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MNOs to lose $3bn in SMS revenues to OTT business messaging

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Mobile network operators are expected to lose more than $3 billion in SMS business messaging revenue globally to OTT channels over the next five years, as OTT business messaging traffic rockets in use.

According to Juniper Research, OTT business messaging is set to reach 375 billion messages in 2028; rising from 100 billion messages in 2023. More troubling, the study predicts that diminishing quality of SMS networks will drive enterprises using mobile business messaging to explore alternative channels, including OTT messaging apps. As a result, operators are expected to lose more than $3 billion SMS business messaging revenue globally to OTT channels over the next five years.

Find out more about the new report, Global OTT Business Messaging Market 2023-2028, or download a free sample.

Pricing key to OTT business messaging growth

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 MFA (Multi-factor Authentication).

Retail to experience substantial OTT messaging growth

The report forecasts a large increase in OTT business messaging spend 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’ eCommerce 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.

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