• Mobile messaging revenue will increase from $87b in 2020 to $88b in 2025.
• SMS messaging revenue will fall from $66b in 2020 to $61b by 2025.
• Total number of mobile messages sent will increase by 11% from 163tr in 2020 to 182tr in 2021.
• 58% of mobile messaging traffic in 2021 will be sent over OTT messaging applications such as Facebook Messenger, WeChat and WhatsApp.

Telecom operators will need to accelerate investment into rich media technologies such as Multimedia Messaging Service (MMS) and Rich Communication Services (RCS) to offset the loss of Short Message Service (SMS) revenue over the next five years.

They need to capitalise on premium pricing and advanced anti-fraud standards over these messaging channels to accomplish it.

Juniper Research forecast that global operator-led mobile messaging revenue will increase from $87 billion in 2020 to $88 billion in 2025.

However, SMS messaging, a long-established revenue source for operators, will fall from $66 billion in 2020 to $61 billion by 2025; owing to declining P2P traffic.

The total number of mobile messages sent will increase from 163 trillion in 2020 to 182 trillion in 2021; representing a growth of 11 per cent.

Juniper Research forecasts that 58 per cent of mobile messaging traffic in 2021 will be sent over OTT messaging applications such as Facebook Messenger, WeChat and WhatsApp, with consumers and enterprises alike recognising the benefits of rich media messaging.

OTT apps remain most popular format

The total number of mobile messages sent will increase from 182 trillion in 2021 to 223 trillion by 2025, with OTT messaging applications remaining the most popular messaging format over the next four years.

Scarlett Woodford, Research Analyst at Juniper Research, said that operators will take advantage of the growing interest in omnichannel strategies to foster increased investment in rich media messaging standards, including RCS and MMS.

RCS is the next-generation SMS protocol supported by GSMA, Google and Android, Samsung, and many carriers and mobile phone manufacturers.

The ability of RCS to authenticate enterprises directly will provide more efficient anti-fraud detection and mitigation of mobile business messaging traffic over established SMS traffic analysis.

“Authenticating the source of messaging traffic via RCS is far more efficient at eliminating fraudulent traffic routes than traditional firewalls. However, RCS traffic must still be monitored for malicious and unwanted content. A failure to do so will diminish the value of rich media messaging services in the future,” she said.

Whilst P2P communication will continue to migrate to OTT messaging applications, Woodford suggests that the ubiquity of SMS will preserve its relevance in A2P use cases.

“With high open rates and the ability to reach large numbers of users, SMS is the ideal tool for communicating mission-critical traffic to large numbers of consumers. Even when RCS adoption accelerates, SMS will remain a crucial avenue for businesses to reach customers on both Android and iOS devices,” she said.

Moreover, she said that Google is clearly moving aggressively in the RCS space, whilst also prioritising collaboration with operators, and likely to use RCS as a strategy to develop and promote Android services; removing the benefit of iOS over Android.

Apple unlikely to follow RCS format

At present, the exclusivity of iMessage is likely to influence a user’s decision to opt for an iOS device, rather than an Android competitor; representing a unique selling point for Apple.

“Supporting the RCS protocol would devalue Apple’s iMessage service; enabling iOS users to communicate with Android users in a rich way previously restricted to their iOS counterparts. This may lead to customer attrition, with users no longer dependent on iOS devices to interact with their contacts in a rich way over a native messaging application,” she said.

Juniper Research believes that Apple is unlikely to announce its support for RCS in the short-to-medium term, to protect the value of its iOS-native iMessage application.