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If you’re about to send a message to friend or loved one, there’s a good chance that the words “Compose SMS” are nowhere to be found. With hundreds of OTT (Over-the-top) messaging applications such as Whatsapp, Facebook Messenger and BBM at their fingertips, mobile users are defaulting to OTT-messaging as a replacement to traditional SMS and MMS.
A recent study conducted by Juniper Research reveals that mobile messaging traffic is set to double by 2019. This increase is driven by the use of OTT-messaging applications, which will see traffic soar from 31 trillion messages in 2014 to a predicted 100 trillion in 2019. Digitaltrends.com reports that the rise in usage of alternative messaging apps is largely due to the fact that sending messages on these platforms is typically free.
Traditional messaging services like SMS and MMS 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.
According to Juniper, 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. In these markets, messaging services have relied upon in-app purchases such as sticker sets to generate income.
With 2019 only four years away, the industry has been set a challenge: Optimise monetisation of advertising and payments in OTT-messaging applications, or see revenues decline by $600m despite the surge in traffic.