Telco Insights - The Impact of the Recent WhatsApp Outage on the Business Messaging Market

October 2022

Telecoms & Connectivity

Juniper Research

Analyst House

On the 25th of October 2022, WhatsApp suffered a service outage that left users in several countries unable to use messaging or voice functionality for over two hours; leaving business messages sent via WhatsApp for Business undelivered.

In May 2022, WhatsApp announced that its new API (Application Programming Interface) was now available to all businesses, rather than those who meet specific criteria. The API removes all need for on-premise equipment, with traffic being managed via a cloud-based service. Additionally, it will add the ability to implement ‘click-to-chat’ links in company websites and the ability to run multiple concurrent chats.

Timescales: October 2022
Region(s): Select countries

Juniper Research’s View

Aside from its ubiquity, SMS’s biggest strength is the trust in the business messaging space it has established amongst brands and enterprises. For mission-critical messages, such as OTPs (One Time Passwords) and MFA (multi-factor authentication) traffic, the ability to guarantee termination is key for these users and the length and extent of WhatsApp’s outage highlights how trust in a channel, such as WhatsApp, can be easily devalued through incidents such as this. An inability to send these messages will result in enterprises looking to channels they perceive as more reliable.

Notably, WhatsApp, and other OTT (Over the Top) messaging apps are becoming increasingly important communication tools for enterprises alongside established telecommunications services. As a result, the additional impact of these outages on consumers cannot be understated. From an enterprise’s viewpoint, the role that CPaaS (Communications Platforms as-a-Service) platforms play is crucial; they enable these brands and enterprises to explore the use of OTT channels whilst being able to fall back on to the ubiquity of SMS, commonly referred to as the omnichannel approach.

i. Diminished Trust in the WhatsApp Channel

The main concern for WhatsApp will be any diminished trust that enterprises have in the channel since the outage. For comparison, there are few instances in which SMS have long-lasting outages. Indeed, this owes to the large network and infrastructure that is needed to provide inter-operator connectivity that provides the routing for SMS messages. In the event of a failure; a zero-hop connection between operators, traffic can be rerouted to still be terminated to the intended audience within a reasonable timeframe.

However, this is not the case for WhatsApp for Business. Meta, the parent company of WhatsApp, owns the entirety of infrastructure that is responsible for the routing of messages. As an OTT application, the traffic is sent through the data plane of mobile networks; therefore aside from an Internet connectivity failure, WhatsApp’s infrastructure represents a single point of failure for WhatsApp for Business. Given this recent outage, we expect Meta to invest in further redundancy measures to ensure that traffic can be rerouted in a similar event in the future.

ii. Ramifications for Other Messaging Technologies

Juniper Research forecasts that the total number of directly connected A2P SMS messages sent will continue to grow; increasing from 1.5 trillion in 2022 to 2.1 trillion by 2027. Whilst P2P messaging will maintain its transition away from SMS towards rich media messaging applications, Juniper Research anticipates that the channel’s ubiquity will ensure that A2P traffic continue to increase.

WhatsApp, and other OTT channels, cannot compete with SMS in all industries; the biggest use case for messaging is MFA, which is increasingly being used for the security of digital products and solutions. This is done by sending out a one-time password to a user; essentially using their MSIDSN (Mobile Station International Subscriber Directory Number) as the unique identifier.

In 2022, Juniper Research expects over 50% of A2P SMS traffic to be attributable to MFA-related use cases. Given the outage and the demand for guaranteed termination, WhatsApp faces an uphill struggle in migrating this traffic away from operators and will limit future growth of OTT business messaging.

Additionally, when looking at the reliability of messaging technologies, it is important to look at the use of other messaging technologies. Figure 1 demonstrates that there are more active users of OTT messaging apps than there are any other channel. However, the usage of OTT apps is in large parts driven by the ecosystem that has developed in the Asia Pacific region; WeChat (China), LINE (Japan) and Kakao (South Korea) all represent channels that are more appealing than SMS.

However, these OTT apps are not immune to outages or downtime, despite their much more established nature than WhatsApp; it was only the previous week that Kakao, the most prominent messaging app in South Korea, also experienced service disruption due to a power outage at a service facility. However, this disruption had further reaching impacts; essentially acting as a super app which includes payments and chatbots for information. As a result, eCommerce and payment activities were essentially halted during this period; having a negative impact on many B2B industries.