MESSAGING & ENGAGEMENT
These features, it predicts, will enhance the consumer experience; attracting high-spending users to engage in further commerce activity.
OTT messaging apps, being standalone platforms, can move quickly to integrate new technologies, including AI-based personalisation for cross-selling
and upselling opportunities. This will be imperative in highspending industries such as retail, as OTT messaging apps will be deployed as part of an omnichannel marketing strategy alongside messaging channels like RCS. It is also unlikely to have an immediate impact on SMS. Juniper believes that SMS is set to account for 70% of mobile-based authentication spend by 2025 – despite SMS authentication traffic predicted to only rise 4% next year (see panel).
BRACE FOR IMPACT
Source: Juniper Research, Global A2P messaging market 2024 to 2028]
However, Fabrizio Salanitri, CEO at HORISEN, believes that RCS is poised to have a notable impact on other messaging channels, particularly WhatsApp. “[One] significant advantage RCS holds over OTT messaging platforms like WhatsApp is its integration with mobile network operators’ infrastructure, potentially offering enhanced data security and privacy,” he explains. “While WhatsApp encrypts messages end-to-end to protect user privacy, concerns have been raised about its data-sharing
SMS still a winner for authentication – for now Despite the rise in rich business messaging, SMS still has a big role to play in the messaging market. It may be tainted by AIT and other frauds, but it still underpins authentication traffic. The latest data from Juniper Research finds that SMS is set to account for 70% of mobile-based authentication spend by 2025, beating all others such as flash calling and APIs – and despite SMS authentication traffic predicted to only rise 4% next year. The analysts predict that, despite market pressures, including rising SMS fraud and increasing termination charges, SMS will remain enterprises’ most used technology to authenticate and identify their users over the next five years. The new research, which assessed technologies including SMS, flash calling, verification APIs and mobile identity solutions, forecasts SMS traffic will reach 1.4 trillion messages by 2025; growing from 1.2 trillion in 2023. However, operators face challenges from thirdparty services, the report says. It has identified
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the launch of third-party authentication services over OTT apps as the biggest threat to operators’ authentication SMS revenue. As SMS prices continue to rise, the value of the service amongst enterprises will decline, with some businesses already migrating their authentication traffic to OTT messaging applications. Over the next five years, the report forecast operators will lose $2.8 billion of authentication revenue to OTT channels, including WhatsApp and Viber. To minimise losses, operators must urgently reassess SMS pricing against competing channels, including OTT messaging apps, or risk losing further authentication revenue. Flash calling, in which a missed call replaces a monetisable SMS message, has experienced significant traction over the past two years. However, operators now block this through partnerships with third party messaging firewalls with the aim of keeping authentication traffic over established SMS channels, further increasing the reliance on SMS for authentication.
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practices with parent company Facebook and its susceptibility to security vulnerabilities. “In contrast, RCS leverages the existing security measures implemented by mobile operators, such as network-level encryption and secure authentication protocols. This integration with mobile networks could instill greater confidence among users and businesses regarding the security and privacy of their communications.” Salanitri believes that, as RCS gains traction as a secure messaging channel, businesses may gravitate towards it for sensitive communications, such as financial transactions, personal information exchange, or healthcarerelated interactions. The inherent security features of RCS could position it as a more trustworthy alternative to OTT messaging platforms like WhatsApp, particularly in industries where data security and regulatory compliance are paramount. Another compelling argument for RCS’s impact on other messaging channels is its native availability on mobile devices. Unlike OTT apps that require users to download and install additional software, RCS is integrated directly into the default messaging app on many Android devices, offering a seamless and familiar user experience. This native integration ensures widespread accessibility to RCS features without the need for third-party apps or additional installations. “In contrast,” says Salanitri, “platforms like WhatsApp require users to download and install the app separately, potentially creating barriers to entry for users who prefer to use native messaging apps or who are reluctant to install additional software due to storage constraints or privacy concerns. With RCS being pre-installed on many Android devices, users may find it more convenient to use RCS for everyday communication, gradually shifting away from standalone OTT messaging apps like WhatsApp.”
