MESSAGING & ENGAGEMENT
ANALYSIS
What Apple’s RCS embrace means for messaging With Apple announcing on 16 November 2023 that it was, after all, going to support Rich Communications Service (RCS) messaging the world of business messaging changed dramatically. But what does that look like? We asked Molly Gatford, Research Analyst at Juniper Research, for her thoughts With Apple announcing on 16 November 2023 that it was, after all, going to support Rich Communications Service (RCS) messaging the world of business messaging changed dramatically. But what does that look like? We asked Molly Gatford, Research Analyst at Juniper Research, for her thoughts On the 16th of November, Apple announced that it would support the universal profile for RCS (Rich Communication
Services) messaging. RCS can be defined as an operator-led messaging protocol, which allows for the sending of rich media and improved functionality over SMS. Support for RCS is expected to be available on iPhones following a software update starting in 2024. This follows new legislation in the EU, the DMA (Digital Markets Act), coming into effect in March 2024, which is designed to harmonise platform regulation across the EU.
A snapshot of RCS Business Messaging and where it fits in the market RCS Business Messaging is considered the next step in the evolution of SMS. It’s used for both P2P and A2P communication and combines the reach of SMS through MNOs with rich-messaging features for elevated customer experiences, writes Infobip. For businesses the messaging platform offers a range of enhancements over SMS, including verified sender status, custom branded messages, rich media – including text, images, GIFs, audio, video, documents and location – and offers suggested actions, as well as carousels. So how does it stack up against the other rich business messaging platforms out there – SMS, RCS and Apple Messages for Business (AMB)? SMS
RCS
AMB
Available on all devices?
Yes
Android, soon Only iOS on iOS devices devices
Type of messaging
P2P, A2P, P2A P2P,A2P,P2A
P2P, P2A
Rich media
No
Yes
Yes
Branding
No
Yes
Yes
Character limit
160
160+
160+
File sharing
No
Yes
Yes
Internet connection No
Yes
Yes Table courtesy of Infobip
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However, iMessage is still expected to be available to consumers for communication and is still a more secure and privacy-friendly messaging channel. RCS will therefore exist separately from iMessage, while SMS and MMS will be used as fallback when RCS is not available. However, it is expected that enterprises will be able to use RBM (RCS Business Messaging) via iOS devices towards the end of 2024. The RCS standard is supported by Google and is currently available on Android devices. At MEF’s RCS World in 2023, Google announced that there were 1.2 billion monthly active RCS users, and this number is expected to increase substantially following Apple’s announcement.
BETTER FOR ENTERPRISES
Apple’s intention to support RCS on its range of iPhones greatly increases the value proposition of RCS to enterprises. This is because the total addressable user base will increase substantially, and enterprises will now be able to communicate with a large proportion of their customers. SMS prices continue to increase, with AIT (Artificially Inflated Traffic) fraud being a key contributing factor to this. As a result, the demand for SMS is plateauing, with enterprises expected to lose out on revenue to OTT players. Therefore, it is likely that RCS business messaging will emerge as a key strategy for operators to maintain business
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messaging revenue growth. RCS is available on the majority of tier 1 operators globally and support for the messaging channel is well established in developed countries. The immediate boost to the addressable RCS userbase following Apple’s support will increase the potential monetisation opportunities for operators. This will also result in more operators supporting RCS as a technology.
THE IMPACT ON MOBILE MESSAGING MARKETS
The increase in the price of SMS has resulted in enterprises paying higher prices for mission-critical messages such as MFA (Multfactor Authentication) and OTPs (One time Passwords). The rise in AIT fraud is culminating in revenue losses for operators, as enterprises seek other alternative authentication technologies that provide greater value. The availability of other channels for authentication, such as OTT business messaging and flash calling, will continue to threaten overall business messaging revenue. However, as RCS becomes a more universal messaging channel, this will be a key method to combat operator losses. RCS basic messages will play an important role in increasing the adoption of RCS by enterprises initially, as these messages have price parity with SMS with the increased functionality of RCS messages. However, to grow RCS business messaging against the threat of OTT messaging, rich media capabilities, such as images and carousels, must be promoted. Unlike SMS, there is currently no standard pricing model
