Operators stand to lose $3 billion in SMS business revenue

A new study from Juniper Research predicts that ‘diminishing quality’ of SMS networks will drive enterprises using mobile business messaging to look at alternative channels for communicating such as OTT messaging apps.

The paywalled research includes forecasts for 60 countries and a dataset of over 24,300 market statistics within a five-year period, some of which it has teased in the press release.

OTT business messaging traffic will reach 375 billion messages in 2028, rising from 100 billion messages in 2023, the research claims, which it calculates will mean about $3 billion in lost revenue for operators related to SMS business messaging.

Rising levels of fraud are resulting in this apparent reduced SMS network quality, and operators’ SMS prices continue to grow to maintain revenue amidst slowing demand for business messaging traffic, claims the report.

It urges OTT app vendors to deploy pricing strategies that attract high-spending enterprises away from established SMS channels in order to capitalise on the apparently plateauing SMS market. ‘These strategies must separate traffic by uses; charging a premium to enterprises for mission-critical traffic, such as MFA (Multi-factor Authentication),’ we’re told.

Meanwhile the report also forecasts an increase in OTT business messaging spend for retail, to the tune of f $790 million in 2023 to over $2.6 billion by 2028 globally. OTT messaging vendors should integrate data from other retail channels into OTT business messaging activities and integrate payment capabilities directly into apps to ‘maximise the channel’s value proposition,’ reckons Juniper.

The selected data seem focussed on what OTT companies should do with the opportunity ahead of them, but for operators obviously the headline stat of $3 billion in potential lost revenues isn’t great news if true.