(Image Credit: iStockPhoto/Bogdanhoda)
Few people outside the mobile industry paid attention to Rich Communication Services (RCS) until Google announced in September 2015 that it had acquired Jibe Mobile, a company at the forefront of RCS development. That announcement raised questions about the future of RCS and the role of traditional SMS as over-the-top (OTT) messaging apps continue to gain popularity worldwide.
Work on RCS began as early as 2007 and received formal backing from the GSMA a year later. The standard aims to bring richer features to carrier messaging, including group chat, voice and video calling, file transfers and more. Despite these advanced capabilities and early industry enthusiasm, RCS has not yet achieved the widespread adoption many expected.
Major supporters
RCS benefits from support by the GSMA and numerous mobile network operators (MNOs), but Google’s involvement could be decisive. With Android running on roughly four-fifths of the world’s smartphones, Google’s backing is important to expanding RCS reach.
Google’s reasons for acquiring Jibe and investing in RCS are not fully clear. The company already operates an OTT messaging service—Google Hangouts—so one possibility is that Google will integrate RCS into its existing platforms. However, Hangouts has struggled to match the mainstream success of competitors such as WhatsApp and Skype, and incorporating RCS into a complex, underperforming app risks limiting RCS’s potential.
Market trends favor specialized, streamlined apps rather than large, multifunctional ones. Successful examples include Facebook’s separation of Messenger from its main app. For RCS to thrive, its features must be prominent and easy to access, rather than an optional add-on within an overly broad application.
Adoption challenges
RCS promotes interoperability, but that very strength creates obstacles. The standard’s effectiveness depends on global agreement among operators and device makers, and coordinating international standards has slowed widespread rollout.
By contrast, privately run OTT apps can iterate rapidly. WhatsApp, for instance, serves over a billion users with a relatively small team, enabling quick adaptation to market shifts. An industry-standard messaging protocol governed by many stakeholders faces a slower decision-making process.
Still, some markets have embraced RCS. Spain, for example, was an early adopter, launching the service in 2012 under the Joyn brand. Major Spanish operators, including Orange, Vodafone and Telefónica Movistar, have since introduced RCS-based services.
There are advantages to RCS: it can be tied to individual phone numbers, which supports user privacy, and it is backward compatible with SMS, easing the transition from legacy messaging to richer formats.
Limited business upside for operators
From an operator perspective, the benefits of RCS are unclear. The GSMA cites potential monetization opportunities that could help recapture revenue lost to OTT services, but concrete, scalable business models have yet to emerge beyond bundling RCS as a value-added feature or including it with data plans.
Given the entrenched popularity of apps like WhatsApp, displacing them will be difficult even with GSMA support. RCS also risks becoming an Android-centric offering if Apple declines to natively support it—particularly if Apple is reluctant to embrace a standard closely associated with Google. In that scenario, RCS could function more like another OTT product, leaving operators with limited control and fewer monetization options.
For now, operators still derive significant revenue from existing SMS services. Application-to-person (A2P) SMS traffic is growing, and SMS remains a proven global communication channel with billions of unique users. Its wide reach and low implementation cost make it attractive for operators and businesses alike.
Data-based messaging services such as RCS have yet to demonstrate a reliable path to significant operator revenue and may risk relegating carriers to the role of commodity data providers unless they can find compelling commercial models. Additionally, many markets still have low penetration of data-capable smartphones, reinforcing SMS’s role as the dependable choice for businesses and marketers who need to reach a broad audience. Even with backward compatibility, uncertainty about a recipient’s ability to receive enriched RCS content will likely keep many message aggregators and enterprises relying on A2P SMS for the foreseeable future.
SMS remains relevant
Despite GSMA and Google support, it is unlikely RCS will become the dominant global mobile messaging standard overnight. Operators may pursue innovation, but the continued profitability and ubiquity of SMS suggest it will remain a central component of messaging strategies for years to come.
Do you think it will be a while before RCS becomes the standard? Share your thoughts in the comments.