Mobile Operators to Lose Billions of Messaging Revenue to OTT Apps by 2023

Mobile Operators to Lose Billions of Messaging Revenue to OTT Apps by 2023

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A new Juniper Research study has revealed that mobile operators will lose out to OTT business messaging providers such as Messenger, WeChat, and WhatsApp to the tune of $2.5 billion next year, an increase of 20% over 2022. The report found that promotional messages will account for 30% of this revenue loss in 2023, with enterprises embracing up-selling and cross-selling capabilities through rich-media marketing campaigns.

The A2P Messaging market report found that the total number of SMS business messages sent will reach 1.7 trillion in 2023; growing from 1.6 trillion in 2022, as enterprises capitalize on the channel’s impressive open rates and unrivaled subscriber reach. It identified that the use of SMS will remain particularly strong in the retail sector, with operator-led messaging channels in multi-factor authentication increasing in tandem with the growth of eCommerce.

Despite the popularity of third-party OTT applications, the report found that the total number of operator‑led RCS (Rich Communication Services) business messages sent will also increase, from 161 billion in 2022 to 219 billion in 2023. It urges network operators to move away from the turbulent monetization models used for SMS, as fluctuations in RCS pricing will limit enterprise adoption of operator-led rich media messaging. The study found that volatile RCS pricing will encourage the establishment of grey routes, with lucrative business messages concealed and transmitted within cheaper interpersonal channels.

“In order to support the growth of RCS business messaging, operators must ensure that pricing remains profitable without dramatic increases. Operators must absorb the initial cost of rich media messaging, using digital advertising and sponsorships to secure a return on investment,” remarked research author Scarlett Woodford.

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