OTT business will force telecom operators to post less annual revenues from voice and data services that are expected to dip to $785 billion by 2022 from $837 billion in 2017.

The decline in telecom operator revenue is due to further migration to OTT  messaging and social media services, with data bundle pricing erosion also expected to impact significantly on revenues, according to a new study from Juniper Research.

Operator text messaging is trusted more for business-to-consumer communications than in-app notifications and over-the-top (OTT) messaging applications like WhatsApp, Facebook Messenger and HIKE by Android smartphone users in India, according to a research report from Strategy Analytics.

WhatsApp and Facebook Messenger are popular for person-to-person communications, said Nitesh Patel, director at Strategy Analytics.

Rich Communication Suite (RCS) promoted by GSMA is supporting operator messaging for evolving beyond text messaging. RCS will be positioned as a business communication channel.

David Kerr, senior VP at Strategy Analytics, said RCS must overcome challenges including lack of support for RCS on iPhones, limited RCS reach domestically and internationally, and competition from OTT messaging platforms.

Juniper Research has identified new revenue opportunities and costs savings assisting telcos to sustain, or even increase, margins. The study claimed that the opportunities afforded by the IoT (Internet of Things) should enable operators to increase revenues from that sector by over $8 billion by 2022.

A2P messaging adoption across a number of key verticals including marketing, banking and healthcare should result in a revenue generation of an additional $8 billion to global telecom operators.

Telecom operators should be looking at network virtualisation, the implementation of next-generation firewalls and improving CRM (Customer Relationship Management) as part of their strategy to cut costs.

AT&T and BT, among other 15 leading operators across Europe and North America, are in a position to implement innovation strategies.

“AT&T is a market leader in terms of IoT implementations and adoptions, while both AT&T and BT are at the forefront of research into and deployment of virtualisation of the network,” Research author Windsor Holden said.