Tanla Platforms ~ Leading player in the fast-growing CPaaS market

I recently read through concalls of Route, Tanla and below are few notes on the business landscape:

• Both operate on very similar businesses in CPaaS . The domestic industry might grow around 20-35% for the next 5 years.
• Route wants to expand it offering globally whereas Tanla wants to maximize on the domestic opportunity.
• They provide APIs to clients that facilitate them to provide communication services like SMS, Whatsapp Business, Video Call Support integration etc. Bulk of the revenue still comes from SMS, voice.
• They do so by being an interface between client apps and operators(mainly telecom companies but also companies like Meta etc)
• Twilio has a global lion’s share however it’s not much penetrated with domestic Indian clients as its plans are expensive.
• The competitive scope is very intense(more so globally) which can lead to both companies having margin pressure.
• Recently telecom companies have started poaching clients from these CPaaS companies by directly offering them their new CPaaS products. For Example, Airtel IQ has already launched and Jio will also come up with a similar offering. For a client this saves them money by directly integrating with telecom operators rather than Route/Tanla as the middle layer. However, the integration and customer support etc might be handled much better by Route/Tanla as it’s their niche focus area.
• Significant expense still goes to telecom operators. Margins can get impacted if there’s cost pressure from operators.
• Both companies still generate a significant revenue from SMS business however that might be at risk if RBI gives permission for push notifications etc to app providers. However cost of SMS is still very cheap in India and push notifications can’t replace OTPs etc in the near future as it is more secure way of authenticating.