Rich Communication Services (RCS) Market Size, Share & Trends Analysis Report By Deployment Model (Cloud, On-premise), By Enterprise Size  (Small & medium scale enterprise, Large scale enterprise), By Applications (Rich calls & messaging, Content delivery (content sharing, file transfer), Value-added services (VAS), Marketing & advertising campaign, Cloud storage), By Industry Vertical (Healthcare, Retail & e-commerce, BFSI, IT & telecom, Travel & Tourism, Others ) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global rich communication services market size was valued at USD 2.03 billion in 2021, envisioned to reach USD 22.44 billion growing at a CAGR of 35% during the forecast period.

Rich communication service is a framework between the phone and mobile service providers. The conventional MMS and SMS messaging service, which has been used over the past few decades, is intended to be superseded by the rich communication system. The rich communication service technology is relatively similar to that of WhatsApp or Telegram, in which live chatting is possible, and all of these features are supported by data networks. This system allows users to chat via text, graphic interchange format (GIFs), short audio recordings, and emojis on their mobile devices without needing a third-party application.

Numerous factors, such as the increasing number of online marketing & advertising firms and the escalating growth of voice-over long-term evolution technology (VO-LTE) and mobility services, contribute to the expansion of the global rich communication services market share. In addition, small and medium-sized businesses' increasing adoption of cloud-based services for managing mobile content drives the development of the rich communication services (RCS) market. Nevertheless, restricted end-to-end encryption and rising competition from over-the-top platforms inhibit the expansion of the worldwide rich communication services marketshare.

Market Dynamics

Global RCS Market Drivers

The Increasing Awareness about RCS Benefits over Regular OTT Services and the Number of Marketing & Advertising Competition

The classic over-the-top systems, like Skype, WhatsApp, and Facebook messenger, are common among people; however, technological advancement has increased the likelihood of cyber threats attacking this platform. This results in significant data and privacy loss. RCS messaging provides increased protection against such incidents. RCS has many advantages over conventional OTT platforms since operator’s control the networks over which messages are delivered, allowing them to provide superior service. 

Another benefit of RCS is that it is interoperable between operators. This allows RCS users to communicate with nearly all mobile device users, including iOS, Android, and Windows users. This directly combats a significant drawback of many OTT services, in which only users who have installed the relevant app can communicate. This factor will propel RCS's market expansion during the forecast period.

In addition, marketing and advertising campaigns are costly and time-consuming for businesses, necessitating many hardware products for interactive marketing, a robust IT infrastructure, and the physical participation of individuals to create the best advertisement. However, it is challenging for SMEs (small and medium-sized) businesses to spend much money and time on each product. Nonetheless, due to improved communication resources and rising technological adoption among SMBs, they are shifting their attention to digital and social media marketing. 

Rich communication service provides superior metrics and data analytics compared to other digital marketing tools and strategies. Businesses can determine whether or not a recipient has viewed a message and the response to the message. RCS messaging offers a low-cost messaging system, which is anticipated to increase its popularity among small and medium-sized businesses. This feature drives the growth of the global RCS market over the forecast period.

Global RCS Market Restraints

Limited End-to-End Encryption to Restrict Market Growth

End-to-end encryption is the safety feature of a communication network in which only the mobile phone user can read the messages. In the case of rich communication services, messages are only encrypted during transit, and the service provider may have access to them at times. In RCS messaging, the mobile network provider encrypts messages using server-side disk encryption. It does not, however, inhibit the service provider from accessing information. 

Service providers possess the message's decryption key and can easily decrypt data. This technicality enables service providers to search for sent data and scan it to prevent the circulation of unaccepted and illegal content; as a result, they can easily explore, misuse, and read content, which compromises user security. This factor inhibits the expansion of the global RCS market.

Global RCS Market Opportunities

The Increased Prevalence of 5G Networks to Spur Market Opportunities

5G wireless network facilitated the exploitation and progression of vast capacity and robust and complex heterogeneous infrastructure connectivity. Therefore, there has been an increase in efforts to make the 5G network more capable of handling complex operational contexts and supporting various new services. Rich communication services require a fast and secure network, which is provided by 5G networks, thus establishing a lucrative growth opportunity for the RCS market. In addition, leading industry players are interested in investing in 5G network technology to provide superior customer service.

Regional Analysis

The region-wise segmentation of the global rich communication services (RCS) market includes North America, Europe, Asia-Pacific, and LAMEA.

North America and The Asia Pacific Will Dominate The Regional Market

North America is most likely to grow at a CAGR of 31.2% and command the market. In North America, the advancement of the rich communication services market is driven by the high penetration of 5G networks and the increasing use of artificial intelligence and intelligent connected devices. In addition, the rise in demand for digital transformation among numerous end-users and the convergence of various technologies, like cloud computing and artificial intelligence, have significantly impacted the region and increased its IT and telecommunication budgets. 

Rich communication service enables MNOs (mobile network operators) to implement services based on the most cutting-edge technology currently developing for the native messaging channel. In addition, the increasing adoption of cloud-based architecture in various industries, like healthcare, retail & e-commerce, BFSI, IT & telecommunication, and travel & tourism, drives the market growth.

The Asia Pacific will hold a revenue share of USD 10,222 million, growing at a CAGR of 40.15%. Increasing demands for rich communication services in Asia-Pacific as a result of the emergence of high-end technologies like artificial intelligence and 5G network, and the rising need to send bulk messages for marketing, as well as a significant shift toward digitization by small and medium-sized enterprises, have a positive impact on the market's growth. In addition, Asia-Pacific's IT & telecommunications, BFSI, and retail sectors are investing aggressively in advanced communication services, consequently driving market expansion. 

Moreover, in the past decade, market leaders have expanded their presence in emerging nations like India, China, and Japan, where the demand for high-end cell phones and variable devices is increasing. They are investing significantly in these nations with cutting-edge technology. It is anticipated that this will increase the confidence of Asia-Pacific businesses to adopt rich communication services, thereby accelerating their adoption by end-users.

Segmental Analysis

The global rich communication services (RCS) market is classified based on deployment model, enterprise size, application, industry vertical, and region.

On the Basis of Deployment Model

Segmentation based on deployment model includes on-premise and cloud.

The cloud deployment segment is estimated to advance at a CAGR of 36.7% and to have the largest market share. Small and medium-sized businesses prefer cloud-based rich communication services because they do not require capital expenditures and have low maintenance costs. Integrating cloud-based rich communication services is primarily driven by the increasing deployment of cloud-based rich communication services by both large and mid-sized businesses. These cloud-based solutions enable enterprises to exert superior control over remote access to applications and sensitive data.

The on-premise deployment segment will hold the second-largest share. The on-premise deployment model for rich communication services enables the RCS solution to operate on systems located on the premises of an organization, as opposed to a server farm or the cloud. This service provides advanced security measures, which drives its adoption by large-scale BFSI, IT & telecom, and healthcare organizations.

On The Basis Of Enterprise Size

Segmentation based on enterprise size includes small & medium scale enterprises and large-scale enterprises.

The large-scale segment is projected to grow at a CAGR of 33.6% and hold the largest market share. As a result of the need to cater to a large number of individuals, large enterprises are constantly establishing new virtual machines and applications to manage critical communication scenarios. Implementing a rich communication service assists IT and telecommunications teams of large businesses in their efforts to transform the way they communicate with messaging that can deliver rich content. Large enterprises are implementing rich communication services at an increasing rate, which offers a dynamic and adaptable approach.

The SMEs will hold the second-largest share. Growing focus on sharing rich content and awareness of audio-visual messaging's benefits for SMEs are driving the rich communication services market growth. Moreover, the deployment of rich communication services is on the rise among small and medium-sized enterprises (SMEs) because it offers numerous benefits, such as improved product branding, the transfer of rich content, chatbots, and real-time analytics, which enable them to become more productive, intelligent, and effective.

On The Basis Of Applications

Segmentation based on applications includes rich calls & messaging, content delivery (content sharing, file transfer), value-added services (vas), marketing & advertising campaign, and cloud storage.

The rich calls & messaging segment is expected to advance at a CAGR of 30.4% and hold the largest share. Rich call & messaging services include standard messages but also incorporate the functionality of third-party messaging apps, like WhatsApp, WeChat, and Messenger, allowing users to transfer active links, photos, and brief videos. People are experiencing numerous forms of mental stress and psychological depression due to the pandemic. To prevent this, people are communicating via video calls and audio-visual messages. During the forecast period, this will generate lucrative offers in the segment.

The marketing & advertising campaign segment will hold the second-largest share. Marketing and advertising campaigns are costly and time-consuming for businesses. Creating the best advertisement requires many people's hardware, infrastructure, and physical labor. As a result of the 4.0 industrial revolution, businesses are shifting toward digitalization. This alters the overall business perspective on marketing and advertising. Companies are focused on digital and social media marketing to engage targeted audiences.

On The Basis Of Industry Vertical

Segmentation based on industry vertical includes healthcare, retail & eCommerce, BFSI, IT & telecom, travel & tourism, and others.

The retail & e-commerce segment is estimated to grow at a CAGR of 40.5% and hold the largest share. The retail and e-commerce industry depends on customers' purchasing habits. Numerous retail and eCommerce websites interact with the user via RCS messaging technology. Rich communication service is used to place orders directly through rich messaging and is facilitated with product recommendations based on previous purchase history. It includes shipping updates, order feedback collection, and delivery time inquiries. This factor is anticipated to generate new retail and e-commerce market trends and opportunities during the forecast period.

The IT & telecom segment will hold the second-largest share. Rich communication service is widely used in the IT and telecommunications industry to provide customers with complete, consistent, and reliable information that customer service representatives can use to enhance the user experience. The trend among telecommunications companies to embrace next-generation messaging services for their vast business communication to facilitate the effective and efficient use of public relations resources is a significant factor influencing the adoption of rich communication services in the telecommunications industry.

Impact of covid-19

COVID-19 has positive and negative market consequences, as carbon emissions have decreased globally due to the lockout. COVID-19's reduction in emissions is a short-term benefit. Still, when industries and enterprises attempt to recoup some of their financial losses in the first quarter of the year, carbon emissions will rise dramatically. COVID-19 had a negative impact on global recycling efforts. Countries, notably the United States, have halted or decreased recycling programs to focus on collecting additional domestic waste or because services have been disrupted by the virus.

Also, with industries slowly returning to normalcy following the COVID-19 outbreak, this shift in workplace health and safety is expected to increase due to mandatory social distancing and continuous personal care through sanitization to eliminate even the tiniest possibility of COVID-19 spread. COVID-19 has impacted various companies' revenues, and if the lockdown is lifted, companies will turn their attention to operations to make up for their losses.

Recent Developments

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