Telcos to regain lost SMS revenue from Rich Communications Services—Experts

April 21, 2023 Stan

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Tech experts are seeing a new revenue stream for telecom operators through Rich Communication Services.
They said this service will now allow the operators to compete with the likes of WhatsApp and Telegram which have been chipping away at their SMS revenue.
The solution also allows businesses to send multimedia messages to their customers in form of SMS.

Technology experts have identified Rich Communication Services (RCS) as a new offering that will help telecom operators recover part of their revenue being lost to the operations of Over the Top (OTT) service providers such as WhatsApp, Telegram, and Viber, among others.

According to them, with RCS being an upgraded SMS that accommodates image and video alongside the text, mobile network operators (MNOs) can now compete with the OTTs and regain some revenue they have lost due to the reduction in the use of SMS.

According to the Senior Operator Partnership Manager, West Africa, at Infobip, Martin Effiong, while the OTT messaging apps have become the norm in person-to-person (P2P) communication, RCS’s rich media capabilities can provide a foothold for MNOs not only in business communication space but also in the P2P market where OTT players currently dominate.

What is RCS?

Emphasizing that the RCS provides a solution for MNOs to compete with OTT players and claw back some of the revenue they have been missing out on in both the P2P and the lucrative Application-To-Person (A2P) messaging space, Effiong described RCS as a rich media capable communication protocol that is an evolution of SMS as a native messaging channel, provided by Google in collaboration with MNOs.

“With RCS, mobile operators are able to provide their subscribers, as well as enterprises, with a messaging system that has the capability of sharing and receiving content such as images or videos without the need to download a separate messaging app.

“With many enterprise-focused features such as chatbots or carousels (content slideshows), brands are able to provide a convenient customer engagement channel for various use cases, ranging from tech support to purchases, as part of the conversational commerce paradigm,” he said.

Why businesses are shifting to RCS

Corroborating Effiong, the Regional Manager at Infobip Nigeria, Olatayo Ladipo-Ajai, said while SMS has played a critical role in business communication, the new realities around customer behavior and expectations mean that traditional SMS messaging – which provides one-way engagement – has certain limitations such as gateways, DND (Do Not Disturb) and firewalls that often prevent promotional messages from reaching the target end customer, which may result to relatively low SMS open and read rates.

“Conversational messaging, in the form of Rich Communication Services (RCS), can address many of these challenges, enabling businesses and brands to communicate more effectively while reaching out, attracting, and converting potential customers. RCS is an evolution of SMS, which integrates features from various chat apps into one platform.
“RCS allows for conversational engagement with customers who can be interacted with as a group or directly on a one-on-one basis, similar to apps such as WhatsApp. A clear benefit for businesses is that RCS provides deeper metrics on whether a message has been delivered, opened, and clicked, delivering better analytics for businesses to gauge how successful a promotional campaign has been,” he said.

What you should know

With the operations of free communications services like WhatsApp, Telegram, and Facebook, among others, many mobile users prefer to use these platforms to send messages as opposed to sending text messages. Based on this shift, telecom operators have been complaining about dwindling revenue from SMS.

However, with RCS, a higher form of SMS, telecom operators will be earning more revenue from businesses using the service to send multimedia messages to their customers.