A communications platform as a service (CPaaS) allows developers to add real-time communications features to their applications, such as voice, messaging, video conferencing calls, chatbots, etc., without building backend infrastructure & interfaces. The rising need for contextual communications, including video-enabled help desks, appointment reminders, authentication services, etc., has deepened its application.
The Middle East & Africa Communications Platform as a Service (CPaaS) Market is projected to grow at a CAGR of around 20.47% during the forecast period, i.e., 2023-28. The growing popularity of chatbots & surging demand for real-time communication by different enterprises have created an efficient forum for the market to flourish across the globe during the historical period. Moreover, the year 2020 marked a significant turning point for the vendors in the region due to the tremendous surge in demand resulting from the rapid digitalization of both B2B & B2C service delivery channels, which was largely driven by the COVID-19 pandemic.
In addition, the pandemic has forced many companies across different industries to adopt these solutions to maintain their communication & engagement with customers, partners, and employees in a timely & effective manner. The logistics, pharmaceuticals & healthcare, financial services, and e-commerce sectors, in particular, have witnessed a substantial boost in the integration of these solutions during the pandemic in countries like the US, India, the UK, Germany, etc. As a result, many service providers, like Twilio, Vonage, Sinch, etc., have witnessed consistent growth during 2018-2022.
|Study Period||Historical Data: 2018-21|
|Base Year: 2022|
|Forecast Period: 2023-28|
|Country Covered||UAE, Saudi Arabia, Qatar, Israel, Pakistan, Turkey, Others|
|Key Companies Profiled||Infobip, RouteSms Solutions FZE, CM.com, Telesign Corporation, Unifonic Inc., Ericsson (Vonage), Telestax, Kandy Communications LLC, Karix Mobile Private Limited, CEQUENS, Twilio, CometChat, Others|
|Unit Denominations||USD Million/Billion|
The adoption of chatbots by various sectors like BFSI, e-commerce, tourism, etc., to improve customer service & increase efficiency has also supported the market growth. These chatbots rely on a range of communication channels to function, such as messaging, voice calls, and video conferencing. CPaaS provides a flexible & scalable solution for businesses to quickly & easily implement these communications channels & integrate them into their chatbot platforms. Companies like Bizbike, Starbucks, Belfius, Yellow Class, Foyer, etc., have adopted chatbots for their corporate growth, which helped communication as a platform service to gain traction in the region.
Furthermore, the chatbots can be integrated with multiple communication channels, including social media platforms & messaging apps, providing customers with a seamless & consistent experience across different channels, owing to which more establishments are planning to adopt them, which would further boost the market growth during the forecast period.
Key Driver: Increasing Integration of Banks with CPaaS to Enhance Customer Communication Service
With the growing digital transformation in the banking sector to provide high-quality services to customers, enhanced efficiency in communication & user-friendly experience has increased the demand for cloud-based communication. In digitalization, communication platform as a service is an integral part of the banking sector in the Middle East & Africa as there is high reliability of banks on effective communications to support their operations & offer services to the customers. Therefore, the banking sector is progressively utilizing these solutions for voice & messaging to provide customer services. Moreover, factors such as the burgeoning adoption of contactless payment solutions & the growing popularity of digital banking are further expected to accelerate the growth of the market in the region.
In addition, continuous new software upgrades for better user experiences have been driving market growth. Besides, CPaaS provides real-time notifications & alerts that can be beneficial for preventing fraudulent activity on the customer's account. Consequently, banks in several Middle Eastern & African countries, including Qatar, Saudi Arabia, Oman, and the UAE, are embarking on a major shift towards digital transformation by investing in technology to improve their operations & services such as mobile banking, digital payments, and others.
Possible Restraint: Rising Stakes of Cyber Threats & Data Security to Obstruct the Potential Growth
The security & privacy concerns associated with CPaaS solutions pose a significant challenge to the technology's market growth. This problem emerges as these services rely on internet connectivity & third-party networks to transmit data, making them vulnerable to security threats such as data breaches, malware, phishing, and hacking. Breach risk erodes trust in CPaaS providers, making potential customers hesitant to use their services in areas where confidential information must be conveyed.
Third parties, including service providers, can access cloud data, which raises concerns about data privacy & confidentiality. For instance, in 2021, a Saudi Arabian banking insurance company, GlobeMed, experienced a data breach in which 201GB of data was stolen & later published on a website. The breached data included patient names, numbers, and credit card information.
To address these critical concerns, solution providers are implementing robust data-protection measures such as encryption, multi-factor authentication, and access controls. As a result, these solutions providers' costs rise, which may be passed on to customers, resulting in significantly higher pricing. Furthermore, many potential customers, particularly small businesses or startups with limited budgets, would find these solutions unaffordable, emerging as a new challenge during the forecast period.
Growth Opportunity: Digital Transformation in African Continent to Open New Doors for the Market Players
African countries like Kenya, Nigeria, South Africa, Ghana, etc., are substantially investing in digital infrastructure & are introducing digital transformation plans to drive economic growth, improve public service delivery, and enhance the quality of life for their citizens. The African Union’s Digital Transformation Strategy for Africa (2020-2030) is also providing a wide arena of opportunities for the service providers. The strategy aims at building a conducive environment for digital transformation, promoting digital literacy, encouraging the use of digital platforms, and supporting innovation & entrepreneurship, which would open new doors for market players to integrate their platform in various business sectors like e-commerce, BFSI, etc. during the forecast period.
Key Trend: Surging Use of Direct Inward Dialing for Customer Care
The use of Direct Inward Dialing (DID) is a new trend among business establishments in the Middle East as it provides a modern & efficient solution for managing communication needs. DID enables customers to reach the person or department they need directly without having to go through a switchboard or operator. This can improve the customer experience by reducing wait times & providing more personalized service. Owing to this, Emirates Airlines, Dubai Electricity, Oman Arab Bank, etc., have adopted DID to improve their customer care services.
Furthermore, the adoption of DID would continue to contribute to revenue generation as small & medium-sized enterprises (SMEs) in the region are looking forward to adopting these platforms. The incorporation of Direct Inward Dialing (DID) allows them to list different phone numbers for each department on their website or directory, which creates the impression that the business runs a larger operation & can help to increase customer confidence & trust. Additionally, DID is a cost-effective solution that can help small businesses to manage their communication needs more efficiently, which would continue to contribute to revenue generation during the forecast period.
Based on Communication Channels:
Among them, SMS held a considerable share of the market in the historical period, and the scenario is expected to be the same during the forecast period as well. SMS is a reliable & cost-effective communication channel compared to other communication channels, such as voice calls or email, due to which it is highly preferred by businesses looking to engage with customers in the Middle East. SMS-based two-factor authentication (2FA) is widely used in the region to secure online transactions, which has created a significant market for SMS-based 2FA services.
Moreover, the growth of e-commerce in the region has played a significant role in supporting the expansion of SMS as a communication channel. E-commerce companies often experience fluctuations in the volume of SMS messages they need to send, owing to which they are adopting SMS platforms from CPaaS providers. As a result, e-commerce companies Noon, Souq, Mumzworld, Namshi, etc., are using SMS services platforms offered by these service providers, which supports the market growth.
Based on End User:
Of the above, the BFSI sector dominated the market during the historical period & would also increase at a steady CAGR during the coming years. With the growing number of online customers & a high degree of adoption of the internet-based device among the customer, banking & other financial institution have been attracted towards the communication platform as a service to effectively cater to the customer's needs.
CPaaS offers solutions to enhance customer engagement, streamline operations, and improve security along with services such as fraud prevention by sending automated alerts, two-factor authentication, account balance & transaction, and loan & credit application, due to which the BFSI sector is progressively adopting these solutions.
Geographically, the market expands across:
The market in the UAE is expected to grow rapidly in the coming years, driven by the increasing adoption of cloud-based solutions & the growing demand for real-time communication & collaboration tools. Some key players in the UAE CPaaS market include Twilio, Nexmo (now Vonage), Plivo, MessageBird, etc. These companies offer a range of communication APIs & developer tools that enable businesses to easily integrate messaging, voice, and video capabilities into their applications & workflows.
Various providers, such as e& enterprises, Vongae, etc., have extended their services in the country in line with the growing demand for digital platforms among businesses, which has resulted in the rising number of these solutions offerings for various industry applications, subsequently promoting the pertinent industry growth.
Regulatory Landscape in the Middle East & Africa Communications Platform as a Service (CPaaS) Market
Governments in the Middle East & Africa regions have been making efforts to promote innovation & entrepreneurship in the technology sector, which could indirectly support the growth of the CPaaS market. For instance, the UAE has launched several initiatives to promote digital transformation, including the “UAE Strategy for Artificial Intelligence” which aims to increase the adoption of artificial intelligence by 2031. These technologies can be used to enhance the functionality & capabilities of CPaaS platforms, enabling them to offer more advanced features & capabilities. The adoption of AI would decrease accidents & operating costs in the transportation sector while minimizing chronic & deadly illnesses by identifying them in the health sector.
Recent Developments by the Leading Companies
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Frequently Asked Questions
A. The Middle East & Africa Communications Platform as a Service (CPaaS) Market during 2023-28 is expected to grow at a growth rate of around 20.47%.
A. Increasing integration of banks with CPaaS to enhance customer communication service are the primary factor driving the Middle East & Africa Communications Platform as a Service (CPaaS) Market during 2023-28.
A. The top players in the Middle East & Africa Communications Platform as a Service (CPaaS) Market are Infobip, RouteSms Solutions FZE, CM.com, Telesign Corporation, Unifonic Inc., Ericsson (Vonage), Telestax, Kandy Communications LLC, Karix Mobile Private Limited, CEQUENS, Twilio, CometChat, and Others.
A. SMS is the leading ‘Communication Channel’ in the Middle East & Africa Communications Platform as a Service (CPaaS) Market.
A. The UAE would present growth prospects in the Middle East & Africa Communications Platform as a Service (CPaaS) Market during 2023-28.
A. Surging use of direct inward dialing for customer care is the key trend shaping the growth of the Middle East & Africa Communications Platform as a Service (CPaaS) Market.
A. The industry's potential end-users are BFSI, IT & telecom, e-commerce & retail, and other industries.
A. Rising stakes of cyber threats & data security are the possible restraints affecting the growth of the Middle East & Africa Communications Platform as a Service (CPaaS) Market.