The increasingly self-aware digital consumers expect brands to meet them at their preferred communication channels, making cross-channel enablement a priority for enterprises. This trend has fueled the adoption of CPaaS across all verticals, establishing it as the “fastest-growing segment of the global communications industry,” according to the CPaaS Acceleration Alliance State of CPaaS 2023 report.
At the end of 2022, the CPaaS market was worth $29.7 billion and was expected to grow to $52.8 billion by the end of 2026, as projected by Mobilesquared. Brands are predicted to increase their CPaaS spend by 212% between 2020 and 2026, generating a CAGR of 17.7%.
Moreover, the report estimates that enterprises will be able to engage with an average consumer 3.6 times per day in 2026, compared to once per day in 2022. This can be attributed to the increased adoption of channels complementing CPaaS staples such as SMS, email, Voice, and WhatsApp, which Mobilesquared considers the fourth pillar. Push notifications, messaging apps, RCS, Apple Messages for Business, MMS, social media, video, and WebRTC will also continue to grow at a stable pace in the following few years.
As the CPaaS landscape shifts further from the MNO-specific channels, adopting well-rounded omnichannel solutions for their enterprise clients is increasingly vital. In this article, we look closer at how operators can capitalise on CPaaS deployment.
What value will CPaaS bring in the foreseeable future?
The global value of the CPaaS market has grown rapidly over the past few years and the contribution of rich media messaging formats is becoming increasingly significant in generating CPaaS vendor revenue.
With its established reliability in services such as MFA (multi-factor authentication), SMS traffic revenue will continue to be the cornerstone of CPaaS revenue, accounting for over 50% of all revenue by 2025. Yet while A2P SMS has received a boost in usage with the rise of one-time passwords, we are still seeing more and more businesses, especially SMEs, complement or even replace traditional SMS communication with OTT messengers and RCS. In fact, by 2026, over 20% of CPaaS revenues will be attributable to RCS and messengers, rising from less than 2% in 2021. Rich media channels will continue to expand and account for over $10 billion of revenue by 2025, representing over 40% of CPaaS market value.
As a result, operators that do not adopt rich media services in three years risk missing out on the substantial growth predicted for the CPaaS market. According to Juniper, there are clear opportunities in the CPaaS space beyond merely providing communication services: tourism, finance, and eCommerce services are expected to be the key additions CPaaS providers should implement within the next three years to offer a unique selling point over competitors.
Going beyond the traditional revenue streams
As well-known and trusted household names in their markets, mobile operators are in an excellent position to unlock new revenue opportunities by leveraging their vast networks of direct connections with local and international enterprises.
While at first glance, the growing adoption of rich media channels would mean cutting mobile operators out of the loop, CPaaS provides a way for operators to benefit from the rise of OTTs. By offering a CPaaS solution to their enterprise clients, operators can get revenue from OTT messages sent as well as the A2P SMS revenue they already receive. Partnering with a reliable and trusted CPaaS provider, they can expand their services, add new channels, and improve collaboration with enterprises, becoming the primary point of contact for enterprise messaging.
By adopting such a solution, operators can unleash their potential to deliver more value-added services to their clients. This empowers them to assist enterprise clients in enhancing their customer engagement efforts, whether it’s sales support, marketing, or customer service. Furthermore, the operators’ in-depth knowledge of the local markets can give them an extra edge while working with their clients.
The benefits of adopting CPaaS as a mobile operator
Offering a CPaaS solution to enterprise clients allows for unprecedented messaging market leverage, and boosted revenue is not the only advantage:
Increase A2P traffic
Using CPaaS services can significantly increase the volume of A2P traffic, leading to multiple revenue-generating opportunities. With the availability of fallback options, CPaaS ensures that an undelivered OTT message is not lost. Instead, it automatically switches to more ubiquitous channels like SMS, allowing both to preserve a positive customer experience and generate revenue for operators, helping both them and their clients.
Develop a closer relationship with enterprises
You can establish a closer relationship with your enterprise clients by offering a Communications Platform as a Service (CPaaS) solution. Instead of having a purely transactional relationship where they pay for network traffic based on usage, you can build a long-term relationship with a subscription service business model. This will allow you to provide a more comprehensive service to your clients, leading to increased loyalty and a better understanding of their needs.
Expand your client base by partnering with SMEs
SMEs are increasingly focused on providing personalised and effortless experiences for their customers, catching up with the larger brands by incorporating SMS and other channels for B2C communication. Since many smaller businesses do not possess in-house development capabilities, they opt for CPaaS platforms that offer comprehensive managed services for rich media channels and integrated APIs that enable in-house marketing campaigns and traffic management.
Help your clients raise customer satisfaction
It is vital for enterprises to prioritise their clients’ satisfaction and provide them with exceptional experiences. Offering a CPaaS solution can help achieve this goal, as it allows for comprehensive messaging services that can quickly resolve any issues they may have. By streamlining their communication needs into a single login service, both your clients and their customers can benefit from a vastly improved experience — and as an MNO offering CPaaS solutions, you, too, can reap the rewards of elevated customer experiences.
Creating your own opportunities
CPaaS has grown tremendously as businesses recognise the importance of robust and customisable communication tools. With digital transformation, the rise of remote work, and the continuous evolution of customer expectations, several emerging use cases, such as eCommerce, healthcare, finance, logistics, and travel, have come to the forefront.
Given their growing importance, mobile operators should invest in understanding the unique requirements of their audience. By conducting in-depth market research, you can tailor CPaaS offerings, ensuring a higher adoption rate and customer satisfaction. Offering modular solutions, where clients can choose the specific features and channel combinations they want, can also be a competitive advantage.
Said modularity also lends itself beautifully to cross-selling, further enhancing operators’ product offering, providing more value to clients, and improving retention. Analysing client usage patterns will help identify their needs, as eCommerce businesses benefit from AI chatbots, logistics depend on timely status updates, and finance sector relies on enhanced security features. For clients using only one channel, such as SMS, offering integrations with other channels like voice, video, or social media messaging could be a game changer, and localised messaging or multilingual support can be a valuable addition to the communication needs of brands on the verge of global expansion.
By strategically cross-selling CPaaS services, operators can not only increase their revenue but also solidify their relationships with clients. A client that uses multiple services from a single provider is more likely to stay loyal, reducing churn and ensuring consistent revenue streams. The key is to approach cross-selling with a genuine desire to add value, ensuring that the expanded services truly address the client’s evolving needs.
Reaping the benefits without additional risks
As discussed previously, while SMS remains a vital part of CPaaS offerings, the gradual growth in the adoption of OTTs, emails and RCS, along with other channels, means that operators should not linger with their adoption, if they are looking to preserve and even multiply their revenues. By acting as CPaaS providers, they can offer enterprises access to multiple channels — including their own SMS networks, coupled with additional services like short codes, voice and more.
However, developing a CPaaS solution requires expertise, time and resources. By utilising a pre-existing platform like GMS’ CPaaS solution, operators can avoid the need for major investments and ongoing maintenance. White-label CPaaS solutions offer operators the opportunity to take advantage of all the benefits without any potential hindrances — with a very brief deployment time, so that operators do not miss their window of opportunity.
It is time for mobile operators to expand their revenue horizons, and all you need is to reach out to GMS experts and start your CPaaS journey today!