HomeFinancial/RegulationTelco’s text money is stifled by OTT apps - Juniper Research

    Telco’s text money is stifled by OTT apps – Juniper Research


    Zuckerberg and co are ROFL

    Business messages are going ‘over the top’ on WhatsApp while SMS, in text speak, could soon be ADBB (all done bye bye) if current trends persist, says Juniper Research. Over the top (OTT) messaging, as organised by social media companies such as Facebook, has tripled in the last five years, while the use of the Short Messaging Service (SMS) is becoming a dated tradition. The trend represents another movement of revenues out of the hands of telcos and into the hands of tech companies.

    In its latest forecast, Juniper predicted that global OTT business messaging traffic will increase from 93 billion messages to 254 billion by 2027, representing a 172% rise. According to the researcher, the growth will be driven by “increased availability of open OTT messaging APIs [application programming interfaces] and competitive pricing models”, which will create “a viable rich media alternative to established operator-led channels, such as SMS”.

    Pricing is perceived as the biggest motivator for enterprises to switch from operator-led messaging channels, reported Yanitsa Boyadzhieva, Deputy Editor of TelecomTV. Operator led channels include SMS and rich communication services (RCS), while OTT messaging apps are a broad church comprising many faiths, including Facebook’s Messenger and WhatsApp, Tencent’s WeChat and Rakuten’s Viber. 

    For end users, OTT is a cheap alternative to SMS and RCS messaging, while for enterprises, OTT platforms cut costs, since businesses are not being charged per message or conversation from operators. “The volatility in wholesale SMS business messaging pricing provides an opportunity for OTT messaging platforms to grow their revenue, by offering stability for CPaaS [communications-platforms-as-a-service] platforms when negotiating traffic subscriptions with enterprises,” said Juniper Research author Elisha Sudlow-Poole. The pricing model of OTT messaging is identified as being “consistently low” and “far less volatile” compared with SMS, Juniper Research argued.

    High-spending enterprises are expected to increasingly use OTT business services for their advanced security, rich media properties and features like brand authentication. The use of strict channel verification systems by OTT messaging service platform operators will be critical in ensuring communications are not prone to “the same fraudulent activity found on channels such as SMS”.