Rich Communication Services Market

The anticipated expansion of the Global Rich Communication Services (RCS) Market is foreseen to transition from its 2022 evaluation of USD 5.2 billion to approximately USD 11.7 billion by 2030. This growth, reflecting a Compound Annual Growth Rate (CAGR) of 17.6% during the period from 2023 to 2030, is driven by significant factors. Notably, the augmented investment in digital marketing spanning various industry sectors plays a crucial role in propelling the rich communication services market forward.

The outbreak of COVID-19 has had a profound impact on communication service providers worldwide. Regions including North America, Europe, APAC, MEA, and Latin America have witnessed substantial disruptions due to the pandemic. In response, major players across these regions are initiating measures to ensure that consumers have access to top-notch communication services. This effort is geared towards facilitating seamless connectivity between individuals and fostering effective networks with both employees and customers.

Market Dynamics

Driver: Increasing number of advertising and marketing companies

RCS has introduced a heightened level of engagement within the A2P and P2P messaging realms. This technology empowers enterprises to imbue their messages with visual branding, preserving their corporate image and distinct identity during customer communications. By adopting RCS for marketing endeavors, brands can offer a measure of personalization, granting the flexibility to utilize bespoke colors, logos, and company names as sender IDs. This approach enables businesses to dispatch messages that seamlessly align with the aesthetics of their applications, websites, and digital offerings.

The RCS platform has proven instrumental in capturing the attention of end users and fostering interaction among them. Anticipated to revolutionize digital marketing and advertising strategies, RCS has shifted the focus for brands and businesses from the conventional SMS method. The evolving landscape necessitates more dynamic avenues of engaging with customers. In a world characterized by increasingly interconnected consumers, RCS assumes a pivotal role in marketing and advertising campaigns by delivering opportunities for genuine and tailored interactions.

Restraint: Limited capability to offer end-to-end encryption

The adoption of RCS is rapidly increasing, positioning it as a potential successor to the existing SMS protocol. This transition is attributed to its capacity to empower individuals to craft captivating, immersive, and interactive rich communication messages. However, despite these advantages, encouraging consumers to embrace RCS can be challenging due to its inability to provide end-to-end encryption for messages. This absence of robust security measures prevents the sharing of sensitive information through RCS, as the messages are accessible to RCS providers. Consequently, RCS is not classified as a messaging platform with end-to-end encryption, which places it in a less advantageous position compared to competing chat applications like iMessage, WhatsApp, and Signal that offer robust message encryption capabilities.

Opportunities: Strict regulations for OTT messaging services to boost the adoption of RCS

OTT services are presenting a multitude of concerns and hurdles within the telecommunications landscape, particularly for telecom operators. Regulatory bodies at the national level, such as TRAI in India, and regulatory consortia like BEREC in Europe and CITC in Saudi Arabia, have enforced stringent compliance measures to curtail the scope of OTT messaging services. For instance, the UAE's Telecommunications Regulatory Authority (TRA) has outright prohibited Voice Over Internet Protocol (VoIP) applications, such as WhatsApp calling and Skype, citing non-conformity with the UAE's regulatory framework.

Given that RCS falls under the oversight of GSMA's universal profile, there is an expected surge in the adoption of RCS in the near future. The implementation of robust compliance measures to restrict OTT messaging services is likely to foster the uptake of RCS. This, in turn, would grant consumers access to a diverse array of online services, transcending the conventional voice and messaging offerings furnished by telecom operators.

Mobile Network Operators (MNOs) are strategizing methods to supplant OTT apps like WhatsApp, WeChat, and Facebook Messenger with RCS. Their efforts are centered around establishing an interoperable service across mobile networks and devices, aiming to harness the advantages of a messaging platform capable of rivaling the aforementioned apps. This ambition stems from the recognition that the existing SMS and Multimedia Messaging Service (MMS) systems are antiquated in comparison.

RCS operates in direct correlation with consumers' phone numbers, eliminating the necessity for extra app installations or account creations, effectively sidelining third-party involvements. Moreover, RCS doesn't rely on data usage, as MNOs are gearing up to offer boundless text messaging plans. However, the attainment of this objective hinges on the comprehensive development of universal support for RCS.

Challenges: Difficulty to cope with OTT service providers

The swift integration of smartphones into everyday life has granted consumers access to an extensive array of communication services that extend beyond the traditional voice and messaging offerings provided by mobile operators. OTT services offer a notably enhanced consumer experience by enabling the management and distribution of audio, video, and other media content over the internet, all without the involvement of a multi-system operator. This framework also facilitates the streaming of film and television content via the internet, eliminating the necessity for users to subscribe to conventional cable or satellite pay-TV services. Prominent OTT players encompass platforms such as Roku, Apple TV, ChromeCast, along with communication tools like Skype, Google Voice, WhatsApp, Viber, and Telegram. While OTT services have achieved widespread coverage, the utilization of RCS remains comparatively limited, posing challenges in competing with OTT service providers.

In the forecasted period, it is anticipated that large enterprises will dominate the market due to their substantial resources and capacity to engage in diverse operations, including dedicated business units for advertising and marketing. The ready availability of resources and funds facilitates the seamless integration of upcoming technologies into the marketing and advertising strategies of large enterprises.

RCS for healthcare enterprise vertical to record the fastest growth rate during the forecast period

A substantial number of hospitals and medical practitioners are presently embracing patient engagement solutions, predominantly facilitated by OTT applications. These functionalities are now being transitioned to RCS messaging to deliver outcomes of diagnostic tests, reminders for appointments, updates on claims, health advice, payment notifications, location information, and enhancements aimed at enhancing the overall patient journey. The surge in global population, shifts in life patterns, and heightened consciousness about health matters collectively account for the remarkable expansion within the healthcare sector.

APAC to record the highest growth rate during the forecast period

The expansion catalyst propelling RCS adoption within the APAC region is attributed to factors such as the expanding population, the surge in smartphone connections, the uptick in mobile payment usage, the burgeoning retail sector, and the utilization of advanced SMS systems for marketing and customer relationship management. Numerous mobile engagement and communication providers in this geographic area have formed partnerships with diverse telecom operators to furnish their customers with enriched, tailored multimedia content.

Market Players:

Key market players profiled in this report AT&T (US), Vodafone (Uk), Deutsche Telekom (Germany), Google (US), Verizon (US), Telefonica (Spain), and Orange Business (US).

The research report categorizes the rich communications services market to forecast the revenues and analyze trends in each of the following subsegments:

Applications

• Advertising Campaign
• Content Delivery
• Integrated Solutions
• Others

End users

• Consumers
• Enterprises

Enterprise Size

• SME’s
• Large enterprises

Enterprise Vertical

• BFSI
• Telecom and IT
• Media and Entertainment
• Tourism and Logistics
• Retail and eCommerce
• Healthcare
• Other Enterprise Vertical (Government and Utilities)

By Region

• North America
• Europe
• APAC
• MEA
• Latin America

Recent Developments

• By April 2020, Telstra had collaborated with Google to extend RCS availability to a broader range of handsets within Australia.
• In March 2019, Telefonica forged a partnership with CK Hutchison, a distinguished multinational conglomerate, with the objective of delivering fixed, mobile, and digital communication services to large enterprises and Multinational Companies (MNCs).
• In January 2019, Google introduced RCS chat on the Google Fi network and across compatible devices, also enhancing international data speeds to LTE. This service was made accessible to all Pixel phones, in addition to the Android One Moto X4, Moto G6, LG V35, and LG G7.
• During December 2018, Verizon inaugurated its ""RCS"" messaging solution, branding it as Chat to make the feature more appealing to a broad audience. The integration of Verizon's RCS messaging was limited to Google Pixel 3 and 3 XL devices.
• In the same month of December 2018, Telefonica Deutschland extended its partnership with Telefonica International Wholesale Services (TIWS), entrusting TIWS with all international and IPX services for Telefonica Deutschland.
• November 2018 saw AT&T elevate an initial proprietary version of RCS for Android to meet global GSMA standards.
• In March 2018, Deutsche Telekom introduced the RCS service for Magyar Telekom's residential and enterprise customers. This fresh messaging service complements the still widely used text message format, present for a quarter-century, and the MMS image sharing capability. The RCS service introduces new features such as internet-based individual and group chat, high-definition photo and video sharing, file transmission, location sharing, and group messaging options.