A new study from Juniper Research found that revenues from RCS (Rich Communication Services) messaging will exceed $9 billion (€7.65 billion) by 2022, up from an estimated $126 million (€107.08 million) in 2018. RCS, backed by Google, supports rich media content including video sharing and file transfers.

Initial RCS strategies key to market traction

The new research, Mobile Messaging: Operator Strategies & Vendor Opportunities 2018-2022, found that operators’ RCS revenue potential is firmly rooted in A2P (Application to Person) services, which includes automated messages from companies to customers. A2P RCS will bridge the gap between the ubiquity of SMS and the enhanced experience that OTT applications bring. It found that over 90% of RCS traffic will be A2P by 2022, as companies benefit from rich media functionality and large reach to enhance engagement levels.

However, Juniper argued that initial pricing and attractive business models will play a pivotal role in encouraging the early adoption of the technology. It urged operators to initially implement an event-based model involving a simple charge per delivered message to ease the transition from SMS to RCS. Juniper forecasts that global RCS users will near 2 billion by 2022.

Research author Sam Barker added: “Operators’ support for RCS is growing as the revenue potential becomes apparent. Whilst the technology has been unsuccessful as a P2P messaging channel, its capabilities as an A2P service will prove popular with advertisers”.

Novel pricing models to maximise RCS revenues

Juniper recommended that operators must consider fair usage policies while implementing new pricing models. For example, a model based on the number of RCS interactions would necessitate such a policy to guard against straining operator networks.

The research predicted that AI (Artificial Intelligence) will be needed to facilitate conversational communication that minimises response times. Until then, it suggested that APIs support interactive media-rich content to foster confidence amongst mobile users. Additionally, it urged platforms to include fall back to SMS to ensure message termination.

Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.

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