Our latest report for tyntec, on the A2P SMS global opportunity, reveals that only 25% of mobile operators have made the necessary network investment to monetise the A2P SMS traffic. As mobile operators explore revenue generating possibilities such as mpayments or mHealth, to offset the decline in voice and peer-to-peer messaging revenues, it remains somewhat baffling that the majority of them have overlooked the multi-billion dollar opportunity that is A2P SMS traffic that already traverses their networks undetected.
There are a number of explanations as to why mobile operators have been slow to jump on the A2P SMS bandwagon. These include hampered decision-making due to having messaging teams across multiple internal divisions, staffing shortages, simply failing to prioritize A2P, and an unwillingness to invest in messaging infrastructure. However unfortunate timing could also be to blame.
The unfathomable popularity of OTT messaging apps forced mobile operators to try a multitude of strategies to combat the growth of OTT services and protect their P2P messaging revenues. By 2011-2012 the tactics employed by MNOs ranged from blocking OTT traffic or introducing an OTT-related data usage tariff, developing their own white-label OTT-based offering, to looking to provide an advanced range of messaging services, such as SMS forwarding, SMS signature, and SMS blacklist for unwanted SMS.
In 2012-2013 the strategies included ways of capitalising on the OTT communications opportunity, such as OTT-to-SMS on-net termination and, more recently, efforts to partner with OTT providers.
In 2014 mobilesquared research revealed that three-quarters of mobile operators claimed to have had an OTT communications strategy in place. But did this OTT mobile operator strategy come at a price? That price being their delayed entrance into the enterprise A2P SMS space.
Around the same time in 2012 when mobile operators were intent on facing their OTT competitors head-on, the key to unlocking the multi-billion A2P SMS opportunity was introduced. The 2015 A2P industry research points to 2012 as the year when the first next-generation SMS firewall (or filter) was launched, with the capability of detecting grey route traffic and illicit types of SMS traffic. (The inference here is that SMS firewalls developed before 2012 are incapable of providing the message visibility required.)
Therefore, MNOs have suffered from a misallocation of resources, focusing on protecting P2P messaging revenues as opposed to driving the A2P messaging opportunity. But with billions of dollars in the offing, it’s never too late.
Click here to read the full report, produced for tyntec by mobilesquared.