Operator and handset vendor support will increase over the next four years; however, smartphone update cycles will be the prime limiting factor in users becoming RCS-capable. In the context of P2P traffic, users will often be unaware of the transition from SMS to RCS. A2P RCS traffic will enable new media-rich functionality on SMS but will come at a premium cost to SMS.

Juniper Research anticipates that a number of business messaging use cases will continue to use SMS, due to its cost effectiveness and their familiarity with the protocol. Therefore, Juniper Research postulates that the forecast RCS business messaging traffic will primarily be new traffic created by the technology itself and will not displace any significant amount of forecast SMS traffic over the next five years.

In 2019, the onus is on operators that support RCS to develop solutions that foster confidence among both eCommerce players and RCS users to use a native RCS app to make payments. Juniper Research believes that this must initially be done through smaller payments, such as P2P payments between RCS users or to pay for inexpensive digital items. As RCS develops, brands and enterprises are likely to begin offering capabilities to pay for larger physical goods.

After a disappointing 2019 for RCS, Juniper Research believes that increased support from operators will occur during 2020. By 2023, Juniper Research anticipates that operator-billed revenues from RCS business messaging services will reach $5 billion. At this stage, we also forecast that the penetration of RCS-enabled devices will reach 30 percent in North America and Europe; thus approaching the 40 percent ‘mass market’ penetration point. We would then expect a rapid rollout of RCS as operators look to add it to their portfolio to combat user churn to operators that are offering RCS-based services.

Google Accelerating RCS Deployments

Over the last few years, Google has been one of the most vocal advocates for RCS; its provision of a RCS messaging profile for Juniper Research led to the development of rival profiles to increase competition in the space.

The most prominent market hurdle at the moment is the combination of support from handset vendors and network operators. However, Google announced in June 2019 that it would enable smartphone users with RCS-capable devices to bypass operator support and access RCS services. Essentially, this app acts as a third-party RCS application via Android.