3 MIN READ
BY ADMIN | SEPTEMBER 06, 2023
3 MIN READ
BY ADMIN | SEPTEMBER 06, 2023
In the world of communication, CPaaS is all the rage these days. Standing for Communications Platform as a Service, CPaaS enables the easy integration of real-time communication into an existing app or software. Covering all communication channels, from voice and text to video and even chatbots, it is the omnichannel service that has taken the world by storm.
A report by Fortune Business Insights revealed that the global CPaaS market, valued at USD 11.03 billion in 2022, is projected to grow at a CAGR of 28.1% to USD 62.54 billion by 2029. The report identifies three key factors as the primary driving forces of this growth: the increased emphasis businesses place on customer engagement, the advancements in cloud technology and the general trend among industries towards digital transformation.
This strong upward momentum is very good news for telcos who stand to earn a lot off of it. Let’s face it, telcos have not been doing exceptionally well in the recent past. Despite providing valuable voice and data connectivity - which are the very foundations of modern communication - telcos reap the smallest profits in the field. The competition from over-the-top services is intense and the profit margins on voice continues to decline, leaving telcos in a precarious financial position.
CPaaS gives telcos the perfect opportunity to turn things around. It enables them to broaden the scope of their offerings by expanding communication services. It also opens up new revenue streams and facilitates the development of innovative business models. All in all, by adopting CPaaS telcos can significantly increase their earning capacity.
In order to bring in the most money, telcos need to find a CPaaS monetization model that works. The first and most obvious thing for a telco to do would be to start offering an omnichannel communication experience to their subscribers. While most telcos have previously struggled to host omnichannel, with CPaaS, telcos can provide the gamut of communication modes (voice, text, video and other messaging options) in a streamlined and centralized manner. A telco can create subscription plans that incorporate these facets. This will start generating more income in two ways: by increasing the cash flow from existing customers and luring new subscribers.
Telcos can also sell APIs and charge for usage. In this transactional model, there is a fee levied for each API call. Frequency is key for this model to be successful - the greater the number of API calls, the higher the income. Price compression can put a spanner in the works and so perhaps this may not be the most effective earning method.
A monetization model that has proven to be lucrative and reliable is revenue sharing. Once a developer has created a service with CPaaS, the revenue generated is divided three ways: between the developer, telco and CPaaS enabler. While it is true (and fair, of course) that the developers get the lion’s share, the numbers quickly add up for a telco. Plus, it is a passive revenue stream requiring little to no intervention on the part of the telco.
The true value of the revenue share model is its ability to draw in developers who will be attracted by the earning potential. In this way telcos can build a thriving developer ecosystem around CPaaS. With a strong network of developers, a telco can foster collaboration to drive innovation and create new revenue-generating applications.
The telco can also extend its reach to a wide range of industries and businesses. CPaaS has multiple functionalities: automated reminders, in-app calling and messaging, generating one time passwords (OTPs) and chatbots, to name some of the most popular. These services are useful in diverse fields. For instance, hospitals and clinics can send appointment reminders, spas and hotels can facilitate easier bookings through the click-to-call feature on their websites or social media pages, banks can enhance security through two-step verification requiring an OTP sent via SMS, and customer service can be made a lot smoother through automated responses to customer queries. With CPaaS, telcos can increase their scope and garner business from so many more sectors. And just imagine how much money will keep flowing in with the hundreds of revenue-share arrangements in place.
The telcos that have recognized the revenue generating potential of CPaaS and have designed business models to maximize this potential have performed exceptionally well, seeing a considerable hike in their earnings. IdeaMart by Dialog Axiata in Sri Lanka, for example, has 5 million app users out of 14 million subscribers. In the pre-CPaaS days, the telco witnessed the creation of just 85 apps over the course of 12 long years. The introduction of CPaaS catapulted this to over 20,000 apps in 42 months, giving them 20% month-on-month app revenue growth.
Meanwhile in Bangladesh, bdapps, the CPaaS-based app store by Robi Axiata, boasts over 65,000 apps, more than 45,000 app developers and 12 million users. The highest earnings by a single app developer hits nearly USD 2,000 per month. So remarkable are the telco’s achievements, that bdapps has been officially recognized as the National App Store of Bangladesh.
The sad reality for most telcos is that their profits have taken a huge hit recently. Since, in the business world, everything comes down to money, it is imperative for telcos to get their act together and look for new and creative ways to earn. Luckily, there is a ready-made solution: CPaaS. All a telco needs to drive revenue growth is to adopt CPaaS. Honestly, it doesn’t get simpler than that.
