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Apple’s confirmation of RCS support marks a significant milestone for messaging.

Apple has officially confirmed that RCS will be included in iOS 18, as quietly noted on an iMessage summary slide during the WWDC event. This marks a significant step forward for RCS messaging and will be noted by all mobile operators. However, Apple also remains focused on its own iMessage innovations and may not be fully embracing RCS with the same enthusiasm as is evident by the announcement being mentioned only in passing during the event.

Interestingly, Apple’s support will extend to the latest GSMA standard, including business messaging features. This is perhaps the biggest surprise in the announcement as this business messaging support was not suggested previously by Cupertino. This will open up rich messaging services to enterprises who wish to connect with their customers via messaging.

North American and European carriers are preparing for a launch, with more details expected by Q4 2024. However, there are still unresolved issues, such as the difference in encryption between Google’s RCS (encrypted) and Apple’s RCS (unencrypted as per GSMA standard).

The announcement is seen as a positive development for customers, brands, and the messaging community, indicating that 2024 could finally be the year RCS gains widespread adoption after several delays.

Apple will adopt the RCS standard on iOS later this year, enhancing text messaging interoperability between iPhones and Android devices. This shift is expected to encourage mobile marketers to transition from SMS to RCS, which offers rich media-sharing capabilities and improved messaging features like verified sender status and interactive messages.

RCS, supported by Google and major carriers such as Verizon, AT&T, and T-Mobile, allows for more dynamic communication than SMS. Historically, RCS messages sent to iPhones reverted to SMS format, causing a disparity between iOS and Android messaging experiences. Apple’s move to integrate RCS will bring features such as read receipts and typing indicators to messages between these platforms, though iPhone RCS messages will still appear as green bubbles.

With roughly 200 million business world-wide and fewer than 10% of those businesses currently using business messaging, this opens up a world of opportunity for mobile operators.

For brand marketers, RCS presents an opportunity to enhance customer engagement through visually appealing messages containing images, videos, and call-to-action buttons. This shift is anticipated to significantly boost engagement and conversion rates compared to SMS and email, with some brands already experiencing higher engagement rates and conversion metrics using RCS.

Global operator revenue from RCS business messaging is expected to surge from $1.3 billion in 2023 to $8 billion in 2025, driven by Apple’s adoption of the standard. The number of active RCS users is projected to reach 2.1 billion by 2025.

While Apple’s decision comes amidst pressures from the European Union’s Digital Markets Act, SMS is expected to remain prevalent with 9.3 billion subscribers forecasted for 2024. Nonetheless, RCS is anticipated to become a strong alternative as businesses seek more cost-effective and interactive communication channels, despite challenges such as managing increased reply volumes. Generative AI may help mitigate these challenges by efficiently handling customer interactions.

  • Marketing

    Enterprises will send rich, interactive promotions directly to customers, utilizing RCS’s enhanced capabilities for personalized outreach.

  • Retargeted Customers

    RCS will engage customers with dynamic, multimedia messages encouraging them to revisit and complete their purchases.

  • Abandoned Cart Offers

    Companies will use RCS to send compelling, visually appealing reminders of items left in online shopping carts, often with special incentives.

  • Customer Support

    RCS will provide robust, real-time customer service through interactive chatbots and seamless integration with human agents.

  • Appointment Scheduling

    Automated RCS messages will allow customers to easily book, confirm, and modify appointments with rich media and interactive options.

Mobile operators have an opportunity to become centrally involved in RCS messaging for businesses. Even though Google provides the infrastructure to send messages and aggregators have historically had the best relationships with brands to sell rich messaging, operators have an opportunity now to take their place in the ecosystem. Why is that?

  • Brand Verification

    Mobile operators will provide critical functions like brand verification to ensure trust in the system.

  • Billing & Settlement

    Mobile operators are being asked to manage billing and settlement between Google and the brands/aggregators.

  • Oversight

    Mobile operators can perform the message oversight function to protect mobile subscribers from things like fraud and spam.

In fact, since it was suggested that this announcement was coming, mobile operators have been clamoring to sign up with Google and get involved in RCS messaging. This is principally because it represents a new messaging revenue stream with huge potential.

90% of businesses are not currently using business messaging and even the ones that are primarily use SMS to deliver one-time passwords for authentication purposes. With a whole world of new use cases for marketing, sales and customer support, the return on investment will be transformed. This ROI potential is what will drive huge investment in business messaging by marketing and customer support teams worldwide, and mobile operators are not blind to this fact, particularly as SMS is considered to be in its twilight.

Unsurprisingly, Google’s plans for RCS are self-serving. While they do want mobile operators and aggregators involved, this is is ultimately to facilitate huge revenue growth for their company. Mobile operators are certainly wary of Google and, in time, possibly being cut out of the RCS ecosystem. This is why it is so important for operators to embed themselves in the ecosystem now with compliance, oversight and billing responsibilities.

Mobile operators, in a revenue share model with Google, stand to gain massively from a renaissance in text messaging revenues, this time driven by business messaging. Yes, it will spell the end for SMS as an A2P revenue generator, but those revenues look set to be dwarfed by the coming growth of RCS business messaging.

In this sense, the two or three seconds given by Apple to mention RCS support in their latest iOS 18 announcement may be one of the most understated commercial announcements of all time! Let’s see shall we?

To learn more about the topics covered in this article, or to discuss how Openmind Networks can help you navigate the future of business messaging, please get in touch or contact our team of messaging experts online here.

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