Presented at International Telecoms Week, 24th June 2019, Atlanta. New forecasts from Mobilesquared show RCS growth will accelerate to add 1.15 billion users and achieve scale by end 2020, with hockey stick P2A revenue growth predicted for 2022

1. The Fight for Dominance:
RCS vs. OTTs
Why the opportunity for RCS is now
23 June 2019
Gavin Patterson
Chief Data Analyst, Mobilesquared
gavin@mobilesquared.co.uk
@Mobilesquared

2. About Mobilesquared
Leading analysts in Business Messaging
We provide definitive data and expert insight
We work with the leading mobile and tech companies across the mobile ecosystem, from regulators,
mobile operators, service providers, brands, agencies, start-ups … to understand mobile and engagement.
We do this through extensive research, deep analysis based on years of experience, and forecasting
market opportunities based on actionable numbers.
Accurate data. No hype.
www.mobilesquared.co.uk @Mobilesquared

3. Mobilesquared update our RCS forecasts on a
quarterly basis. These are based on on-going
research, discussions and interviews with the
RCS ecosystem. This presentation contains our
latest forecasts, published June 2019.
Our next update will be September 2019.
@Mobilesquared

4. @Mobilesquared
Messaging user landscape
P2P MESSAGING APPS
1 bil
2 bil
3 bil
4 bil
1.2 bil
1.5 bil
4 bil
1.1 bil 1 bil
0.8 bil
0.3 bil
0.2 bil
USERS
OTT pressure mounting but mobile operators
still have greatest reach
0.2 bil

5. TOTAL DEVICES
Mobile operator messaging perspective
MESSAGING POTENTIAL JAN 2019
1 bil
2 bil
3 bil
4 bil
4 bil
M
O
B
I
L
E
O
P
E
R
A
T
O
R
M
E
S
S
A
G
I
N
G
R
C
S
MESSAGING POTENTIAL
USERS
RCS
A
N
D
R
O
I
D
S
M
A
R
T
P
H
O
N
E
S
A
B
C
3.5 bil
2.8 bil
0.9 bil
0.7 bil

6. Business messaging perspective
A2P SMS

7. Rich messaging perspective
OTTs – end 2018
Source: Similarweb
Messenger
WhatsApp
WeChat
Viber
Line
KakaoTalk
IMO

8. @Mobilesquared
END-JUNE 2019
DEC 2020
Canada, France, Germany,
Japan, Mexico, Norway,
South Africa, South Korea,
UK, USA.
New for 2020: Argentina,
Australia, Austria,
Belgium, Brazil, Chile,
China, Colombia, Czech
Rep, Denmark, Egypt,
Greece, Hungary, Italy,
Philippines, Poland, Qatar,
Romania, Saudi, Slovakia,
Spain, Sweden, Thailand,
Turkey, UAE
RCS user base will
grow by an average of
64.1 million m-o-m
In 18 months, RCS
user base will grow by
a total of 1.15 billion
users
• Market ubiquity
• Interoperability
• Scale
Rich business messaging acceleration
June 2019 – Dec 2020

9. RCS to dominate rich messaging landscape, global
P2P USERS AS % OF TOTAL SMARTPHONES, 2018 - 2023
5.7%
14.6%
36.9%
48.8%
63.7%
74.6%
RCS now on a par with
WhatsApp; bigger than
Viber, WeChat &
Messenger
RCS bigger than Skype,
LINE, Kakao Talk,
RCS becomes the largest
rich messaging channel
@Mobilesquared
Total RCS users as
% of total
smartphone users
202020192018 2021 2022 2023

10. RCS to dominate rich business messaging landscape, global
RBM AS % OF TOTAL RCS USERS, 2018 - 2023
@Mobilesquared
A2P users as %
of total RCS
users
58.7%
77.5%
91.0%
93.6%
94.2%
6.2%
2018 2019 2020 2021 2022 2023
RBM
P2P RCS

11. 202220212020
The path to RCS success
The billion x economy
@Mobilesquared
• Brands now have scale, start to
ramp up their investment in RCS
• RCS migrates from experimental
channel to mainstream
• Scale is everything in the billion
X economy
• RCS achieves scale (1.5 billion)
in 2020
• Brands increase spend
• Exponential increase in brands
using RCS

12. RCS engagement touchpoints, Global
A2P / P2A ACTIVITY 2023, PER MONTH
CONSUMERS WILL ENGAGE WITH AT LEAST
ONE BRAND ONCE A DAY BY 2023 VIA RCS
@Mobilesquared

13. Total business messaging (SMS + RCS)
INCOME (US$)
@Mobilesquared
2018 2019 2020 2021 2022 2023
A2P SMS A2P RCS

14. A2P vs P2A spend (US$)
2 YEARS FROM THE HOCKEY STICK GROWTH
@Mobilesquared
2019 2020 2021 2022 2023
Total A2P Total P2A
P2A traffic will dominate
RCS communications in the
long term, with the
majority of revenues
generated from chat. P2A
activity will account for
44% of total RCS spend in
2020, and 60% by 2023.
Per event A2P traffic will
create the foundation for
RCS revenues in the short
term, but will be overtaken
by session/chat in the mid
term and thereafter.
P2A
A2P

15. SMS / RCS ARPU comparison
(Per annum)
US$3.61
1
2
3
4
5
6
US$3.60
SMS
ARPU(US$)
@Mobilesquared
2018 2019 2020 2021 2022 2023
SMS RCS

16. Evolving business models

17. Evolving business model #1
ADVERTISING
• Total global advertising expected to be
worth US$616 billion in 2019 (WARC)
• Mobile advertising worth US$165.7 billion
in 2019 (WARC)
1,579,247,016
4,556,402,582
8,457,512,378
12,368,870,609
16,750,349,701
-
2,000,000,000
4,000,000,000
6,000,000,000
8,000,000,000
10,000,000,000
12,000,000,000
14,000,000,000
16,000,000,000
18,000,000,000
2019 2020 2021 2022 2023
Advertising forecasts based on Kakao Talk’s average ad spend
per user (US$4.13) applied to total P2P RCS users, with average
ad spend per user increasing at 5% year-on-year.
US$
0
1
2
3
4
5
6
7
8
9
10
2023
Termination rate model
0
1
2
3
4
5
6
7
8
9
10
2023
Advertising model
A 10%
redistribution of
mobile
advertising spend
onto RCS would
potentially
generate an ARPU
uplift of 125%.
ARPU
125%

18. Evolving business model #2
Search
• Total paid for search worth US$109 billion
(Zenith)
• App marketing/discovery spend US$64.1 billion
(AppFlyer)
Search forecasts based on 5% of the total average spend on
mobile search per user in the USA, applied to total RCS A2P
user base.
0
0.69
3.38
7.67
12.54
17.68
-
2
4
6
8
10
12
14
16
18
20
2018 2019 2020 2021 2022 2023US$billion
US$
0
1
2
3
4
5
6
7
8
9
10
2023
A <30%
redistribution of
search/app
marketing spend
onto RCS could
generate an ARPU
uplift (compared
to termination
rate model only)
of 139%.
262%
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
2023
ARPU
262%
Termination rate model
Advertising model
Search model

19. Evolving business model #3
CUSTOMER CARE
@Mobilesquared
268,000,000,000calls
US$1,200,000,000,000to be spent on customer care calls in 2019
Source: LivePerson
Average cost of a call: US$4.48
A 1% migration of
customer care call spend
(US$12 billion) onto RCS
would more than double
the projected spend via
termination rates/chat.

20. The potential RCS revenue universe
2023
@Mobilesquared
Customer care –
xx% of a US$1.2 trillion market
RCS termination rate model –
US$11.6 billion from a US$36 billion market
RCS advertising model –
xx% of a US$616+ billion market
RCS search model –
xx% of a US$109+ billion market

21. Why make Mobilesquared your business messaging partner
RCS forecasts covering P2P/A2P launches, P2P/A2P users, Traffic, Income
Split by Mobile operator, Country, Region & OS.
Databook forecasts updated quarterly
Analyst Insight Reports quarterly
RCS MAU tracker (splitting out UP 1.0/UP2.0) for every live RCS market
Upcoming RCS research on impact of digital & search models on total income
We are business messaging specialists, and this is our publishing schedule for 2019:
• A2P SMS 3.0 (May)
• WhatsApp for Business (September)
• Apple’s ABC (November)
databooks@mobilesquared.co.uk
+44 (0) 118 2149 777 / +44 (0) 7976 057 052
www.mobilesquared.co.uk/about-databooks/
CONTACT