RCS messaging could take almost a fifth of operator business messaging revenues by 2029 – up form 3% this year – but only if they can get the pricing right, see off stiff competition from OTT services and fight fraud.
An extract from the new report, Global RCS Business Messaging Market 2024-2029, is now available as a free download.
According to the latest messaging report from Juniper Research, revenue from RCS business messaging (RBM) services will represent 18% of operators’ business messaging revenue globally by 2029; driven by depleting trust in SMS driving enterprises to migrate business messaging traffic to RCS, to benefit from the brand verification status.
RCS pricing is key
To maximise long-term growth of RCS, the study urges service providers to ensure price parity with SMS and streamline the verification process for businesses, by offering a standard process across network operators and aggregators. In turn, this will enable RCS business messaging users to add custom branding and increase the acceptance of RCS channels amongst mobile subscribers.
But it is the threat from OTT that should really trouble operators. WhatsApp, for example, is expected to carry around 1 trillion business messages by 2029 and already offers all the rich media and brand verification capabilities that RCS can offer.
And WhatsApp can get services to market more rapidly, being an established product with huge customer buy-in. Again, operators must look at strategically pricing RCS below that of WhatsApp to build market share. Aggressive pricing, says Juniper, will be essential to start RCS growth.
Subsequent pricing should then be based on ‘call-to-action monetisation’ rather than price hikes, the report suggests.
This, the report says, has to happen alongside educating both businesses and consumers about RCS – stressing how it is a messaging system that is native to their phone’s operating system.
And then there is fraud. There is uncertainty around fraud in RCS business messaging as it is something of an unknown thanks to RCS having relatively low penetration. Fraud has decimated SMS and, once RCS starts to gain ground, frauds will start to be perpetrated across the messaging channel.
While RCS messages are well tracked by Google’s platform that underpins the technology, operators must work closely with vendors of messages and with Google to monitor traffic patterns and look out for new kinds of messaging fraud that are themselves ‘native’ to RCS.
Working together
One of the key messages to come out of the juniper report is that operators must be more unified in their approach to RCS across all these areas. All operators in a country need to offer RCS at the same time, otherwise the service will be partisan and won’t gain traction with businesses unless all users can see it.
The report recommends that operators must look to integrate with Google’s Jibe platform to be able to offer interoperable and comparable services across countries and regions. This will take time and so Juniper predicts that RCS growth will remain slow in 2025 as this integration happens
Research author Molly Gatford commented: “Enterprises have begun exploring alternatives to SMS, and RCS is a key tool that operators can use to combat migration of messaging traffic to channels outside of the telecoms ecosystem. Whilst enterprises’ choice of channel will vary, RCS will remain a key element of an operator’s business messaging portfolio alongside SMS”.
