Evolution or Revolution? RCS history, current state, and market outlook

Edee Carey2021-03-02

RCS – Rich Communication Services – is slated to become the new SMS and MMS. In fact, it’s even been called SMS 2.0 as in the future, it will offer similar universality. Before explaining how and why to use it, we’ll share more about the history and where the market is headed.

RCS is a digital messaging channel primarily for brand and consumer communications. It involves rich media and superb end user engagement within the messaging app – meaning no need to download anything. We’re kicking off a series on rich communication services starting with the background and market outlook of this channel. Stay tuned for more!

History of RCS

RCS isn’t that new of a concept. It was actually started back in 2007 when operators decided they needed to compete with OTT channels. OTT stands for “over the top” because they are channels that are in addition to – or “on top” of – basic messaging channels. This new channel was meant to keep carrier-based messaging relevant in the age of OTT apps.

In 2008, GSMA, an association of mobile operators worldwide, took over the development of RCS. With such a large group of operators, there were many initiatives in the following years. They tried launching in one market but never made it to worldwide coverage.

Then, in 2015 Google decided to compete with Apple iMessage, so it moved into the operator space and teamed up with the GSMA. Google acquired Jibe Mobile, a leading RCS services provider, to help bring RCS to Android OS. This led to the GMSA publishing the first globally agreed upon standard for RCS and its specifications called Universal Profile in 2016.

After 2016, Google offered the solution for free in P2P cases – so people could reach friends across the world. This requires an agreement between the operators in each country and Google. If an agreement is not there, then RCS is not available. For A2P instances, RCS Business Messaging (RBM) was created.

To ameliorate this problem Google announced in 2019 that RCS would be launched in the Google Messages app and hosted by Google instead of the user’s carrier. RBM support would still require an agreement between end users’ operators and Google.

Finally, in 2020, Samsung decided to support Google chat (RCS) on their devices, which had previously only supported operator driven RCS.

Market Outlook for RCS

As of 2019, 66% of consumers want rich communication services. According to a MobileSquared study, consumer research showed that after email and phone calls, business messaging (SMS and RCS) was the most preferred channel for brand and customer communication in 2020.

Business messaging for RCS is forecasted to explode. MobileSquared predicts the channel will become a 1 billion user platform by the end of 2021 and by 2028, 3.7 billion of the 4.89 billion Android devices globally will be RCS users. This means brands will be able to reach 61% of all smartphone users via RCS – more than double what Google or Facebook can reach today.* Penetration depends on several factors, including how many enabled users there are and the number of enabled operators in countries that offer rich communication services.

Furthermore, it’s predicted that “brands will spend $52.5 billion on RCS by 2028, equaling approximately 16% of total digital ad spend today” – and for good reason.* It’s already proven to be a huge success. Campaigns for McDonald’s and Disney in South Africa generated an average ROI of about 207% and an average read rate of approximately 72.4%.*

What about iPhone users?

RCS is currently for Android users, with Apple’s equivalent being iMessage. Apple has also developed Apple Business Chat (ABC) for iPhones (and iPads), which is comparable to RCS Business Messaging. It has features like in-app payments for purchases, calendar synchronization for scheduling, and automated responses for quick questions. Similar to WhatsApp, customers start the conversation. It is possible Apple will do something with RCS through ABC or another type of interaction, though it might depend on the market.

Now that we’ve piqued your interest in this channel, check back later for our next post on on this channel. In the second part of the series, you’ll learn more about the benefits of RCS – and some challenges. Already interested? Get in touch!

* “RCS: The Game Changer the Industry has been waiting for” published November 2020 by MobileSquared, in association with OutThere Media