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Network SMS revenues to slump as enterprises turn to OTT apps

Staff Reporter
November 13, 2023

Over The Top business messaging traffic will surge to 375 billion messages by 2028, up from the 100 billion messages recorded so far 2023 according to Juniper Research. 

This means telecommunication operators will collectively lose around $3 billion in SMS business messaging revenue globally within the next five years, as businesses increasingly transition to OTT platforms, says Juniper.

This growth in OTT apps is attributed to the drop in SMS usage as enterprises look for alternative applications to conventional SMS which is increasingly being used by fraudsters.

As SMS usage is dropping, operators are raising SMS prices to sustain their revenue in the face of a slowdown in demand for business messaging traffic.

OTT apps such as Whatsapp are increasingly being used by enterprises over SMS – Juniper Research

Juniper’s report emphasises the need for OTT app providers to implement pricing strategies designed to lure high-spending enterprises away from conventional SMS channels. These strategies should involve tiered pricing, with enterprises being charged a premium for mission-critical traffic, such as Multi-factor Authentication (MFA).

The report anticipates a substantial increase in spending on OTT business messaging within the retail sector, which is projected to grow from $790 million globally in 2023 to over $2.6 billion by 2028. It advises OTT messaging providers to integrate data from other retail channels into their OTT business messaging operations. By doing so, these providers can position their applications as integral channels for retailers’ e-commerce strategies.

“To fully leverage this potential, OTT messaging vendors must incorporate payment capabilities directly into their applications to enhance the channel’s overall value proposition” says Juniper.

Juniper drew its conclusions from more than 24,300 market statistics spanning five years. Download a sample HERE

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