Today's hyper-competitive telecom (telco) market is driven by differentiation, compelling telcos and MNOs to evolve beyond merely providing connectivity. Telcos need to become ‘techcos’ to survive in today’s complex, competitive, dynamic, and global business environment.

Customer loyalty hangs by a thread in the telecom industry. A PWC survey revealed that 32% of telecom customers stated they would stop doing business with a company if it provides inconsistent experiences. More than half (55%) say they will drop a company they liked after several bad experiences.

As competitive forces increase, players in this sector are leaving no stone unturned to deliver rich communication features, increase responsiveness to customer needs, strengthen external relationships, go to market faster, and leverage business opportunities more efficiently.

Increased and evolving consumerization patterns are compelling telecom services to become more commoditized. Telcos and MNOs have a lot of ground to cover to win the differentiation battle. Apart from proactively refining service offerings in today’s consumer-centric world, they must safeguard the messaging ecosystem and create new revenue engines with data-driven solutions. As always, technology comes to the rescue in the form of Communications Platform as a Service (CPaaS).

In this blog, we explore how Communications Platform as a Service (CPaaS) is a game-changer that empowers telcos to innovate, deliver transformative solutions, and unlock new revenue streams faster.

The Role of CPaaS in Moving from Telco to Techco

Today’s customers demand more from their telecom providers. Beyond network connectivity, customers want innovative services, integrated solutions, and seamless digital experiences. Over-the-top (OTT) service providers have posed stiff competition to traditional telco business models, causing them to become increasingly commoditized.

Individuals and businesses alike want strategic and well-planned methods for personalized communication and omnichannel experiences. Previously, enterprises had to build independent communication infrastructures to extend beyond telephony to SMS, internet-based IM communications, emails, campaigns, and other mediums.

CPaaS is a unified solution that allows organizations to add communication services to their applications without the expense and maintenance overhead of developing their own infrastructure.

CPaaS enables telcos and MNOs to provide all-in-one solutions in addition to their network services. Transitioning from a telco to a ‘techco’ creates more opportunities for enterprises to enhance customer experiences, safeguard the messaging ecosystem, enable data-driven customer journeys, provide omnichannel solutions, and deliver experiences that not only delight but also increase revenue per user.

CPaaS solutions allow multiple users to utilize the services within a separate environment concurrently and enable organizations to scale the volume of their communications easily. With the power of CPaaS, telcos and MNOs can optimize the use of time and money, scale communications seamlessly, and quickly adapt to dynamic market conditions and fluctuating customer preferences.

What Are CPaaS, Market Statistics, and Projections?

CPaaS, or Communications Platform as a Service, is a cloud-based platform that allows telcos and MNOs to gain global traction, increase their service portfolio, and enable seamless and uninterrupted customer journeys.

These platforms are becoming indispensable tools that help telcos deeply understand customer behaviors and sentiments, mitigate churn, and drive sustainable growth by facilitating real-time engagement and enabling them to deliver customer-centric solutions in a fiercely competitive landscape. Reports show that the CPaaS market is anticipated to reach $119.61 billion by 2031, growing at a CAGR of 29.66% from $15.26 billion in 2023.

CPaaS also allows developers to build innovative features and develop custom communication solutions that integrate seamlessly with existing applications, leveraging real-time communication for remote monitoring. It also facilitates remote management and data exchange between devices without the complexities of building a complex back-end infrastructure.

CPaaS is gaining traction as APIs become crucial to business. CPaaS provides an Application Programming Interface (API) that software developers can use to access messaging tools and features made available by the CPaaS provider, enabling them to develop and deliver rich features that solve pressing problems.

For example, a financial institution can leverage a CPaaS platform to send OTPs (one-time passwords) to secure online transactions, account log-ins, and financial information. It also provides businesses access to customer data and offers a 360-degree view of the customer. With this information, MNOs and telcos can facilitate the highest levels of customization of the communication stack and move up the value chain.

More telcos and MNOs are looking at CPaaS to gain global traction, expand collaboration with enterprises, help them manage all A2P traffic channels, and become an integral part of the enterprise communication ecosystem.

By acting as CPaaS providers, MNOs and telcos access multiple channels, including SMS networks, deliver more value-added activities, and refine customer engagement efforts.

How Does CPaaS Work?

CPaaS is a cloud-based platform that uses APIs and offers a toolbox of communication services. The APIs act as intermediaries that enable communication between existing applications and the CPaaS platform. They serve as waiters in a restaurant who take an order (the application request) to the kitchen (the CPaaS platform) and vice versa.

It also provides a toolbox of communication features like click-to-call buttons on websites, in-app voice calls, or voicemail services within applications. Other features like SMS notifications, two-factor authentication, integrating messaging features such as chat functionalities, SMS/MMS messaging, or social media messaging within the application are delivered by CPaaS.

Video conferencing capabilities, live video streaming, integration with video chat platforms within applications, and access to data services like real-time analytics on communication usage or integration with other data sources from CPaaS are other capabilities the platform delivers.

How Does CPaaS Impact Customer Loyalty and Profitability?

Trends in customer behavior show the rising importance of customer centricity. Customers are also more likely to switch providers easily. CPaaS, telecom, and MNOs allow enterprises and B2B engagements to make everyday interactions faster and shift from mere customer interactions to customer delight.

Good Growth Alternatives

CPaaS allows enterprises to scale communications and adapt to changing market conditions and customer preferences faster. Telcos and MNOs can help enterprises access global markets and leverage their customer network to fuel growth alternatives and increase revenues.

Telcos and MNOs can customize communication services, expand their service portfolio, and capitalize on growth opportunities by identifying and servicing customer needs more rapidly with CPaaS platforms.

Create and Embed Rich Communication Features

CPaaS enables companies of all sizes to create and embed rich communication features into their applications. It helps telcos develop new services and subscription models, generate recurring revenue, and move away from reliance on per-minute billing for traditional services.

CPaaS is a robust and integrated solution that allows businesses to embrace digital technologies that enhance customer satisfaction and loyalty.

Improve Cost and Time Efficiencies

Telcos and MNOs can use CPaaS to curtail human resource costs, infrastructure costs, and time-to-market. Robust CPaaS solutions allow these players to drive omnichannel experiences and create opportunities to transform their businesses and build solutions that help them reach their end customers easily.

The immense scalability and infrastructure support provided by CPaaS allows them to build and implement solutions faster without concerns about performance. Developers can also build and implement solutions rapidly using the API ecosystem and deliver rich media and communication services as needed.

Increase Responsiveness to Customer Queries

CPaaS gives telcos and MNOs the leverage of automation and process optimization to improve customer experiences. It helps sales and marketing teams remain connected with potential clients and perform regular follow-ups through automated reminders, meeting customer requirements.

Telcos can facilitate multiple users to use the services within a separate environment at the same time with CPaaS. The use of communication APIs makes interactions faster, allowing businesses to design the ideal customer journeys, solutions, and experiences. MNOs and telcos can also add new channels to their portfolio, expand collaboration with enterprises, and manage all A2P traffic streams with CPaaS.

With CPaaS, MNOs and telcos become partners driving business success and actively contributing to the bottom line. Telcos can make impressive service offerings and provide their clients with more avenues for driving business success by giving them access to MNO’s SMS networks, additional services like short codes, and mobile operator-delivered digital services.

Conclusion

Although a CPaaS platform is highly beneficial and helps businesses manage their communication from a single platform, developing a reliable, secure, and compliant solution requires expertise, time, and resources.

Reliable and experienced technology partners like Prudent Tech provide valuable assistance and support in developing a robust and secure CPaaS platform with enterprise-level security, fraud detection, and immense scalability.

With the right technology and solution design, technology partners can help telcos create differentiation in a crowded market while offering professional support to build an optimized communication solution that also complies with local laws.