According to a report by Juniper Research, telecom operators are expected to lose over $3 billion in SMS business messaging revenue globally to over-the-top (OTT) messaging channels over the next five years. It found that OTT business messaging traffic will reach 375 billion messages in 2028, rising from 100 billion messages in 2023.
As per the report, the diminishing quality of SMS networks will drive enterprises using mobile business messaging to explore alternative channels, including OTT messaging apps. Reduced SMS network quality is being driven by the rising prevalence of fraud, whilst operators’ SMS prices continue to grow to maintain revenue amidst slowing demand for business messaging traffic. To capitalise on this plateauing SMS market, the report urges OTT app vendors to deploy pricing strategies that attract high-spending enterprises away from established SMS channels. These strategies must separate traffic by uses; charging a premium to enterprises for mission-critical traffic, such as multi-factor authentication.
The report forecasts a large increase in OTT business messaging spending for retail from $790 million globally in 2023 to over $2.6 billion by 2028. It urges OTT messaging vendors to integrate data from other retail channels into OTT business messaging activities. In doing so, these vendors can position their apps as a key channel for retailers’ e-commerce strategies. To maximise the potential in this space, it is imperative that OTT messaging vendors integrate payment capabilities directly into apps to maximise the channel’s value proposition.