Operators to Lose $3 Billion to OTT Messaging Channels by 2028

OTT business messaging traffic will reach 375 billion messages in 2028; rising from 100 billion messages in 2023, according to Juniper Research. Their study predicts that the 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 over $3 billion in SMS business messaging revenue globally to OTT channels over the next five years.

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 capitalize 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).

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 maximize the potential in this space, OTT messaging vendors must integrate payment capabilities directly into apps to maximize the channel’s value proposition.