeroHedge (link) about "the risk to Internet companies' business models" are nonsense. Ironically, it's Google and Facebook's approach to advertising that is safe. Small online publications using other advertising channels may not be so lucky. I noticed this tweet referencing mobile advertising growth forecasts from Goldman Sachs (link) which seems to suggest that Wall St is sanguine about the adblocking "threat" and that rapid growth in revenues will continue.

Yes, there are some possible upsides here. Network-level cookie blocking is a possibility, and could help preserve privacy. (I already use a VPN service from F-Secure that anonymises my traffic, on mobile and WiFi). We could also see a proportion of the nastiest pop-up ads being squashed, which is also a good thing in most users' eyes. But that will just shift mobile advertising to other inventory types or channels. And maybe for some very low-end users, in markets with low-end data plans and a preponderance of web vs. app traffic, it could make a worthwhile difference.

But for everyone else, I think it's hugely overhyped. It's unlikely to stop more than single-digit % of overall data traffic per user. There's a huge set of "gotchas" for the idea that mobile network operators can make a meaningful difference, given WiFI and in-app ads. And the idea of actually charging advertisers for some sort of curated "personal advertising preference" system isn't going to come through this route either. (There's a whole separate post's worth of problems about that side of things, but it won't even get to that stage).

Yes, it makes for fun controversial headlines and might allow telcos to stick another metaphorical finger up at net-neutrality rules ("See? We're protecting consumers by fiddling with traffic non-consensually!"). But it's a sideshow, not something that will give Google sleepless nights.

Incidentally if you're reading this on a phone, here's a mobile advert: I do workshops, consulting projects and speaking engagements for operators, vendors and investors, on a variety of topics such as mobile networks, voice/video/UCaaS, and broader telecom futurism (link). I think of concepts like this, 5 years ahead, when they're stilll plausible. Drop me a line via information AT disruptive-analysis dot com, or via Twitter or LinkedIn. And good luck blocking this paragraph in the network without some really good AI and contextual analysis (I cover those technologies too).

Ad-blocking: No, mobile operators won't be blocking adverts & charging Google to restore them

The last few days have seen a bunch of articles (see here [paid], here, here)  suggesting that some mobile network operators - notably in Europe - are considering deploying ad-blocking capabilities in the network, and potentially charging companies such as Google for the right to "unblock" them via some sort of revenue-share agreement. A company called Shine has been mentioned as a possible vendor - I've spoken to the firm in the past and was unconvinced.

That said, the idea that mobile operators might block ads in their networks, or charge for the traffic they use, is not new.

In fact, I believe invented the concept myself, 4.5 years ago. (See this post  - sorry to anyone trying to patent the idea!). I wasn't entirely serious, but I could see it was a possible future.

Another thing I’ve said before is that telcos often “take 4 years to spot a good idea, 4 years to implement it & another 4 years to realise they’re too late”.

And in this case, it’s already too late. While ad-blocking might be effective for stopping in-browser ads, the technology will struggle with other formats like in-app ads (except where they are from an obvious source, or in a hybrid "webview" page in the app). It also struggles with various forms of “native” advertising embedded into content, such as video pre-roll ads or sponsored-content promotions. 

In addition, the landscape has changed massively since 2010, in terms of the way that ads are delivered, dataplan size and the large role that Google/Android and other advertising-centric companies have on the overall mobile landscape. 

There are also many possible responses and workarounds to “block the blockers” – see below. My view is that these experiments will not just fail - they could backfire spectacularly.

Regulatory & policy context

As context, there is also much more awareness – and much less tolerance – of networks “messing about” with Internet traffic in 2015 than 2010, although parallel concerns over privacy and the power of a few web players perhaps make ads “fair game” despite that.

There is also a growing war in Europe especially, against US-based Internet companies being waged by some of the more shrill “public policy” teams at major telcos. Telefonica is among those advancing the most egregious and hypocritical arguments – with its blog putting up strawman after strawman, which I sometimes try to counter in the comments.

This fight is tacitly supported by the new European Commissioners Ansip & Oettinger, who seem less capable of forming independent and coherent opinions about telecoms than their "steely" predecessor Kroes.

In a nutshell, some European telcos feel they can “get away with” harassing Google and to a lesser degree Apple and Facebook, and get air-cover from their national regulators and the European Commission. While the current trials might have the convenient excuse of “protecting users’ dataplans”, the reality is much more duplicitous – they are jealous that Google has out-innovated and out-maneouvred them, in a similar fashion to their rhetoric about “OTTs”, when they have been asleep at the communications wheel for 20 years.

Minimising the data burden on users

The point in my original post was that one of the few forms of non-neutrality that regulators and the public might tolerate is that of dealing with mobile adverts. Perhaps that traffic could be paid for by the advertisers and their channels. Advertising is widely disliked - as evidenced by the growing number of (mostly PC-based) browser users downloading ad-blocking software themselves. A recent German lawsuit by publishers was defeated, but we can expect additional action to follow if telcos try to take the same path - as well as worsened relationships between the two groups of companies.

While the morality of overall ad-blocking is dubious (it’s how useful free content is paid for), on mobile data-plans with low usage caps it may indeed be an onerous burden. Websites have a right to advertise at me, but don’t have a right to make me incur substantial extra costs for the “privilege” of being “advertised at”. Auto-playing video or audio adverts alongside static content are especially disproportionate. Various forms of pop-up or other intrusive formats are also occurring in mobile, as browsers get more capable – and there is justifiable resentment at some of these. 

Paying for ads’ data usage while roaming is especially awful, and is perhaps where the operators genuinely could offer user benefit and value by blocking them. Unsurprisingly, this will probably be the last use-case considered, given the perennial and profitable rip-off prices charged for data-roaming.

Sidenote: A compromise I’d suggest from the mobile advertising industry: ensure that ads take up no more than 10% of the total traffic needed for a given website or app when accessed over cellular networs. This would neutralise the bulk of the arguments being advanced here.

I actually believe that traffic for ads is one of the very few categories that might be viable as a source of “sponsored data” – although this will be in the form of discretionary promotions (eg bulky movie trailers downloaded for free) rather than some sort of across-the-board tollgate. I estimated the future market size of sponsored traffic for advertising in my recent report on new monetisation business models - it may reach $2bn by 2019 (see here). But the model suggested here – block ads unless the companies pay up or agree a revenue share – is the wrong one entirely.

Extortion only works against the weak.

Deploy counter-measures!

And in this case, the advertising machinery is anything but weak. The ridiculous thing about this concept is the ease with which such measures can be mitigated. I can think of 5-10 possible workarounds straight away. The most obvious group of approaches is to blend apps with content so they cannot be teased-apart, and another set involves using methods to avoid the filters in some way. There are plenty of other possibilities too.

Encryption of content is the most obvious. It is already widespread in mobile, and is growing fast – in some networks, more than 50% is encrypted. There are multiple styles, ranging from SSL built-in to HTTPS traffic, SRTP for WebRTC traffic, through to using compression and proxy servers. Some of these are still theoretically “blockable” based on IP address, but the risk of false positives increases hugely. The inclusion of Google’s SPDY technology into the HTTP2 standard has pretty much ensured this is a one-way ratchet for web traffic in future. 

Belated efforts by the telco industry such as the “Open Web Alliance” to limit crypto usage or propose “trusted proxies” for traffic management are already failing and, ironically, are undermined by “untrustworthy” actions such as this.

Google is already offering a VPN option in its new Fi service, intended to secure traffic over 3^rd-party WiFi. It doesn’t take much imagination to see that this could become a ubiquitous feature for Chrome – or even Android OS – over any connection. All the operator would see would be a single stream of encrypted traffic to and from Mountain View or a local Google node – perhaps even inside its own network.

The other obvious fly in the ointment is WiFi. Most smartphone users already spend 50-90% connected to 3^rd-party WiFi access in homes, offices, cafes, hotels and other places. Advertising will work normally in those places. Ignore the “seamless” carrier-WiFi hype – mobile operators’ own hotspots are a tiny fraction of the total in most countries, and will stay that way. We won’t see fixed ISPs and every WiFi operator pursuing a similar strategy of ad-blocking either – there is no rationale for it. This means that (a) Google and other advertisers will further assist users in finding WiFi, perhaps even subsidising it; and (b) Tools will be built into OS’s or 3^rd-party SDKs to allow developers and advertisers to download and pre-cache advertising via WiFi, serving it up locally as-needed.

Indeed, we would likely see various new ad-related APIs, or delivery services, being rolled out in Android and iOS, plus browsers, to help work around the blockages. These developments will not have come as a surprise to many, and it is foolish to believe that countermeasures are not already being worked on. 

Of course, Fi also means that Google now has a very good view of the wholesale costs of mobile data provision, and this will impact the ridiculous "revenue share" concept still further. At absolute worse-case, it will be asked to pay fees much lower than the consumers' retail price of mobile data. There will also be no justification for "double-charging" consumers for the same data paid for by advertisers.

Actions have consequences

The mobile industry is playing with fire here. The countermeasures available to Google, Facebook and others are powerful. There is a very significant risk that rather than increasing revenues, that instead these moves will actually decrease revenues, as well as increase costs and have assorted other unintended consequences – especially more encryption, and more use of 3^rd-party WiFi. 

Some of the ads that may get blocked will no doubt cause embarrassment or even legal action – I can’t imagine competition authorities being amused if TelcoA blocks ads for TelcoB, for example. There’s also a strong risk that TelcoA blocks some of its own advertising, given the typical distant and disconnected silos within a large operator. That should make for some lively boardroom discussions. The publishers vs. telcos fight won't be pretty either.

I also envision the system lacking “discrimination”. Unless there is a laborious "white list" process, it will probably block ads for charity appeals, or stop government-paid ads for voting registration or impending tax-return deadlines. That should cause much amusement in policy circles, I’m sure. There will inevitably be a host of “false positives” and “false negatives”, as you can expect companies to use the same distribution channels and “signatures” for both ads and “legitimate” content.

The biggest irony is that all this will just encourage continued advancement of native apps and OS’s vs. more-powerful browsers – the exact opposite of what many telcos would like to see happen. In-app advertising will inevitable be more block-proof than web-based versions.

It’s even possible that Google will start tiering or limiting its own services on “hostile” networks, to encourage users to churn to “friendly” ones. And in extremis you could even imagine MNOs being made to pay for subscribers’ access to certain apps or services. Most people would more happily switch telco, than switch Internet ecosystem.

My prediction is that these ad-blocking services will never see the light of day - and if they do sneak out, will cause untold amounts of pain. The idea the MNOs will get a signficant revenue-share of a business to which they add zero value is laughable.

Overall, trying to extort protection money “in case something nasty happens to your ads” is a silly and unnecessary risk. Never mind the old cliché about bringing a knife to a gunfight – the mobile industry is trying to act like a racketeer here, but is only packing a rusty spoon in its belt.

Venue-owners don't want "seamless" WiFi

One of the regular myths put forward by the cellular industry is that WiFi is a natural, integrated part of the mobile world, and that we will all soon be "seamlessly" connecting to the "best" network in any specific location.

It's hard to tell if this is arrogance or simply ignorance.

As a concept, it positions the cellular industry as the most important and influential stakeholder in WiFi, especially when it comes to smartphones. This is very much untrue.

Even leaving aside the better fit of WiFi with fixed/cable telcos than mobile, one only needs look at the growing array of locations deploying WiFi for their guests / visitors / customers. Often, for all its possible awkwardness, the "seam" (eg a splash page or logon screen) is an important property. It used to capture user data, display ads or information, or otherwise "engage" with people who would otherwise have little direct interaction with that location or brand.

They have no interest in restricting access to people using a specific mobile operator, nor phones with particular technologies, or operator-customised connection manager apps. Many may have particular terms and conditions that they wish users to agree to, before providing access. 

So airlines and airports provide access to frequent flyers, or to a page with departure times/gates and retailers' details. Some locations force users to watch a video before getting access. Some link into loyalty schemes, or collect email addresses, or ask for a social-network login or "like". Cafes and other locations also obviously need to service non-cellular users connecting laptops - and probably don't want every phone auto-connecting as they'll suffer congestion. Often, WiFi is intended for private work or personal web-access, not "offload" from cellular.

As an example, belowis a picture of a London bus, painted in the colours of some new flavours of Magnum ice-cream. It also has a logo for free WiFi. According to this article in the Grocer marketing magazine, it is part of an integrated advertising strategy. "The buses will use free WiFi to encourage consumers to view branded content recommending things to do in the capital depending on whether they are feeling playful or sophisticated".
 

 
While it's possible that the in-bus system is provided by a telecom firm to Transport for London, and presumably it uses LTE backhaul, that is totally separate from the purpose of the WiFi access given to consumers. It's for advertising, not offload. And presumably TfL is looking to monetise it as part of package, along with the garish black/pink stickers on the bus.

The same is true of other venues. They want to offer WiFi as a differentiator, or as a visible value-add. If it fades into the background, it becomes neither. In addition, as a user there may be very good reasons to want to use a different WiFi provider than your cellular operator - especially if it routes traffic through a core network which imposes policies you wish to avoid (eg blocking VoIP, or applying charges for certain content). There might be times you want frictionless access (eg one-click), but the problem with seamless access is that it may come with price, usability, privacy or security limitations or compromises. 

The phrase "always best connected" is duplicitous - it generally means "best" from the point of view of the operator, not the user, advertiser, venue-owner, device-vendor or application provider. Although there might be some workable use-cases of ANDSF, PassPoint, Hotspot 2.0, I-WLAN and assorted other automated WiFi connection standards, they need very careful assessment as often they will be more harmful than helpful.

I think there is scope for regulators to look at "WiFi Neutrality" laws, preventing people from being forced (or even differentially persuaded) towards specific operators' preferred networks - especially if those networks are also non-neutral in terms of policy management. Also, independent WiFi is an important competitive component in consolidating telecom markets - governments should encourage its role as a de facto method for keeping mobile data charges at reasonable levels. (See this post on partial competition) 

My view is that the only people who want to instigate "seamless" WiFi are those lacking the imagination or commercial capability to monetise the "seam". And increasingly, users will have multiple ways to get online with WiFi at any given location, and may wish to choose based on circumstance and brand affiliation - or perhaps the chance of a free ice-cream.