Support for RCS (and RBM) services on iOS devices significantly expands the revenue opportunity for operators. However, there are challenges in ensuring and validating roaming and interoperability. How do operators overcome these challenges?

RCS (Rich Communication Services) has certainly been a success story – albeit one that has been a slow and steady journey rather than the explosion some envisaged a few years ago. Its popularity is about to be further boosted by the announcement in January 2024 that Apple will support the advanced messaging service on iOS later this year. It offers service providers and enterprises an expanded opportunity to reach millions of new subscribers.

In fact, according to Juniper Research, global operator revenue from RCS messaging will grow from $1.3 billion in 2023 to $8 billion in 2025. This substantial growth will be largely driven by Apple’s support for RCS^[1]. Juniper also predicts that support for iOS devices will grow the active subscriber base for RCS by 900 million over the next 2 years to reach 2.1 billion globally.

RCS on iOS already working in Japan

The success of RCS on iOS devices has already been demonstrated in Japan. In May 2018, three of the largest Japanese carriers, KDDI, NTT DOCOMO, and SoftBank, launched the +Message app, which is preloaded on many Android smartphones in Japan, but is also available on iPhones through the Apple App Store.

The +Message app is built on the GSMA’s RCS standards. The app is estimated to already run on 25 million devices in Japan, and while iOS figures are not broken out, with a penetration of around 52%, it’s likely that many subscribers have already sent RCS messages over iOS. Google has also announced that it is working with KDDI to bring an “updated messaging experience” to Japan with RCS in Google Messages.

RCS is clearly here to stay. This is, of course, good news for operators and the consumers that use it. But the move to iOS is also expected to boost the value proposition of RBM (RCS Business Messaging) amongst businesses that seek to reach customers via A2P messaging and engagement. In turn, this will encourage more operators to support RBM, attracted by the significant growth in RBM termination revenue, creating a virtuous circle.

A further benefit of RCS (and RBM) is that it supports encryption, unlike SMS, which enables an additional layer of security and privacy.

The challenge of ensuring and validating QoS on RCS and RBM

However, according to Juniper, OTT business messaging channels have 4.1 billion users (2024), compared to RCS’s 1.2 billion currently, and operators are expected to lose $381 million in A2P OTT in revenue in 2024.

RCS and RBM offer a significant boost to operator revenues, which need to be protected from OTT apps. That’s why it’s so important for operators to ensure that their RCS and RBM messaging tools provide the QoE expected by consumers and enterprises alike. However, when iOS does launch RCS there will be a number of challenges to overcome.

One of those is that the take-up of RCS on all operating systems will be limited by the lack of complete operator support and competition from third-party apps. A more important challenge is roaming and interoperability. There are already reports that the iOS beta version currently lacks some features when messaging occurs between Apple devices and Android devices.

But roaming and interoperability between networks in the same country, as well as internationally are important considerations when it comes to delivering the appropriate QoS for RCS and RBM messages. After all, businesses do not know where the intended recipients of promotional messages and other A2P traffic are when they launch their campaigns or send important notifications to customers.

Many will be roaming, which means that delivery into visited networks is important. Someone who buys something while on holiday will still expect to receive the usual notifications from partners involved in the delivery chain – couriers, postal services, as well as those from payment partners to authorise transactions.

Ensuring that RCS message delivery is handled successfully is therefore essential, for all in-network, cross-network (national), and to / from visited networks (roaming).

Operators need to test and continuously validate all RCS use cases. How do they do that? In part 2 of this blog, we’ll explore those challenges and consider what MNOs need to do to ensure the success of RCS services throughout their lifecycle ….and to validate interoperability and roaming.

^[1] https://www.juniperresearch.com/press/apple-s-rcs-support-to-grow-rcs-business-messaging-revenue-by-500-globally-in-two-years/