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The CPaaS opportunity for MNOs

Business messaging services for operators have seen significant growth in terms of volumes and revenues in recent years. Analyst firms continue to predict growth in the sector for years to come, as enterprises and their customers switch from traditional email and voice communications to interactions using different forms of mobile messaging. Juniper Research, in fact, projects the value of the CPaaS market at $29 billion by 2025.

For businesses CPaaS allows them to engage their customers on a channel that suits that customer. This might be in-app, by text message or even with video chat. This type of experience enhances the relationship between the business and the customer, builds brand loyalty and increases return visits and purchases. 

What is included in this article?

  1. What is CPaaS for MNOs?
  2. Why MNOs are perfectly placed to revenue create from CPaaS
  3. What are the features of a great CPaaS solution
  4. Why business customers will adopt CPaaS in large numbers this year 

What is CPaaS for MNOs?

Communications platform as a service (CPaaS) is an omnichannel communication delivery model that allows organizations to automate voice, video and messaging to customers. 

CPaaS is currently being sold directly to businesses so CPaaS providers such as Sinch and Twilio. For MNOs these businesses are already customers of theirs so it makes it a lot easier to sell CPaaS as long as they have the product to do so. Up until now the huge revenue potential of CPaaS has been missed by MNOs. Aggregators, media companies and facilitating operators typically took the share of the revenue. This is despite the fact that they are not the ones doing actually delivering messages, MNOs are. Now however, there are better CPaaS offerings that MNOs can leverage to sell directly to their business subscribers and unlock the full potential of CPaaS revenue without the middle men. 

A2P SMS revenue is under threat from OTT messaging such as WeChat, Whatsapp and Viber. Person to person messaging has seen a steep decline in that time but A2P SMS is on the way back now with the rise of one-time password use cases. The battle for business messaging continues between SMS messaging and OTT messaging. Here is where MNOs can actually benefit from the growth of OTT messaging. By offering a CPaaS platform to their business customers MNOs can capture the revenue from OTT messages in addition to the A2P SMS revenue they already get.

Why MNO’s are perfectly placed to revenue create from CPaaS

MNOs are perfectly positioned to benefit from what is happening now with CPaaS for a number of reasons. 

Firstly, MNOs are closest to businesses that want to use this type of service. In many cases they are simply upselling a new product to their existing customers. 

Secondly, MNOs have control over messaging termination services. SMS and MMS messaging will continue to dominate the channel mix of CPaaS for the coming years as OTT messaging, Voice and Video start to become more prominent. This is a strong selling point that ensures security, redundancy and high-availability, all requirements for industries like Banking and Healthcare. MNOs have greater control and flexibility over their own termination fees so they can adjust them to suit the volume and type of business messaging they are selling on their network. 

Finally, as already mentioned MNOs have existing relationships with businesses as they are already subscribers or might have been subscribers in the past. For MNOs to make an upsell to a business is far easier than finding new business customers in the marketplace. 

What are the features of a great CPaaS solution?

  1. A simple UI for business users’ marketing and sales departments. This includes the ability to create campaigns that serve different purposes and via multiple channels. For example, a campaign builder will have an interface that allows you to create a customer support interaction to be sent by SMS and Voice. Alternatively, the campaign builder might create a one-time passcode workflow for security purposes. 
  2. A complete set of channel offerings including SMS, OTT messaging, Voice, Chat, Video and In-app. CPaaS is not one channel and businesses need to be able to use a variety of means to get to their customers where they are, and in a way that is appropriate. Some use cases might demand in-app messages, while others might require video-enabled help desks.
  3. The ability to control security on the network. CPaaS is high volume by its nature and fraud messages designed to steal money or information from end-users is always a risk event.  Without proper security protocols and monitoring in place CPaaS can quickly be undermined as a trusted communication channel. 

Why will business subscribers adopt CPaaS this year?

2023 will be the year when CPaaS solutions are adopted in an ever growing percentage of businesses. Marketing depts are looking for new channels to reach end-customers as email and advertising are losing effectiveness. There are a number of reasons supporting this growth. 

  1. CPaaS is an effective channel with higher user penetration and open rates above 90%. Mobile phones make SMS and OTT messaging hard to ignore, especially compared to email channels.
  2. The industry narrative is moving this way. This ‘soft pressure’ is growing all the time as more and more industry column inches and conferences are dedicated to the potential of business messaging. 
  3. The CPaaS solutions are becoming better and more user friendly. As CPaaS solutions incorporate more channels and easier to use platforms the adoption rates are increasing. 

If you would like to talk to us about business messaging or CPaaS for your network and subscribers then we would be happy to discuss your needs and deliver the right CPaaS solution for your business.

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