Rich Communications Services (RCS), the oft maligned messaging and multimedia application, has been making something of a comeback and is expected to gather even more momentum throughout 2017. Once seen as the operators' competitive response to OTT messaging apps such as WhatsApp, Line, and WeChat, RCS is now the successor technology to SMS and MMS services and a vast improvement on the default messaging functions installed on handsets. RCS underpins new revenue generating services that will leverage the messaging app through enhanced functionality such as the ability to share high quality images, organize group chats, make video calls, and share location data.
Critical Mass
Critical mass is always a key driver for industry-wide adoption, so Google's interest in RCS is highly significant. In September 2015, the tech behemoth acquired Jibe Mobile, the messaging start-up developing the RCS platform for next-generation applications. Google then adopted RCS features for Google Messenger 2.0 and announced in November 2016 that it had partnered with Sprint. "As part of the arrangement, select LG and Nexus phone owners already with Sprint will see their default SMS app switch over to Messenger through an app update," reported Android Authority. Google's Pixel devices are also included. With Google pushing RCS, the aim is clearly to install a universal messaging platform that straddles Android devices and networks, making future developments and additional functionality easy to design and then deploy. In addition to Sprint, there has been a pretty aggressive roll out of RCS-based services by other providers and in other geographic markets. In the U.S., AT&T and T-Mobile (Advanced Messaging) have also launched services, as have Vodafone in the United Kingdom, Spain, Germany, Portugal and Albania, and Claro in several major South American markets.
Most recently, Samsung announced plans to expand RCS messaging services directly from their devices, without the need for an additional app, allowing mobile network operators to quickly launch the service and avoid building their own network infrastructure.
As the table to the right shows, as of October 31, 2016, RCS-based services were up and running in most major markets. On top of that, Canada launched services for Rogers and Fido at the end of 2016.
Adopting a Universal Standard
In order to further support the mass adoption of RCS, the GSMA is linking the technology with its Universal Profile (UP), which the GSMA describes as "an industry-agreed common set of features and technical enablers for Advanced Communications. The Universal Profile has been developed to deliver a richer, common user experience globally, and simplify both product development and operator deployment of Advanced Messaging."
GSMA states that "47 Mobile Network Operators covering a subscriber base of 4.7 billion people globally, 11 manufacturers and 2 OS providers, have committed to supporting a single, standard implementation of the Universal Profile to accelerate the availability Advanced Communications."
A Base for New Revenue Streams
While messaging no longer represents an important revenue stream for operators, the messaging app is where smartphone users spend the most time and where they are increasingly sharing files and content and initiating other service such as voice calls and Web searches. The messaging app is now an important business tool.
The chatbot market in particular represents a significant revenue opportunity as more enterprise customers seek to deliver a more personalized customer experience, deploying chatbots effectively as "gatekeepers," fielding initial customer contact and routing interactions efficiently to the relevant part of the business. In December 2016, a TMR report valued the global chatbot market at $113 million in 2015, and predicted it would expand reach $994.5 million by the end of 2024.
RCS is also seeing traction across other user groups. For example, users can now initiate gaming sessions within messaging apps. We can also expect to see developments and integration relating to personal health and fitness, travel, shopping (both online and in-store), and more. For network operators, RCS is not the service that will provide these services, but rather it will be the medium upon which these new, revenue-generating applications will reside.
Finally, ease of integration is another factor that plays in RCS's favor. As VoLTE services achieve further global penetration, RCS can be added to the network with relatively little effort. This is due to the fact that it resides on top of the same core network as VoLTE, namely an IP Multimedia Subsystem or IMS. The one area that has not yet been opened up to RCS is Apple's iOS. RCS enables services that are, in essence, similar to iMessage, and thus far there has been no indication from Apple that they plan to cater to RCS, or adopt RCS outright into the iPhone. However, that's not to say it would not be pushed through for Apps in a carrier update. We shall just have to keep an eye on this space as it progresses.
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