“N4 per SMS”: MTN, Airtel, Others to Suffer $3bn Messaging Revenue Loss to WhatsApp

“N4 per SMS”: MTN, Airtel, Others to Suffer $3bn Messaging Revenue Loss to WhatsApp

  • A new report has revealed SMS messaging revenue by telecom operators is in danger
  • The report stated that messaging platforms like WhatsApp, Telegram, and others threaten the revenue of telcos
  • It predicted that the new platforms would experience considerable revenue in five years

Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

There is a projection that over-the-top (OTT) business messaging traffic will hit 375 billion messages in 2028, and 100 billion messages in 2023 are expected to reduce the quality of SMS networks.

The development could cost telecom operators in Nigeria and elsewhere a revenue loss of over $3 billion in SMS business messaging revenue in the next five years.

MTN, Airtel, SMS, WhatsApp
Nigerian telecommunication companies face challenges from messaging platforms Credit: Luis Alvarez
Source: Getty Images

Nigerian telcos earn big from SMS, others

SMS is a huge source of revenue for telcos in Nigeria, pegged at N4 per SMS by the telecom regulator, the Nigerian Communications Commission (NCC).

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According to local reports, Nigerian telecom users spent about N3.3 trillion on calls, data, and SMS in 2022, NCC said.

The NCC disclosed this in its 2022 Subscriber/Network Data Annual Report.

Legit.ng reported that the total number of active subscribers rose from 195.4 million in 2021 to 222,571 million active voice subscriptions as of December 2022, an increase of 13.86% yearly.

Nigerians exchange 14 billion SMS messages in 2022

The NCC report showed that about 14.09 billion SMS messages were sent, and about 11.84 billion were received.

It was also disclosed that MTN recorded the highest number of text messages exchanged.

The report said that International SMS sent as of December 2022 was 59,571,547, while the total number of SMS received was 459,329,782.

Pressure mounts on Nigeria telcos as WhatsApp dominates messaging

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The Guardian reports that Juniper Research said in a new study that pricing was critical to OTT business messaging growth, noting that reduced SMS network quality is driven by rising fraud. In contrast, SMS prices by operators may grow to maintain revenue amid slowing demand for business messaging traffic.

An OTT media service is offered directly to videos via the internet.

Top players include Amazon, WhatsApp, Netflix, and Skype.

The report asked app vendors to deploy pricing strategies that woo high-spending businesses away from established SMS channels.

It stated that the strategies must separate traffic by uses, charging a premium to enterprises for mission-centric traffic such as Multi-factor Authentication (MFA).

The research predicted a significant OTT business messaging expenditure for retail, from $790 million globally in 2023 to over $2.6 billion by 2028.

It asked OTT messaging vendors to incorporate data from other retail channels into OTT business messaging activities, and in doing so, vendors could position their apps as a critical channel for retailers’ eCommerce strategies.

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Nigeria ranked 7th on global mobile phone usage amid high data costs

Legit.ng reported that Nigeria ranked seventh in the world for mobile phone usage and eleventh for internet reach, according to the Nigerian Communications Commission (NCC).

Umar Danbatta, the executive vice chairman of the commission, disclosed this at the "Emerging Technology Forum" for stakeholders in the telecommunications industry on Thursday, August 24, 2023, in Abuja.

Recall that the number of approved phones in Nigeria by the Nigerian Communications Commission (NCC) rose to 2,155 as of July 2023.

Source: Legit.ng

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