OTT Apps to Eat $2.5 Billion of Business Messaging Revenues of Telcos: Juniper Research

The Cellular Operators Association of India (COAI) has pushed for the regulation of OTT communication apps in the country. This is because they offer the core communication services that telecom operators provide as well. So while they are competing in a sense, the OTT apps don't need to follow regulatory norms and also don't need to pay licensing fees. 

Highlights

  • The OTT (over-the-top) communication applications such as WhatsApp, WeChat, and Messenger are going to leave a dent in the revenues of mobile or telecom operators in 2023.
  • More and more businesses are leveraging OTT communication platforms to communicate internally and with customers.
  • A new Juniper Research suggests that mobile operators are going to lose around $2.5 billion in business messaging revenues.

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The OTT (over-the-top) communication applications such as WhatsApp, WeChat, and Messenger are going to leave a dent in the revenues of mobile or telecom operators in 2023. More and more businesses are leveraging OTT communication platforms to communicate internally and with customers. A new Juniper Research suggests that mobile operators are going to lose around $2.5 billion in business messaging revenues. This will be an increase of 20% over 2022. Enterprises have started leveraging social media platforms for up-selling and cross-selling to customers via rich media marketing campaigns. According to the report, promotional messages will account for 30% of the revenue loss in 2023.

However, not everything is bad for telecom players. The Juniper Research report mentioned that RCS (Rich Communication Services) pricing would be the key to maintaining competition with the OTT apps. Operator-led RCS business messages will increase from 161 billion in 2022 to 219 billion in 2023. The report also mentions that business SMS will continue to maintain its dominance in the retail sector, with operator-led messaging channels in multi-factor authentication increasing in tandem with the growth of eCommerce.

The report added, "Volatile RCS pricing will encourage the establishment of grey routes, with lucrative business messages concealed and transmitted within cheaper interpersonal channels."

What's Happening in India Related to OTT Communication Apps

The Cellular Operators Association of India (COAI) has pushed for the regulation of OTT communication apps in the country. This is because they offer the core communication services that telecom operators provide as well. So while they are competing in a sense, the OTT apps don't need to follow regulatory norms and also don't need to pay licensing fees.

The new draft telecom bill includes a scope to regulate the OTT apps. The Indian government's stance on the matter is that it wants consumer safety out of regulating OTT communication apps such as WhatsApp and not invading the privacy of its citizens.

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