How relevant is RCS messaging in the strong market presence of OTT players?

Today is our first day as an official part of Sinch, a global leader in cloud communications for mobile customer engagement & RCS messaging! In September, we announced that we would be joining forces with Sinch and now the acquisition is complete, paving the way for us to continue to become the new conversational messaging dream-team.

The first few weeks of getting to know each other confirmed our belief in Sinch as an expert in the field of SMS / RCS. Hence, we caught up with Romain Deruffe, Global Solutions Director at Sinch, for a Q&A session on how the updated version of SMS, that is RCS (Rich Communication Services), can be relevant for businesses, despite the huge presence of Over The Top (OTT) messaging services like WhatsApp, Facebook Messenger and Telegram.

How is the market situation with SMS / RCS and OTT to be rated?

From a demand point of view, end-users want richer content and more interactive ways of communicating. OTT players like WhatsApp or Telegram offer this in a very easy way since several years. Now, they’re allowing enterprises to use OTT channels to reach consumers which is a potential goldmine. So far, this business has been small compared to SMS messaging, but it’s growing at a steady pace. Moreover, SMS is preferred by many companies, for example, in online banking to legitimize transactions (“mobile TAN”) or in the travel sector for the dispatch of travel information like boarding passes. The number of users behind these use cases is huge.

What is the difference between RCS messaging and standard SMS?

RCS stands for Rich Communication Services. To understand the difference between RCS and SMS we must take a look at the differences between MMS (Multi Messaging Service) and SMS.

MMS was the first step in making it possible to send rich content like pictures, videos etc. RCS is the next level of multimedia messaging. It manages sending multimedia content in a much more interactive and engaging way.

Businesses have the possibility to send carousels of pictures that can function as a catalog via RCS. It also allows videos to open up new opportunities in customer communication. RCS messages work with other elements of a smartphone, like a web browser, maps, and other apps, meeting user demands for a better and more seamless UX.

Why should companies use RCS?

RCS has a significant advantage over OTTs – messages are sent directly to the native messaging inbox. No app downloads are required; it’s already there waiting to offer a more organic and enriched experience. Today,many customers receive bank notifications, delivery updates, etc. via SMS and these customers will evolve seamlessly to RCS when it rolls out.

Therefore, companies that are already using SMS should expand their use cases with the new opportunities RCS offers and enhance their customer communication, for example, by sending out SMS / RCS Newsletter. Moreover, those who are not using SMS / RCS yet should look into the reach: Worldwide, RCS reaches over 85% of smartphone users and is preinstalled on all Android new generation smartphones.

How far has the roll out of RCS messaging progressed?

It has become apparent that how operators will proceed depends very much on the market. It is important to know that the SMS / RCS market is controlled by different local operators in each country. So, there are quite a few differences in the roll out worldwide. In China, for example, RCS is included as part of the 5G roll-out and has been from the very beginning.

In Germany, operators Deutsche Telekom, Vodafone and O2 have introduced RCS. The German network operators have not yet published any figures on RCS users, but the native implementation on all Android smartphones means that the mark of 10 million active RCS smartphones has probably already been exceeded.

To date (as of January 2020), more than 360 million smartphones are active with RCS worldwide.

What are the key success factors to broader RCS roll out?

The problem is that one operator alone will not drive enterprise adoption, since enterprises will only reach that operator’s share of the market. Cross-carrier collaboration is essential for RCS to be successful, and it needs providers that offer a software solution to start with RCS without a lot of effort. Ideally, they have experience in messaging and are able to show companies their individual potential in using RCS for their operations, like MessengerPeople.


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