The projection that over-the-top (OTT) business messaging traffic will reach 375 billion messages in 2028, rising from 100 billion messages in 2023 is expected to diminish the quality of SMS networks, by so doing costing telecoms operators in Nigeria and other parts of the world a loss of over $3 billion SMS business messaging revenue in the next five years.
Juniper Research, in a new study, said pricing was Key to OTT business messaging growth, noted that 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.
An OTT media service (also known as a streaming platform) is a media service offered directly to viewers via the Internet. OTT players include Amazon, Netflix, WhatsApp, Skype among others.
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).
While it said retail would experience substantial OTT messaging growth, Juniper 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 urged OTT messaging vendors to integrate data from other retail channels into OTT business messaging activities. In doing so, it said these vendors could position their apps as a key channel for retailers’ eCommerce strategies.
According to it, to maximise the potential in this space, OTT messaging vendors must integrate payment capabilities directly into apps to maximise the channel’s value proposition.
Recall that Nigerians exchanged over 25.93 billion text messages locally in 2022.
Statistics from the Nigerian Communications Commission in its ‘2022 Subscriber/Network Data Report’ showed that there was a 28.82 per increase in the total number of text messages sent and received on a year-on-year basis.
The report further showed that about 14.09 billion SMS messages were sent, and about 11.84 billion were received.
It was also disclosed that MTN recorded the highest number of text messages exchanged.
The report read in part, “The total number of national SMS both sent and received as of December 2022 was 25,928,704,567. This is an increase of 28.82 per cent from that of the total SMS sent and received in the year 2021 which stood at 20,126,551,822 SMS.
“There was a 48.84 per cent increase in the number of SMS sent in the year 2022 compared to the year 2021. Conversely, the year 2022 count of received SMS also increased by 11.06 per cent higher than that of year 2021.
“In the year 2022, MTN recorded the highest count of SMS received and sent which stood at 8,738,690,150 and 8,323,722,485, respectively.”
The report also revealed that International SMS sent as at December 2022 was 59,571,547 while the total number of SMS received was 459,329,782.