Product Code: 46882
The Rich Communication Services Market is expected to register a CAGR of 12.5 % over the forecast period 2021 - 2026. A2P communication channels have become critical to assure business continuity during COVID-19 lockdowns since the number of in-person interactions has been dramatically reduced. The economy has started to adapt to the new conditions created by the pandemic, and as a result, the demand for A2P services has also changed.
- Text messaging is still the most direct and widely used form of communication. As a result, two-way automated enterprise-to-person text messaging, known as A2P mobile messaging, has become essential for businesses.
- Rich Communication Services (RCS) is a successor to SMS that supports read receipts, typing indicators, improved group chats, and high-quality images. RCS relies on a standard called Universal Profile, which defines a way to tell other phones that it can spend and receive RCS. Various prominent smartphone vendors and telecom operators are increasingly developing, investing, and offering RCS platforms.
- For instance, in November 2019, Google rolled out RCS in the United Kingdom and France. In addition to this, AT&T, Sprint, T-Mobile, and Verizon announced that they are also looking to replace SMS with RCS by 2020, and technology will be built on an RCS implementation for Android under the Cross-Carrier Messaging Initiative (CCMI) where Google will not be involved.
- Despite the growing popularity of OTT messaging apps, SMS is still prevalent amongst the population. Even though a significant number of users have been declining since the last few years due to various other messaging apps, but SMS remains one of the prominent sources of messaging, information sharing, advertising, and CRM tool. According to Salesforce, text messages have a 98% open rate, and about 90% of the recipients open SMS messages within three minutes.
- Moreover, text messages are nearly 56 times more affordable compared to cost-per-click advertising such as Adwords, according to Burst SMS. Also, text messages command a 10% click-through rate; owing to such cost-effective means, the demand for SMS in terms of information dissemination is significantly high.
Key Market Trends
BFSI to Witness the Highest Growth Rate Over the Forecast Period
- RCS Business Messaging foresees an even larger market size in the forecast period with a huge user base. The specialty of the technology lies in the newness along with existing features of SMS; RCS is a new channel to gain traction in the worldwide market with a notable number of consumers already using its functions.
- RCS can benefit banks to a great extent as it will let them include a horizontally scrollable carousel of up to 10 vertical rich cards, branch locator, suggestive replies, and many more.
- Some important features of the RCS Business Messaging which make the technology well suited for banks are deep-linking for web-based campaigns and/or emails. It also encompasses features like read recipients, delivery receipts, on-screen event tracking, and customized information of customers on the basis of their responses to a message.
- With the advent of 5G, the global demand for RCS is expected to see exponential growth owing to reduced latency, data, and delivery issues of media content; various telecom operators are expected to offer RCS as part of their 5G services over the coming years.
- Currently, a large share of the active RCS users is limited to the United States, South Korea, Japan, Germany, where operators are offering the service; along with these countries, Mexico, United Kingdom and France are also at the forefront due to an ongoing effort by Google. These demographics are expected to change rapidly, with strong 5G support over the coming years.
North America to Hold the Largest Market Share
- In North America, RCS is gaining traction as the default messaging client, coupled with VoLTE to share the IMS stack that enhances the efficiency of the devices, network and simplifies the deployment of RCS services.
- North America region is home to one of the highest penetration of smartphones and SMS application users in the world. According to CTIA, in 2019, 99.7% of the US population lives in areas that are covered by 4G LTE; moreover, according to Ericsson, in 2019, a number of smartphone subscriptions in the region stood at 320 million and expected to reach 360 million by 2025.
- In addition to this, 74% of North American mobile subscriptions are expected to be for 5G in 2025, and in 2019 the region boasted 91% LTE penetration. Owing to such adoption rates, the region is expected to command significant demand for various smartphone communication applications.
- With a vast network of the potential user base, various vendors are increasingly offering their RCS in the region. In November 2019, Google rolled out RCS support to android messages users across the US. In addition to this, during the year, four major US carriers, Verizon, AT&T, Sprint, and T-Mobile, joined forces to deliver RCS messaging in the country for an android smartphone in 2020.
- The strong financial position of North America has enabled organizations to invest in advanced solutions and technologies. The United States is leading the charge with the rollout of the first 5G commercial networks. In 2018, trials took place in every major market worldwide, with Verizon's plans to launch a 5G handset in early 2019.
- In 2018, at Mobile World Congress Americas, Redbox leveraged RCS at Google's Innovation City Booth. This is indicative of businesses adopting RCS as a way ahead for personalized marketing.
The competitive rivalry in the market is moderate, with companies leveraging onto the newer possibilities that the rich communication services market offers. Organizations are partnering with tech companies and network operators for technological capabilities and innovation.
- May 2020 - Mavenir announced its Mobile Business Messaging Cloud in Europe completed peer-to-peer (P2P) RCS interconnection with the networks of Telefonica, Vodafone, and Deutsche Telekom Germany.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
TABLE OF CONTENTS
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the market
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
- 4.1 Market Overview
- 4.2 Industry Attractiveness - Porter's Five Forces Analysis
- 4.2.1 Threat of New Entrants
- 4.2.2 Bargaining Power of Buyers
- 4.2.3 Bargaining Power of Suppliers
- 4.2.4 Threat of Substitute Products
- 4.2.5 Intensity of Competitive Rivalry
- 4.3 Market Drivers
- 4.3.1 Investments in the field of advertising and marketing
- 4.3.2 Recent developments associated with Android phones enabling RCS messaging to rapidly drive adoption
- 4.3.3 Direct Association of the Service Providers
- 4.3.4 Ongoing efforts to regulate OTT messaging to also open up new opportunities
- 4.4 Market Restraints
- 4.4.1 Interoperability and Privacy concerns due to lack of end-to-end encryption
- 4.5 Industry Stakeholder Analysis
- 4.6 Assessment of the Impact of COVID-19 on the RCS Market
5 RCS MESSAGING - TIMELINE and IMPLEMENTATION
- 5.1 Evolution of RCS
- 5.2 Current use-cases and implementation studies
- 5.2.1 Barclays & HDFC Banks focus on switching to RCS to drive customer engagement
- 5.2.2 Virgin Trains and Japan Railway company launch RCS to provide customer support in the travel industry
- 5.2.3 Google bypasses local operator support to launch RCS in major European countries
- 5.3 Major Applications
6 ANALYSIS ON THE IMPACT OF RCS ADOPTION ON NATIVE SMS
- 6.1 Breakdown of A2P SMS and OTT Messaging for 2016-2021
- 6.2 Share of A2P of the overall Digital Advertising revenue
- 6.3 Anticipated changes in the P2P landscape
7 MARKET SEGMENTATION
- 7.1 End-User
- 7.1.1 BFSI
- 7.1.2 Media and Entertainment
- 7.1.3 Travel and Hospitality
- 7.1.4 Retail
- 7.1.5 Healthcare
- 7.1.6 Other End-User verticals
- 7.2 Geography
- 7.2.1 North America
- 7.2.2 Europe
- 7.2.3 Asia Pacific
- 7.2.4 Rest of the World
8 COMPETITIVE LANDSCAPE
- 8.1 Company Profiles*
- 8.1.1 Telefonaktiebolaget LM Ericsson
- 8.1.2 Google LLC
- 8.1.3 Huawei Technologies Co Ltd
- 8.1.4 Mavenir Systems
- 8.1.5 Samsung Electronics Co Ltd
- 8.1.6 ZTE Corporation
- 8.1.7 Global Message Services
- 8.1.8 Sinch AB
- 8.1.9 Juphoon System Software Co Ltd
- 8.1.10 Summit Tech
- 8.1.11 AT&T Inc
- 8.1.12 T-Mobile USA Inc
- 8.1.13 Verizon Wireless
- 8.1.14 SK Telecom Co Ltd
- 8.1.15 Telstra Corporation Limited
- 8.1.16 Vodafone Group PLC
9 RCS ROADMAP FOR MAJOR MNOS
10 MARKET OUTLOOK