A Juniper Research study has identified a major rise in Over-the-Top (OTT) business messaging, driven by weakening SMS network quality and shifting enterprise preferences.
According to the report, OTT business messaging volume is expected to grow from around 100 billion messages in 2023 to approximately 375 billion messages by 2028. This rapid expansion is largely attributed to enterprises moving away from traditional SMS because of network issues and economic pressures.
Juniper Research links the deteriorating quality of SMS services to a combination of growing fraud and rising operator prices. As demand for SMS-based business traffic slows, operators have increased rates to protect revenue, which in turn encourages businesses to seek alternative messaging channels.
The study projects that global operators could lose more than $3 billion in SMS business messaging revenue to OTT channels over the next five years as enterprises transition to these newer platforms.
Pricing will be crucial to OTT vendors looking to capture this migrating demand. With the SMS market reaching a plateau, the report advises OTT app providers to adopt pricing models designed to attract high-value enterprise customers that historically relied on SMS.
Recommended pricing tactics include differentiated rates for different use cases, with the potential to charge a premium for mission-critical traffic such as multi-factor authentication (MFA), where reliability and security command higher value.
Retail stands out as a major growth area within OTT business messaging. Juniper Research forecasts that global retail spending on OTT messaging will increase from $790 million in 2023 to more than $2.6 billion by 2028, reflecting retailers’ growing reliance on messaging for customer engagement and commerce.
To capitalise on this opportunity, the report encourages OTT messaging providers to integrate data from multiple retail channels into their messaging platforms. Positioning OTT apps as central to retailers’ eCommerce strategies — including embedding payment capabilities directly into messaging experiences — can significantly strengthen their value proposition.
Juniper Research’s full report is available (paywall).
Photo by Adem AY on Unsplash
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