Wednesday, June 12, 2024

    RCS: the second coming?

    RCS has been long on promise, but has so far failed to ignite. However, that could all be set to change now that three US telcos are working together on making it happen – but could its future lie in B2B, wonders Paul Skeldon?

    According to a new market research report “Rich Communication Services (RCS) Market by Application (Advertising Campaign, Content Delivery, and Integrated Solutions), End-User (Consumers and Enterprises), Enterprise Size, Enterprise Vertical, and Region – Global Forecast to 2024″, published by MarketsandMarkets, the RCS market size is projected to grow from $4.5 billion in 2019 to $10.6 billion by 2024, at a CAGR of 18.9% from 2019 to 2024.

    Separately, the GSMA is predicting that there will be 363 million active RCS users by 2021, generating some $74 billion in revenues. With major growth drivers for the market including the growing expenditures on digital marketing across verticals, is RCS finally about to explode onto handsets worldwide?

    AT&T, Sprint, T-Mobile and Verizon have formed the Cross-Carrier Messaging Initiative in a bid to make a strong case for the Rich Communications Services (RCS) standard yet again. Can RCS garner mainstream adoption?

    Shashank Venkat , from Cerillion certainly thinks this is the time. “After a decade of stop-starts, the GSMA’s Rich Communications Services (RCS) standard is trying to make another comeback,” he says in a blog. “However, this time around the push for RCS is coming from leading US telcos such as AT&T, Sprint, T-Mobile and Verizon as part of their new Cross-Carrier Messaging Initiative.”

    Venkat adds: “RCS can be seen as a successor to the humble text message. It brings in capabilities such as messages with advanced features including high-resolution images, receipts, notifications and lots more. The big US carriers want to roll it out in 2020 on Android with the hope that it can bring the ‘next-generation of messaging’ to users. Interestingly, tech giants Google and Samsung have their own RCS implementations in place as well.”

    mGage has also undertaken research into what RCS is likely to do this year and found that, with a concerted effort being made to fully rollout RCS Business Messaging by Google and Mobile Network Operators to android users, it is estimated that there will be more than 62 million people using this system by the end of 2020. This will create a large market that businesses can target with their promotions and messaging.

    “With the arrival of RCS, comes a convenient and appealing channel that has an additional layer of trust amongst consumers, as each organisation that uses RCS like charities, banks and retailers must be verified so when a message is received it is guaranteed to be safe and the origin is known,” said Nick Millward, Vice President Europe at mGage. “The reliability and adaptability of the RCS system gives brands a variety of use-cases and applications for their customer service strategy. For instance, an airline could send a reminder via RCS to check in for a flight and at the same time provide the full check-in experience complete with boarding pass, flight updates and terminal maps on demand.”

    But is the user case for RCS as clear cut as it first appeared? According to MarketsandMarkets, advertising campaigns via digital marketing is the prominent approach adopted by enterprises to attract customers. Sharing rich media contents have enabled end-users to engage greatly with the enterprises to take benefits of the services.

    Enterprises being the prominent stakeholders for RCS in the market, advertising campaign application is expected to maintain dominance throughout the forecast period.

    The enterprises throughout verticals are expected to have a significant dependency on SMS for digital marketing. Deployment of RCS messaging platforms to share media-rich content amongst the end-users is expected to bring growing instances of customer engagements.


    What hold RCS back?

    RCS has been on the agenda since 2015, but is still to catch light, not least in the public’s mind. There are several reasons for this, all of which still need to be addressed.

    Firstly, there isn’t the interconnectedness of operators needed globally to make this work. US carriers teaming up to jointly work on it will help, but globally there is still much to do.

    There is also the issue of Apple. Apple’s iMessage still doesn’t support RCS and there is no indication as when it, if ever, it might. With iPhones accounting for 20% of global smartphones – 50% in the US – that is potentially a massive disruptor to RCS deployment.

    The third hurdle is pricing – and how operators can monetise RCS. There is something of a blank canvas when it comes to cost and there is still a big debate as to whether enterprises need to be charged per message or per session. This may seem something of an esoteric debate, but it profoundly impacts business models – not least when costing out campaigns that also run on SMS: just what is the ROI on doing it with RCS and is it worth the effort?

    For MNOs, the question is even more pressing. How can they effectively monetise RCS and make it sustainable? While RCS promises to recoup some of the A2P messaging business lost to OTTs, it must do so at a price that not only pays for itself but also compensates for any SMS A2P messaging lost to the newer, more evolved format.

    Should it be just a B2B tool?

    The big question, however, around RCS is whether consumers actually want it. In a world where we are all on WhatsApp and Telegram, as well as Facebook messenger and even SMS, is there really a role to play for RCS in the consumer market?

    Venkat isn’t sure. “Specialist messaging apps such as WhatsApp and Telegram have made life extremely easy for users with a range of ‘rich’ messaging features,” he says. “In theory, the features available on RCS are already available to users on these popular messaging platforms. So, even if RCS brings in a seamless and interoperable messaging experience among carriers, it simply cannot beat the scale of WhatsApp which already caters for millions of users around the world.”

    Instead, it is starting to look like RCS might be a messaging and engagement tool better suited to B2B applications.

    “With automated Application-to-Person (A2P) messaging already popular, RCS will open up a lot more options for operators,” ponders Venkat. “The big advantage with carriers supporting RCS is that businesses will not need to know whether someone has a particular app installed to send their message.”

    In fact, Venkat believes, RCS offers a great opportunity for telcos to retain A2P messaging revenues.

    “While tech upstarts have tried disrupting B2B messaging, no player really stands out in the broader business messaging sphere where SMS is still prevalent. Telcos can therefore drive RCS adoption in B2B messaging if they make a strong enough push for it, considering that competitors such as WhatsApp are still in the early phases of the B2B play.”


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