SMS 2.0: Why operators need to fend off Apple and Facebook

A host of new mobile messaging services have arisen to challenge the primacy of SMS. Apple, Research in Motion, Facebook and Google have all launched services that mimic yet greatly expand on the capabilities of carrier text and multimedia messaging. While services like Apple’s iMessage, BlackBerry Messenger or Facebook Messenger have their limitations compared to the pervasiveness of SMS, they have a singular huge advantage: they’re free, relying on smart-or feature phone’s IP connection instead of per-message or subscription charges.

A lot of news reports have emerged in recent weeks predicting the demise of carrier SMS in favor of these new cheaper and more feature-rich IP messaging services. The operators haven’t helped their cause much either as they’ve effectively been raising their SMS rates. Earlier this month AT&T eliminated its tiered SMS bundles, offering only an unlimited messaging plan for $20 a month. Everyone else has to pay 20 to 30 cents per message (CP: AT&T to ‘streamline’ texting plans by essentially doubling fees). A smartphone user subscribing to one of AT&T’s 200-MB data plans practically would be able to make unlimited use or IP messaging and social media platforms, while still paying $5 less a month than he would by subscribing to AT&T’s unlimited text plan.

That’s not to say SMS isn’t worth paying a premium for. SMS has advantages IP services simply can’t match, the biggest of which is ubiquity. Ever phone comes embedded with an SMS client and is capable of receiving a text message from any other device. Facebook may have the world’s largest social media subscriber base, but not every mobile subscriber has a Facebook Messenger client on their device, nor does every mobile subscriber have a data plan (CP: Facebook launches messenger app targeting RIM). Any iPhone subscriber can reach out to any other iPhone subscriber through iMessage, just as any BlackBerry owner can reach out to fellow BlackBerry owners through BBM, but those services have no reach to devices beyond their OS (CP: Apple isn’t going to kill SMS, but maybe Google can).

SMS isn’t just ubiquitous, it’s highly reliable. IP services rely on the quality of the IP connection so as signal strength decreases or the network becomes congested, chat and instant messaging services lose their umbilical cords to the Internet. SMS, however, runs over the dedicated signaling channel that predominates every network from the lowliest GSM cell to an LTE macro cluster. While the rest of data network is overflowing its brims, leading to data connection failures, that SMS message will get through. As RootMetrics CEO Bill Moore demonstrated in a contributed column today, data rates fluctuate dramatically across even operator’s urban networks and data failure rates are still high (CP: In search of true consistent 4G).

“The things that makes SMS so reliable is it's always on and it works on every phone,” said Anantha Ramu, North American vice president of engineering and principle architect for Acision, a SMS equipment vendor. “It will be a very long time before every phone has a Google messaging client and a reliable nationwide IP connection.”

But there’s no question that SMS needs an overhaul. Since the industry worked out interoperability issues, SMS has remained static. The only innovation to really emerge was MMS, but due to still persistent transcoding issues and general clunkiness, multimedia messaging has been a limited success. Otherwise, the industry seems to have adopted the stance that SMS is perfect as is. Meanwhile, Apple, Google, RIM and Facebook have been drawing from the IM, e-mail and chat technologies of the PC world to create much more feature-rich messaging client. Apple’s iMessage supports read-receipt, group messaging, presence and location features and is unhindered by the text and file-size constraints of SMS and MMS.

But Acision’s Ramu made an important distinction: just because operators haven’t implemented these kinds of features into their SMS platforms, doesn’t mean they’re incapable. SMS vendors like Acision have been innovating on SMS behind the scenes, waiting for operators to see a business case for their technology, Ramu said. There are reams of new technologies, an SMS 2.0 if you will, that operators have begun to explore now that they’re dominance of the mobile messaging market is threatened.

Acision has built features like return-receipt, out-of-coverage notifications and message storage and back up into its next-generation SMS center platforms. Group messaging and reply-all features eliminate the single peer-to-single peer limitations of traditional SMS. New software allows SMS integration to other IM and chat accounts. And static clients have been active, beaming presence and location data over the same signaling channel that carriers the message payload itself.

If these features are implemented, operators will not only be able to match the features offered by IP messaging services, they’ll be able to offer those features with the reliability of expected in SMS, Ramu said. With the exception of large files like video, any SMS enhancement still makes use of the dedicated signaling channel, meaning it will be protected from the ever-fluctuating nature of the mobile IP network, Ramu said.

These features could easily be added to operators' SMS network infrastructure today—and in some cases already have been—and as many of these capabilities have been standardized, operators would not have to worry about the interoperability problems that plagued the U.S. operators’ first implementation of SMS. The problem is the client. In order to support these features, phones will need rich communications suite (RCS) clients.

While some smartphone platforms could be upgraded with firmware updates, the majority of devices could only gain access to SMS 2.0 capabilities through attrition. Vendors will have to support those clients in their new devices and phone turn-over would then get those clients into customers’ hands. Operators don’t have the advantage of an Apple or a RIM, which can upgrade the capabilities of their entire install base through an OS update.

But what operators do have is backward compatibility, said Charles Landry, senior vice president of messaging for Syniverse, another SMS platform vendor. Even if operators have to gradually introduce rich SMS clients to their subscribers, they’ll always be assured of a baseline interoperability: The presence and location data may not arrive, the sender may not get his return receipt, but the core 160-character message will always be sent. That’s more than a closed Apple messaging platform can claim. If the device on the other end of the message doesn’t have an iPhone or iPad, then the message doesn’t get sent. In fact, the sender doesn’t even have the option to try—at least not with iMessage.

That’s why Landry believes that SMS and IP messaging platforms will eventually find a common ground on which they can co-exist. “Free” services like BBM, iMessage, Google Chat and Facebook Messenger will continue to gain traction because of their price and their features, but as their users move outside of those self-contained communities, SMS will be the common vehicle that all mobile users will share.

“If you look at the mobile messaging and RCS space, you could make the argument that you have a stack of value-added communications services,” Landry said. “The broad foot of that stack would be interoperable SMS. As you rise through the stack the services become more feature-rich, but also more proprietary. Video chat and video share would be at the top.”

The big question then is how far up that stack can operator SMS climb. Will SMS remain the platform of last resort, utilized for simple texting when all other mobile peer-to-peer methods fail? Or will new features allow SMS to move into the middle, offering competing features to those of the IP services? If operators do plan to take that first step, they better take it soon.