The traditional mobile-messaging value chain is changing as upstart over-the-top (OTT) players upend mobile operators’ highly profitable SMS business. The emergence of virtual phone numbers presents opportunities for IP-based messaging players to compete and cooperate with carriers, adding interoperability to their services. We forecast there will be 27.7 trillion messages by 2016. We expect most of the growth in messaging traffic will come from IP-based messaging services, which will account for 60 percent of messaging traffic. Successful carriers will embrace this new technology and use it to extend the value they are best-positioned to provide: reliability and scalability.