Overall, messaging traffic is forecast to double by 2019. This is driven by OTT (over-the-top) messaging applications, such as WhatsApp and LINE, seeing a threefold increase in message traffic – from almost 31 trillion in 2014, to 100 trillion by 2019 globally.
Importantly, the revenue generated from each OTT message is forecast be less than 1% of that from SMS and MMS in 2019.
OTTs Diversify to Monetise
Juniper’s latest research, Mobile & Online Messaging: SMS, RCS & IM Markets 2015-2019, found that OTT messaging services are facing a struggle to monetise services. Combined with users switching from SMS and MMS services, this will contribute to a contraction in the overall revenue pot.
OTTs have not yet succeeded in using advertising at scale to monetise their services, due to a limited acceptance by consumers, particularly in Asian markets. In these markets, messaging services have relied upon in-app purchases such as sticker sets to generate income.
OTT players are now seeing further diversification with a foray by several big players into the payments market for example, LINE Pay, Facebook’s use of Messenger to send payments, and Snapchat’s ‘Snapcash’.
It’s about Revenues, not Traffic
Traditional messaging services from MNOs (mobile network operators) have long since been viewed as under threat from OTT offerings. However, in terms of revenues, SMS still continues to dominate the market, with MNOs benefiting from growth in the A2P (application to person) sector.
Other Key Findings Include:
- A2P SMS will generate significant growth over the next five years, as enterprise messaging sees considerable uptake in the form of two-step verification, and notification services.
- User concerns regarding privacy will aid A2P SMS growth – with secure message delivery and reliability being key.
The whitepaper, Sending Out An SMS…, is available to download from the Juniper Research website together with details of the new research and interactive dataset.
Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary