Telco revenue from RCS business messaging to reach $8 bn by 2025, largely driven by Apple support: Report

Global telecom operator revenue from rich communication services (RCS) business messaging will grow from $1.3 billion in 2023 to $8 billion in 2025, largely driven by Apple’s announced support for the RCS technology in late 2024, according to a report released by Juniper Research on Monday.

“Apple’s entrance into the market, with support over iOS devices, will grow the number of active users by 900 million over the next two years; reaching 2.1 billion active users globally,” the research firm has predicted.

The report predicted this will increase the value proposition of RBM (RCS Business Messaging) amongst enterprises. In turn, this will encourage more telcos to roll out the technology over their networks, attracted by the significant growth in RBM termination revenue.

Apple said in 2023 that it will adopt the RCS messaging standard, which will be enabled via a software update later in 2024 which will enable a vast range of iMessage-like features for messaging between iOS and Android users.

“Later next year, we will be adding support for RCS Universal Profile, the standard as currently published by the GSM Association. We believe RCS Universal Profile will offer a better interoperability experience when compared to SMS or MMS. This will work alongside iMessage, which will continue to be the best and most secure messaging experience for Apple users,” Apple said in a press statement in 2023.

GlobalData had separately said in a report that Apple’s decision to adopt RCS could be attributed to the regulatory oversight of the European Union (EU)’s Digital Markets Act (DMA) which could designate iMessage as a “gatekeeper service”, and compel the Cupertino-based tech company to make its proprietary messaging service available on other platforms (Android and Windows), or face a fine of 10% of its global turnover.

Additionally, Juniper anticipates that RCS will become a key technology for telcos in the business messaging ecosystem due to the high levels of fraud affecting the SMS business messaging sector. The research firm said that RCS will enable telcos to retain business messaging traffic over telecoms networks, as SMS adoption slows, and OTT business messaging channels continue to grow significantly.

“For the first time, the value of SMS is being questioned by enterprises. Operators must act quickly if SMS fraud and high prices cannot be resolved. Apple’s introduction raises the profile of RCS, a technology that has historically been hindered by a lack of support, and can become a substitute for SMS business messaging traffic,” said research author Molly Gatford.