Telecom News Roundup: September 2023

3 min read

As September unfolds, the telco landscape has witnessed some intriguing developments. Dive into our digest and keep abreast of the most recent happenings and discussions in the industry!

Brand Spend on A2P SMS Messaging to Peak in 2024 Unless Mobile Operators Change Pricing Strategies 

Mobilesquared’s report indicates that unless mobile operators change their pricing strategies, brand spending on A2P SMS business messaging will peak in 2024. The surge in exclusivity deals between mobile operators and aggregator partners has led to pricing increases, escalated fraud levels, and negatively impacted brands. Additionally, Mobilesquared’s alternative view included in the report projects that recent market developments will cost the A2P SMS industry $14.36 billion by 2027, an average of $7.87 million daily from 2023 to 2027. 

Following the pandemic, almost 10% of global businesses started using SMS, but this growth may plateau in 2024 due to recent developments. Mobilesquared has also launched a quarterly briefing, ASPIR (A2P SMS Pricing Impact Report), to monitor the impact of price increases on fraudulent traffic from a brand’s perspective.

Nick Lane of Mobilesquared warns that mobile operators need to understand the actual value of SMS to brands compared to other channels like email, push notifications, and WhatsApp, or they risk missing a massive opportunity.

RCS User Growth to Drive $15bn in New Messaging Revenue by 2028 

The increased adoption of communication platforms like CPaaS is projected to cause a rise in global active RCS users from 930 million in 2023 to 1.1 billion in 2024, according to Telemedia and Juniper Research. Despite iOS devices not yet supporting RCS, it is expected that 50% of mobile subscriptions globally will be capable of receiving RCS business messages next year. RCS enables advanced business messaging services, such as chatbots and payments, over operator networks.

The growth in RCS business messaging is not expected to cannibalise existing SMS traffic, but will instead create new use cases, such as conversational commerce, generating over $15bn in additional messaging revenue for operators between 2024 and 2028. North America is predicted to account for 36% of global RCS revenue by 2028, driven by the region’s high reliance on mobile messaging among enterprise users.

To maximise messaging revenue, the report suggests that RCS vendors develop a call-to-action model, receiving revenue per purchase via RCS, and form partnerships with the largest online retailers to promote RCS as an alternative online retail channel to end users.

Apple Might Yet Adopt RCS in 2024

Google has been pressuring Apple to adopt RCS and improve iMessage interoperability for quite a while now. While the EU’s DMA forced Apple to adopt USB-C for iPhone 15, raising hopes for mandatory RCS integration into iMessage, Apple has avoided this so far. The DMA aims to protect against barriers to entry, lack of competition, and interoperability issues imposed by big tech companies.

The EU identifies six companies, including Apple, as gatekeepers, with 22 services qualifying as gatekeepers. Although iMessage was initially given gatekeeper status due to its lack of RCS support, Apple contested this successfully. However, the EU is still considering the gatekeeper status of iMessage and Microsoft’s Bing, Edge, and Advertising businesses and will decide within five months.

If the EU mandates RCS support for iMessage by February 2024, Apple will have until August 2024 to ensure DMA compliance. This would improve interoperability with other apps like Google Messages. However, Apple could enable RCS only in the EU, aligning it with competitors like WhatsApp. Meanwhile, tech companies have six months to modify core services identified as gatekeepers, with non-compliance fines of up to 10% of global turnover or 20% for repeated violations.

Global Contact Centre AI Spending to Hit $18.6 Billion in 2023 

According to Zawya, Gartner predicts a 16.2% rise in global spending on contact centre (CC) conversational AI and virtual assistants to $18.6 billion in 2023, despite a temporary investment growth dip. The market is the fastest-growing segment in the contact centre forecast, driving 24% growth in 2024. Although most customer service interactions are augmented with CC AI, Gartner estimates CC AI will handle 3% of interactions in 2023, rising to 14% by 2027.

Budget constraints in 2023, due to economic and geopolitical uncertainties, will slow down premises-based contact centre upgrades. However, key customer-facing projects and initiatives may still be prioritised, facilitating funding for contact centre as a service (CCaaS) projects.

Gartner anticipates accelerated CCaaS investment growth as decision-makers adopt cloud-based capabilities to modernise operations. This includes the adoption by large contact centres, which have been slow to adopt CCaaS. Modernisation will involve implementing CCaaS solutions to support a broader mix of communication channels and increased utilisation of advanced tools and conversational AI capabilities.

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