Wednesday, 10 June 2015 01:06

Messaging: 200% traffic increase but revenues to decline by $600 million Featured

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Revenue from the messaging market is set to decline by $600 million over the next 5 years according to Juniper Research despite big traffic from WhatsApp et al.

Thanks to OTT (over the top) messaging applications using data, such as WhatsApp, LINE and others nearly doubling by 2019, and with near tripling on message traffic from 31 trillion in 2014 to 100 trillion by 2019, the landscape is massively changing.

However, despite all this messaging growth to come, Juniper Research thinks the ‘messaging market will decline from $113.5bn in 2014 to $112.9bn in 2019 – a reduction of $600m.’

We’re told it is important to note that ‘the revenue generated from each OTT message is forecast be less than 1% of that from SMS and MMS in 2019.’

So, what should OTT providers do?

Juniper suggests through its latest research, 'Mobile & Online Messaging: SMS, RCS & IM Markets 2015-2019', which the company no doubt hopes you’ll buy, that ‘that OTT messaging services are facing a struggle to monetise services.’

Combine this with users ‘switching from SMS and MMS services,’ and a contraction in the overall revenue pot is predicted.

It turns out that ‘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.’

But even messaging behemoths can find a way to make money, with items like ‘sticker sets’ being new in-app purchase content as is the case with sticker set purchases in some markets by end-users.

We’re also told that ‘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’.’

So, it is about revenues, or traffic? Juniper says revenues.

A brief history lesson:

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 from Juniper’s presentation 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.

You can find a copy of Juniper’s 'Sending out an SMS' detailed white paper here, while the research firm clearly hopes you'll buy its report. 


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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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