Chinese Operators Launch 5G-Enabled Rich Communication Service

Chinese Operators Launch 5G-Enabled Rich Communication Service

China Mobile, China Unicom and China Telecom have introduced a 5G-enabled messaging service, called rich communication service (RCS). The three operators published a white paper on the service, which specifies the technical details necessary for smartphone makers to support it, according to a news report. RCS, which is designed to compete with existing OTT messaging services such as WeChat, will offer not only messaging but photos, video and audio, all through the standard chat window of a mobile phone.

Huawei Technologies has announced that it will support the new 5G messaging service starting June.

In March, the three major Chinese operators announced plans to invest nearly CNY 180 billion (US $25.5 billion) on 5G development in 2020. They also plan to deploy 550,000 5G base stations this year.

China Unicom has already built more than 10,000 5G base stations in Beijing, achieving continuous outdoor coverage. The country as a whole has already deployed more than 160,000 5G base stations covering 50 cities.

Tarifica’s Take

We have long reported on the wars between mobile operators and the independent OTT entities—especially messaging apps—that have been taking business away from them for years. For the most part, operators have had to accept the inevitable and concede much to the OTTs—for example, zero-rating data for them and even co-branding. Some operators have tried the opposite approach, creating products that emulate the messaging apps, but they have not, for the most part, proved particularly successful.

Now, three giant operators in a mega-market have joined forces to leverage the emerging 5G technology to create a type of messaging that the existing OTT competitors will not be able to match, for technological reasons alone. By sharing and deploying their 5G networks, the Chinese MNOs believe they will be able to implement a rich messaging system that will make WeChat, China’s ubiquitous messaging app (owned by internet and entertainment giant Tencent) obsolete.

While the rich features of RCS are indeed likely to appeal to many customers, there are certain barriers to its acceptance. For one thing, new devices will be necessary to support the 5G signal, so the operators will need to use their scale and scope to place as many of the new devices (by Huawei or whatever other manufacturers can supply them in sufficient quantity) in order to secure broad-based uptake.

Another issue is the fact that WeChat is already deeply embedded in China’s daily life. In addition to messaging, financial functions such as electronic payments and even asset management take place through the platform, which has over 1.1 billion user accounts. To crack that, the Chinese MNO giants would have to offer a great deal and persuade customers quickly that RCS is better than WeChat. Bells and whistles are nice, but to really break WeChat’s hold, RCS would have to conclusively demonstrate 5G’s power in the messaging sphere. And for many users, the high speed and bandwidth of 5G may not really be necessary for what they hope to get out of a messaging app.