How operators can overtake OTT with RCS messaging

OTT (Over the Top) Messaging apps such WhatsApp, Facebook Messenger, iMessage and WeChat have driven the decline of the conventional SMS text services. Instant messaging supposedly overtook SMS in 2012 and since then, Global SMS revenues have fallen accordingly. Person to Person SMS revenues will have fallen by around 42% between 2017 and 2022.

Operators around the world have been pressured to bundle unlimited SMS messages into mobile tariffs so that they remain relevant to customers and stand a chance of competing. However, as instant messaging apps are essentially free, this is difficult to achieve. Even at this reduced cost, SMS messaging lacks functionality like that of group messaging, read receipts and also the ability to send GIF’s and stickers, which have all grown common in recent times.

However there is hope and mobile operators around the world are fighting back with RCS (Rich Communication Services), a concept that will enable SMS to incorporate such features. Much like the aforementioned features, RCS will make it easier to send pictures and videos of a higher quality as well as larger files and attachments. It will also allow consumers to see which of their friends are online and available for contact. Those working in the industry anticipate that RCS will help telcos win back consumers and also provide a big opportunity for marketers.

Believe it or not RCS has actually been around since 2007 when the ‘Rich Communication Suite Industry initiative’ was formed. However, evolution of RCS has been very slow. Multiple operators introduced RCS messaging services under other names, however it was not until 2016 when the GSMA released a ‘Universal Profile’, a standard which allowed for openness and one main process between RCS services.

Since then, the initiative has picked up speed and the Universal Profile has gathered momentum with the GSMA announcing that 55 operators are onboard. These operators include: AT&T, Verizon, Vodafone, Telefonica, Orange, AT&T, Deutsche Telekom, Singtel and China Unicom. Furthermore, 11 device manufacturers including Samsung, Huawei, LG and HTC are signed up.

Google’s Android operating system is also on board, along with Microsoft’s OS. Google bought Jibe Mobile, a company working on RCS in 2015 and since then, they have rolled out RCS messaging on Android phones in many international markets.

Such an epic move allows for RCS messages to go mainstream. Google’s RCS enabled messaging app – aptly known as Messages, – comes ready on numerous devices as the default text messaging app. Users that have Android phones which do not have it already installed, are able to set it as their default SMS application should they so wish to. As adoption of the protocol increases, RCS will increase its potential to combine the more advanced service functionality of OTT with the ubiquity of the SMS.

Such a move has benefits for consumers. Many of the new features available in RCS will be familiar to consumers because of instant messaging apps, the reach of RCS could be its advantage if it becomes as far reaching as the SMS.

The change has obvious benefits for consumers. While a lot of the new features available in RCS will already be familiar to many consumers from various instant messaging apps, RCS’s reach could be its advantage, if it becomes as universal as the SMS. Users have to download and sign up to WhatsApp, Messenger and Viber so that they can communicate with each other. This will not be necessary for RCS as it becomes the standard for text messaging. There are also huge opportunities for marketers as well. The advanced features and characteristics of RCS could make-way for more flawless and intricate interactions with their customers.

Howard Thompson, who handles RCS market development for O2 Telefonica says,

 “Brands have a lot of different channels of communication available to them today: brands, email, people might contact them on Twitter or other social media, there’s WhatsApp for Business or Apple business messaging, people might speak with an agent or an automated voice system. RCS looks to consolidate a number of those communication channels into a single pipe,” said Thompson.

He then went on to give an example of how this may look. “So today, in your text messaging app, you’ll have a list of different names, and it’ll mostly be people you know. In RCS, you’d have a list of people you know, but also brands, who could have their logo and colouring there, and could be verified, in the same way they would be verified on Twitter. I might want to contact Tesco and find out if they sell Häagen-Dazs at your local store, so I could message Tesco and ask via text. Around 80 percent of communications on RCS could be handled by a bot, so simple questions like that would be handled by a bot.”

“Or for something more complex, I might want to buy some shoes, so I could text Nike. If I’m a previous customer, they might already know my shoe size and the type of shoes I like, so they could show me a selection of shoes I might like within a spinning carousel. If I click on a pair, then a map could pop up within the chat showing me the nearest store where I could collect those shoes. Then I could buy those shoes right then and there, still in the chat, and they could give me a QR code so when I go into the store, they scan it, and I collect my shoes. Or maybe they’re waiting there for me when I arrive with my shoes and a cup of my favourite tea! That kind of capability exists.”

Many of these features have certainly been available in another form somewhere else, however the main attraction of RCS is to unite these communication channels and make them much more accessible to consumers. Operators will be able to verify customers via their mobile numbers, as well as other verification steps, meaning marketers could more easily connect up RCS with other communication channels.

Obviously there are still challenges for RCS to overcome. Firstly, much of RCS appeal comes from its potential to become ubiquitous, however right now, only one of the Western World’s two main mobile operating systems has signed up, with Apple still to commit. 

Rumor has it that Apple are to come on board at some point in the future. They have the technology built in but at the moment, they are choosing to push their own services. This does not rule out a merger in the future.

Perhaps worthy of note, is that RCS messaging is not end-to-end encrypted, which could be a sticking point for some users. It is questionable whether Facebook-owned alternatives like WhatsApp and Messenger will be seen as safer alternatives – despite their end-to-end encryption. Last year, a survey found that 63% of Britons do not believe that big messaging platforms like WhatsApp and Messenger respect their privacy rights. If these challenges are successfully navigated, RCS has the potential to have a big impact in uniting brand communication, marketing and commerce.