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Fraud and inefficiencies to cost CPaaS $1.4 billion by 2026
Fri, 21st Oct 2022
FYI, this story is more than a year old

Revenue leakage from fraud and platform inefficiencies will cost Communications Platform as a Service $974.3 million in 2022, rising to $1.4 billion in 2026, according to a new report from XConnect.

The report, Are Your CPaaS Revenues Under Threat?, shows that despite this estimated rise, over a quarter of respondents believe that they are not susceptible to losing revenues to fraud or platform inefficiencies. 

Mobilesquared conducted a survey of 75 Communications Platform as a Service providers and mobile operators on behalf of XConnect. XConnect's goal was to establish an understanding of the biggest barriers to growth for CPaaS providers and identify future revenue trends. Respondents were located across the globe.

According to the research, voice is the channel expected to experience the greatest threat from fraudulent practices and platform inefficiencies, accounting for 34% of total fraud in 2022, and 39% by 2026. Termination rate charges were identified as the biggest threat to voice traffic, followed by traffic inflation. Around one-quarter of respondents also identified the supplementary threats of information accuracy and premium rate call back.

"The CPaaS industry is a rapidly expanding market that holds many opportunities and challenges for service providers," says Tim Ward, Vice President Number Information Services, at XConnect. 

"Over recent years, we have seen an increase in threats to omnichannel revenue as robocalling and termination charges affect more businesses than ever before," he says.

"This is driving the need for greater number intelligence services for CPaaS providers," Ward says.

"It is critical that they understand the risk to revenue and have the solutions in place to tackle potential business disruptions and deliver better communications."

The research also revealed that consolidation will play a key role in the growth of Communications Platform as a Service in the coming years. 

According to the research, the biggest business challenge facing Communications Platform as a Service providers is service integration followed by platform integration.

"As digitalisation becomes more far reaching, the changing needs of modern consumers are pushing service providers to innovate and integrate their service offerings," says Nick Lane, Chief Insight Analyst & Founder, Mobilesquared.

"The research shows that traditional voice and messaging service providers need to be ready to enhance their offerings to drive growth in CPaaS," he says. 

"Today's communications market is ready for evolution," Lane says.

"To successfully capture the huge opportunity in omnichannel, service providers must embrace diversity with their end users in mind," he says.

Mobilesquared predicts that voice will be one of the fastest growing CPaaS channels, with the channel attributing some $4 billion to CPaaS revenues in 2022, and $9.5 billion by 2026. Overall, it expects CPaaS to generate revenues of more than $29.7 billion in 2022, rising to $52.8 billion in 2026.