Rich Communication Services (RCS) have been “just around the corner” now for almost a decade. Despite a lot of hype about the possibilities of a rich-text, graphics enabled, and interactable messaging format, a global rollout of RCS has proven stubbornly unattainable. With RCS campaigns already deployed in the USA and UK, and recent moves towards the creation and actual adoption of a new iteration of the RCS Universal Profile, it looks like 2019 will be the year RCS finally becomes a viable, mainstream messaging channel.
But is this just more hype? Here we take a realistic, in-depth look at the opportunities and challenges presented by the emerging RCS market.
Is there a demand for RCS?
For years it has been difficult to get enterprises to use RCS services – for good reason. RCS’ lack of reach and standardization made the potential audience prohibitively small. However recent developments have led to an increase in interest from enterprise customers. Industry researchers ROCCO recently found that a number of enterprises had plans to launch RCS campaigns in 2019, indicating that a market exists for those who can supply this demand.
What is particularly important is the success of recent campaigns. The GSMA is keen to point to the results of Subway’s recent campaign, which saw “more than 5 million users” and “enjoyed an 85% retention rate, and more than double the conversions achieved on their most successful SMS campaign.” Subway’s Chief Digital Officer, Carissa Ganelli, is quoted as being similarly enthusiastic: “The consumers are there – they’re waiting for it, and they’re already using it.”
This isn’t all, of course. In the US customers can order from Boston Pizza without using a browser. In the UK, Ocado customers can arrange delivery or change their order, receive reminders, and more. “This” argues the GSMA “is one of the great advantages of RCS – what might previously have been spread over SMS, web browser accounts, and separately downloaded apps is now pulled together in a single user-friendly interface.” Meanwhile, also in the UK, ITV and Virgin Trains have had their own RCS trials. The Mobile Ecosystem Forum quotes the latter’s CIO, John Sullivan: “If you look at text messaging it’s been great but its 25 years old, and it’s about time we had an upgrade: RCS for us is the perfect upgrade.”
That might be the best way to think of it: not an over-hyped revolution, but an upgrade. Like SMS, RCS is “native” to the user’s phone. Text messaging has been part of mobile phone use since the 1990s, and all smartphones come with a built-in SMS app, which (at least with more up-to-date handsets and operating systems) also handles RCS. That’s its strength. The experience is convenient, familiar, and doesn’t require downloading and setting up an app – all whilst providing the features and capabilities of most OTT apps. It’s these enhancements, particularly the ability to enter into more complex interactions between brand and customer, that these campaigns are seeking to explore and exploit.
What these trials do is demonstrate that RCS, as a marketing and engagement tool, is ready to go. Use-cases exist and are proven to the clients’ satisfaction. (The GSMA hosts a gallery of them here.) Even the technology seems ready: enough subscribers have access to RCS to make deployment viable. Theoretically.
Is the world prepared for RCS?
There is demand for RCS campaigns. However, when we move to the question of RCS infrastructure and start looking at the details of those “recent developments” we alluded to above, things get a little more complicated. Not catastrophic, but complicated.
In another MEF interview, Xconnect’s Tim Ward points out that: “The technology is actually quite ready – it’s in our phones – but you feel from an end user perspective it’s still in stealth mode… from a business perspective there are only a few companies that have grasped it whole-heartedly – and that’s the next thing that has to happen, stepping over the parapet and the combination of it becoming day to day and something everybody’s going to use, and giving the enterprise and A2P world the opportunity to take advantage of that.
“The technology’s ready, the players are ready and it is an adoption curve now, which is more about the marketing and awareness than it is about anything else…”
It is where we are on the adoption curve that might prove tricky. The total number of operators offering RCS, by a recent count, is 74, spread across 55 countries. That’s good, but still geographically limited. It is important to note that existing campaigns, and the networks over which they are delivered, are primarily found in Asia, Europe, and the USA; RCS does not yet have global coverage.
Even in the USA, where RCS coverage is good, implementation is uneven. Only two MNOs and Google’s MVNO implement the full Universal Profile – the standard devised by the GSMA to facilitate inter-operator networking. Other operators implement their own versions of RCS or “advanced messaging” and consequently A2P RCS messaging is more complicated, and P2P RCS only works between users on the same network.
Getting Everyone Synchronized
Enterprises might like and want the features RCS offers, but they’re hindered by what one commentary calls “carriers and manufacturers … great job of fumbling its usefulness.” This was the story for years, with multiple implementations and a “Universal” Profile which included multiple options and specifications. Google – through its 2015 acquisition of Jibe – has since made a major push in rectifying this. Most notably, they gave RCS native support on Android, making the technology available on a vast array of modern smartphones (helped in no small part by Samsung’s willingness to engage with the technology in their drive to make the Galaxy series an iPhone contender).
In doing so they helped ensure a new, unified profile which simplified the technical specifications involved in supporting RCS. The Chat service – Google-led but not, technically, a Google application – implements this profile and enables its deployment on a handset’s native messaging app. An upcoming iteration of Android, Android Q, contains APIs that will make it easier for 3rd party apps to use RCS messaging (though this will still depend on “carrier support”).
Google is offering various solutions, from acting as hub/aggregator to hosting RCS hardware and software on behalf of the networks. This understandably worries some operators. They would rather have full control of their network and not have Google eating into their margins as it holds onto the reins of RCS infrastructure. There’s also a question, for EU operators, about GDPR compliance.
Google is not the only RCS provider, however, nor is it the only voice in the GSMA’s RCS initiatives which effectively represent industry voices in matters such as the Universal Profile. Vodafone have their own (UP compliant) solution for their operator group, coordinated with Google’s to allow interoperability. Within Japan, where all the local operators have launched RCS, there is complete network interoperability. Meanwhile, there are alternative independent vendors for RCS equipment, software, and solutions, including Samsung (in support of its Galaxy handsets), and GMS is exploring the best way to offer its own solutions.
There are three other factors affecting a global rollout of RCS.
One is that RCS works over IP channels – if you don’t have any internet connectivity (either network or wi-fi) RCS won’t work. In this case, however, SMS can be used as a fallback. There’s a loss of some functionality, but it doesn’t spell disaster.
The second is trickier – Apple is still on the fence when it comes to RCS. Their iMessage platform doesn’t currently support RCS and it is unclear when it will. Since the iPhone accounts for 20% of the global handset market (closer to 50% in North America), that compromises interoperability and complicates A2P use-cases. Operators could potentially offer their own apps on the iStore, but this negates much of the inherent convenience of RCS.
Finally, there is a question of pricing. Whilst those enterprises exploring A2P RCS essentially have a “blank canvas”, more cautious parties might be wondering how cost-effective their own campaigns would be in this new format. Whilst existing campaigns can act as prototypes in this regard, as well as in terms of proof-of-concept, actual results and pricing structures remain opaque. There are still questions as to whether it is better to have a per message or per session cost, for example. And for some hypothetical pricing structures, the technology to properly ensure billing is lacking.
For MNOs, the question is even more pressing. How are they to effectively monetize RCS so that it proves sustainable? Whilst 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.
2019 and Beyond
“The thing that distinguishes GMS from most other service providers … is that we keep the interests of the MNOs at the forefront of what we do – thus we will monitor developments in RCS and, in view of these developments, will ensure that we properly support the efforts of MNOs to drive the revenue opportunities resulting and assist them in their competitive struggles with the OTT providers.” – Robert Rose, GMS Chief Strategy Officer
RCS presents some real opportunities. Enterprises and end-users are interested, and recent deployments have achieved exciting results. But there exist real difficulties, particularly in getting the RCS ecosystem functioning smoothly. Many operators simply aren’t ready to serve RCS to their subscribers, and the various sides need to sit down and hammer out effective and fair pricing models.
2019 might not be the year RCS becomes mainstream, but as enterprises start seeing the benefits and operators begin to build their infrastructure, or borrow it from Google, it could be the year we make significant progress on that adoption curve. The ecosystem is coming together, if a little slower than some would prefer; those who move quickly will be best placed to define the landscape. GMS is ready to help its partners enter the RCS ecosystem. We are actively engaged with the world of RCS development. Furthermore, with our experience in firewalling and monetizing SMS messaging, we are well placed to evolve these services along with RCS, ensuring you full control over messaging channels from the very start.