For the last 22 years, SMS has been a vital part of operator offerings, although the scope and type of messages being sent back and forth has changed completely.
In recent years, A2P (application-to-person) SMS has seen rapid year-on-year growth offering great revenue streams to enterprising operators, with many embracing A2P messaging with a view to entering exciting new enterprise markets.
A2P SMS is a service in which an application sends an SMS to a mobile subscriber. Particularly prevalent with web-based applications, notifications are the most common A2P SMS use case. This includes marketing messages and information alerts used by sectors including banking, tourism, healthcare and entertainment. SMS boasts multiple advantages for businesses compared to competing technologies, including having a global reach and a high engagement rate.
With the A2P’s market value forecast to expand from around $53.7bn USD (2013) to over $70.32bn USD by 2020 (according to a market report published by Transparency Market Research, January, 2015), an increasing number of operators are now looking for ways to ensure that they too have a slice of this lucrative SMS cake. However, many are still unsure of how they can best monetise these services.
One way mobile operators are able to increase their revenue streams in this area is by minimising traffic using grey routes, which are essentially a route legal for one party but illegal for the other. Typically, grey routes are a method of sending cheap, bulk SMS abroad via other countries which avoids the payment of an interconnecting fee. Customers are able to charge a minimal fee because the networks are unpaid, however messages risk delay (often indefinitely) due to the convoluted routes they are forced to take.
In May this year, BICS launched EasyConnectSMS, a solution to help smaller OTT players and A2P providers roll-out SMS services. EasyConnectSMS enables a wide range of communication service providers, including SMS aggregators, SMS gateways, smaller OTT players, A2P providers and application developers to quickly launch international SMS services in a fast and cost-effective way, thereby providing an alternative to grey routes.
Whilst SMS services previously focussed on P2P (person-to-person) messaging exchange, the growth of OTT players in the consumer market has shifted the focus of SMS to A2P. Competitive rates and reliability in terms of successfully reaching its target audience means that, providing the use of grey routes can be blocked, the potential of A2P messaging is yet to peak.
An article by Bart Vandekerckhove, Head of Mobile Messaging at BICS | 27th of October 2015