During the recent MEF CONNECTS Business Messaging in Dublin, Senior Research Analyst at Juniper Research Elisha Sudlow-Poole delivered a keynote analyst presentation, shedding light on insights into the opportunities afforded by SMS business messaging. Here she shares her top takeaways from the session, and how the industry can support future growth.
As business messaging via omnichannel becomes increasingly important for brands and enterprises to connect with consumers, it has caused a proliferation in the use of rich messaging channels such as RCS (Rich Communication Services) and OTT (Over the Top) messaging apps, including WhatsApp and Viber.
However, while these messaging channels will provide a key avenue for rich communications, Juniper Research forecasts that SMS will remain the dominant business messaging channel; accounting for 85% of total business traffic in 2023 and decreasing to only 71% by 2027.
There are two major reasons for this:
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Regional Fragmentation
OTT messaging apps face regional fragmentation as each app has its own popularity in specific countries, and not every mobile subscriber has an OTT app downloaded. This not only limits the outreach of these channels, but also means that enterprises must ensure that they know specifically which app is most popular where – and among who.
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RCS Interoperability Challenges
RCS technology was initially introduced as an operator-driven specification process that required widespread agreement between numerous different network operators, but it initially struggled with support from OEMs – and has since struggled to deliver significant widespread adoption.
Given the channel’s impressive open rates and unrivalled subscriber reach, SMS holds the largest addressable user base compared to OTT and RCS messaging channels in 2023, as there is no third-party download requirements or setting switching..
With the total number of SMS business messages sent forecast to grow by 26% over the next five years, MNOs (Mobile Network Operators) are now looking to deploy SMS more strategically to maximise its return on investment.
In particular, MNOs are wanting to secure their revenue through the implementation of security and traffic identity procedures including firewalls that are either developed in-house or leveraged via a third party.
This will ensure the accurate identification of SMS messaging traffic and reduce revenue leakage to grey routes.
Despite the prevalence of fraud over SMS increasing and the ongoing pressures to onboard a plethora of established messaging channels, or else risk the loss of customers, the value of SMS can still be realised owing to three key elements:
- Familiarity
- Reliability
- Ubiquity
Given the channel’s impressive open rates and unrivalled subscriber reach, SMS holds the largest addressable user base compared to OTT and RCS messaging channels in 2023, as there is no third-party download requirements or setting switching.
As all devices are required to have a native SMS client on them out of the box, this also guarantees unlimited market ubiquity. Lastly, as both enterprise and mobile subscribers are familiar with the functionality of SMS, this creates a sense of trust and loyalty.
With this, Juniper Research does not anticipate that newer business messaging channels such as RCS and OTT will cannibalise the traffic from SMS use cases; instead, they are simply creating new use cases that are not possible over SMS, such as conversational commerce – a complementary approach that, ultimately, can only be a positive thing for consumers and the wider business messaging space.
For more business messaging insights, download Juniper Research’s full whitepaper, ‘SMS: Simplicity Means Success’.
MEF members get 15% off Juniper Research’s entire messaging portfolio, including its latest research on A2P Messaging, Mobile Messaging, OTT Business Messaging, and RCS Business Messaging. Simply contact us to get your discount code before 30th June 2023!
Watch MEF CONNECTS Business Messaging 2023 in Full
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