The global messaging market will decline to US $112.9 billion in 2019 from US $113.5 billion in 2014, according to a report. However, overall messaging traffic is expected to double by 2019. This trend is being driven by OTT messaging applications such as WhatsApp and Line, which have seen a threefold increase in message traffic to 100 trillion by 2019 globally from almost 31 trillion in 2014. Revenue generated from each OTT message is forecast be less than 1 percent of that generated by SMS and MMS in 2019.

Tarifica’s Take

While the free or low-cost offerings of OTT messaging providers are causing users to switch from SMS and MMS, OTTs are having trouble generating revenue with these services, and SMS and MMS still drive most of the messaging revenue worldwide, even though the sector is shrinking. In particular, MNOs are benefiting from growth in the A2P (application-to person) sector. To date, OTT providers have not been able to derive enough revenue from advertising, and therefore must devise new strategies, such as offering diversified services beyond simple messaging; an example is mobile payments.