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Mythbusters - iGaming

Business Messaging: Are you ready for the huge market rearrangement? 

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Messaging has changed and is set to be one of the biggest traffic sources for telcos worldwide. But what how has it changed and where is it heading? Andreas S Constantinides takes a look and outlines where the opportunities lie

The Telco industry is like New York – it never sleeps. Whatever new happens in technology, Telcos, most of the time, get the most out of it.

Voice, premium, payments, SMS, OTT, ‘white routes’ – messages that originate and terminate legally – ‘grey routes’ – SMS between two parties or countries which is legal for one party at one end but is illegal for the other party at the other end – any other kind routes; everything new constitutes a massive opportunity for telco players.

The competition among the popular telecommunication products and services is ruthless and, with the margins on voice now lower than ever, the moment for telcos to explore new potential opportunities with higher profit and promising future is now.

And the next segment seems to attract their attention is “Business Messaging”.

The whole messaging revolution started some three years ago and is set to be the next big thing for telcos. The rearrangements made by RCS and OTT players looks like the most excellent opportunity for Telcos to keep the business running on higher revenues.

Nowadays, voice players perform business plans for messaging, examine alternatives to enrich their business and take the advantage to get aware of all “nasty” details concerning SMS, RCS, the new aspiring OTT players and the whole forthcoming messaging evolution.

But what happens with all those players: is the market already too segmented?  What will be the future of SMS after this massive OTT invasion and is there a significant space for new messaging players?

A glance is enough to notice that messaging growth is more evident than ever. No matter the rumors for the struggle of SMS with the RCS and the OTT players in the last three years, all researches for the decade 2020-2030 proves that SMS will remain the King of A2P messaging.

To cut a long story short, the messaging market doesn’t seem to be shrink, or divide among those players. All researches prove that the new players will contribute to increasing business messaging and market volumes. On top of the one-way A2P messaging, the P2A messaging is added.

And by 2024, this new P2A trend will launch the 2way business communication to trillion of new messages.

The messaging evolution

The messaging industry – taking both SMS and predicted RCS traffic into account – is predicted to grow from 1.55 trillion messages of A2P traffic in 2018 and to surpass the 2 trillion mark by 2023.

For the period 2018 – 2023, these two media indicate a total growth of SMS/RCS of 26.59%, with an average increase of 5,32% per year. For the current period 2020 – 2023, the traffic is estimated to be even higher, with an average growth of 5,73% per year.

SMS White traffic – White traffic is communications that originate and terminate legally and are the primary source of revenue for MNOs providing A2P SMS services. The costs for completely legal, white routing, operations are higher and, when companies use grey routes for communications, it bleeds revenue from these approved providers.

SMS white traffic is set to peak in 2021 with 1.15 billion messages.  The total growth for the period 2018-2023 is estimated to 7.20%, with average growth 1.44% per year.

In the prediction, this peak of 2021 is falling with average growth for the current period 2020-2023 estimated to 0.22%.

SMS Grey traffic – SMS grey traffic is between two parties or countries which is legal for one party at one end but is illegal for the other party at the other end. It is basically a way of sending SMS where two operators or entities do not have a commercial relationship or agreement.

The SMS grey traffic for the period 2018-2023 is estimated to fall by 15.80% with an average loss of -3.16% per year. The fall of the grey SMS traffic will be increased for the current period 2020-2023, with an average loss of -3.79% per year.

SMS Traffic in Total (white & grey) – In the prediction, this peak of SMS traffic in total is noted in 2021, with 1.68 billion SMS. Due to the fall of the grey traffic, the SMS traffic for the period 2018-2023 estimated to fall by -1.29%, with an average loss of -0.26% per year.

For the current period 2020-2023, the fall of the SMS traffic will be increased with an average loss of -1.23% per year.

RCS evolution

Google’s Holy Grail, RCS, seems to be moving with low volumes, but with significant development for the next three years. 

SMS moves to RCS 2018-2023 – The SMS traffic that moves to RCS from 2018 to 2023 estimated to 480 million messages. However, the period of 2018-2019 indicates a significant low RCS traffic. The average growth for the current period 2020 – 2023 estimated to 734,63% per year.

Additional RCS traffic evolution 2018-2023 – The additional RCS traffic for the period of 2018-2023 estimated to 240 million messages.  The average growth for the period 2020- 2023 estimated to 2114.34% per year.

Total RCS evolution 2018-2023 – RCS seems to be started and moving with low rates for 2018-2020. However, the total RCS traffic for the period of 2018-2023 estimated to 721 million messages. The average growth for the period 2020-2023 estimated to 856.91% per year.

OTT evolution

The data provided for messaging traffic from Viber and WhatsApp is weak. Viber usually does not provide traffic information in general; however, Viber’s executives had the courtesy to give a few statistics about the channel.

On the other hand, WhatsApp development, according to Mobilesquared, presenting a magnificent API development with 55k brands involved by 2024, almost ten times more than Viber.

What about WhatsApp?

WhatsApp is trying to transform its API to the most popular P2A messaging channel, and considering the number of its users, it will succeed it. While SMS remains the King of Messaging, WhatsApp seems to be the Queen of P2A.

WhatsApp Worldwide Users Evolution

2018 – 1.71 billion users

2019 – 1.96 billion users

2020 – 2.2 billion users (45.5% of smartphone users)

2024 – 3.1 billion users (59.7% of smartphone users

WhatsApp Business API Evolution (For Medium & Large Enterprises)

2019 – WhatsApp Business API – 992 (less than a thousand)

2024 – WhatsApp Business API – 55.000

Market WhatsApp Total Spend (USD)

2019 – $38.7 million

2024 – $3.6 billion

Market Spend Breakdown

Asia – 30%

Europe (West-East) – 25%

America (North-Latin) – 24%

Rest Markets – 21%

Viber evolution

According to Viber, the channel holds more than 4,000 registered sender IDs globally.

Viber top 10 markets are Russia, Ukraine, Belarus, Greece, Bulgaria, Serbia, Croatia, Hungary, Philippines, Iraq.

Since Viber Business Messages in 2016 lunched, the average growth of registered brands (Sender IDs) is 30% yearly.

Regardless of the delays, the technicalities, and the vague trade policies of those new media, the new business messaging opportunities are just around the corner.

For the first time in the history of business messaging, wholesalers flirting with enterprise messaging seriously. Aggregators are dealing with CPaaS and OMNI-Channel Messaging platforms, specially made for marketers and brands. Voice executives are trying to understand the messaging market to have the chance to be part of it.

The proper time for the “new” messaging players to enter the game is now.

How to get ahead in messaging

If you are interested as a telco in exploiting the new paradigms in messaging, but you are not sure how to do that, here are some quick, valuable tips:

  1. Deal with reliable Messaging Experts.
  2. Evaluate your Current Market Position.
  3. Advice researches concerning the countries of your interest.
  4. Explore Enterprise Messaging Market & Omni-Channel Solutions
  5. Evaluate the cost of creating your team and the cost of assigning the management of the required operations to third parties.
  6. Ensure your Investment with the proper Interconnections and reliable Partnerships.

Even if we exclude the significant presence and development of Viber and WhatsApp, the landscape of SMS & RCS messaging, as is proven by numbers, seems more promised than ever. The global revenues prediction for A2P SMS & RCS messaging is estimated from $32.3 billion in 2019 to $50.3 billion to 2023, with significant growth for this period, more than 55%.

Author

Andreas S. Constantinides, Messaging Expert and Senior Messaging Consulting at Global Telco Consult

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