Surge in Over-the-Top Messaging
A recent study by Juniper Research has highlighted a significant rise in Over-the-Top (OTT) business messaging. Predictions indicate an exponential increase from 100 billion messages in 2023 to an estimated 375 billion by 2028. This shift is primarily driven by declining SMS network quality, leading businesses to seek alternative communication channels.
Declining SMS Quality Spurs OTT Growth
The deterioration of SMS network quality, plagued by increasing fraud and higher SMS prices set by operators, is catalyzing the transition to OTT messaging. Operators have been raising SMS prices to maintain revenue amidst decreasing demand for business messaging traffic.
Operators Facing Revenue Losses
The report projects a substantial loss for global operators, over $3 billion in SMS business messaging revenue, to OTT channels within the next five years. This shift represents a significant challenge to traditional telecom business models.
Strategic Pricing in OTT Messaging
The growth of OTT business messaging lies in effective pricing strategies. As the SMS market reaches a plateau, OTT app vendors are encouraged to adopt pricing models that attract high-spending enterprises. This includes varying charges based on usage, with premium rates for critical services like Multi-factor Authentication (MFA).
Retail Sector as a Key Player
Retail is identified as a major player in the OTT business messaging market. The report anticipates a substantial increase in retail spending on OTT messaging, from $790 million globally in 2023 to more than $2.6 billion by 2028.
Integration Strategies for OTT Vendors
The study advises OTT messaging vendors to incorporate data from various retail channels into their business messaging strategies. This integration positions OTT apps as essential tools in retailers’ eCommerce strategies. The report also underscores the importance of integrating payment capabilities directly into OTT messaging apps, significantly enhancing their appeal and functionality.
The landscape of business messaging is rapidly evolving, with OTT channels gaining a competitive edge over traditional SMS services. This trend not only signals a shift in communication preferences but also marks a pivotal change in the telecom industry’s revenue models, especially for global operators.