Despite its limitations, SMS is the most used feature on today's smartphones. Over 25 years after the first text message, SMS and MMS are finally ready for an upgrade.
Over the last decade, dozens of messaging apps have come to market, with many seeing success — such as WhatsApp‘s $22B acquisition by Facebook, Line‘s $8.8B market cap, or Kik‘s $1B valuation as of 2015.
Even smaller players like GroupMe (acquired by Skype for $85M in 2011) have built successful products in the absence of a universal messaging system.
But in this sea of messaging apps, SMS still reigns supreme.
Despite powerful mobile devices, high-speed wireless internet, and the ubiquity of Wi-Fi, traditional SMS (“short message service”) remains the most widely used feature on smartphones: approximately 97% of smartphone owners use text messaging in a given week, according to Pew Research Center.
However, the next generation of messaging tech is imminent.
Over the next several years, the introduction of rich communication services (RCS) will replace SMS and MMS as the primary messaging system, while offering many of the same features found in today’s most popular messaging apps.
And while consumers will benefit from these advanced messaging features, brands stand to gain the most, as the media-rich capabilities of RCS will allow brands to engage their customers in new and more direct ways.
While we’re still in the early stages of RCS adoption, with only a few key leaders (like Sprint, AT&T, and T-Mobile, discussed below) implementing the technology it requires, RCS is poised to fundamentally change how mobile users engage with each other, brands, and the world around them.
In this explainer, we discuss the history of mobile messaging, the introduction of RCS, what it is, why it matters, and when we can expect to see it widely deployed.
TRACK ALL THE TELCO INVESTORS IN THIS BRIEF AND MANY MORE ON OUR PLATFORM
Telco investors are increasingly active in funding private tech companies. Look for the Telco Investors within the Collections tab.
Track Telco InvestorsThe history of messaging
While SMS technology and standards were first developed in 1982, the first text message wasn’t sent until December 3rd, 1992. The message, sent by Vodafone developer Neil Papworth, simply read, “Merry Christmas.”
Despite this accomplishment, it still took another decade for text messaging to become a legitimate commercial success. Until 1999, the UK banned out-of-network messaging, severely limiting consumers’ ability to contact people using other carriers.
