Three ways to evolve and monetise SMS
We’re no longer surprised that many consumers – that is, smartphone users like you and I – have lost interest in SMS. When you can instantly message your friends and share edited photos, or HD video call a colleague on the other side of the world, why would you return to the basic text message for person-to-person (P2P) communication? Global LTE roll-out is gathering momentum, and all-you-can-eat data plans are growing in popularity. As a result, OTT messaging apps reign supreme in the P2P messaging space.
Operators must therefore look beyond the P2P space, and unlock the real value of SMS – for application-to-person (A2P) messaging and rich communication services (RCS). Operators are in the envied position of having considerable customer bases and network infrastructure. The next step is acknowledging consumer trends and enterprise needs, and monetising SMS. Here’s how:
Back RCS to address the OTT threat
The next generation of SMS, RCS, has the potential to update and enhance interactions between businesses and their customers. The protocol adds multimedia capabilities to messaging, including photos, video and visuals. The sender will be able to see if the recipient has received the message, and will be able to more easily send messages to large groups of recipients.
RCS allows big brands (such as airlines, train operators and hotel chains), to send multimedia like boarding passes, e-tickets, and check-in information with rich images, to customers via SMS. In the future we could see RCS integrated with payment capabilities, providing a new sales channel and a convenient means for consumers to transact with brands.
Industry-wide support is needed to encourage the uptake of RCS and make it a real contender to OTT alternatives. The GSMA’s Universal Profile provides an open, consistent and global service and is backed by a growing number of operators and vendors worldwide. The GSMA also has an active RCS Initiative, allowing participants to discuss and develop the service, conduct trials, and deploy RCS commercially.
Take the long view
Change doesn’t happen overnight and operators shouldn’t expect SMS revenue to make an instant U-turn. RCS and A2P offer an opportunity for operators to expand their messaging business, but should be seen as part of a multi-year strategy that delivers growth in the mid-to long-term.
This attitude should also dictate decisions regarding the monetisation of A2P. Over-pricing the service will stunt adoption and drive businesses to alternative (i.e. OTT) means of customer engagement. The right price point needs to be set, country-by-country, to maintain and grow A2P volumes and sustain its commercial viability. We’re currently in discussion with operators regarding this, and think there’s an opportunity to offer multiple A2P rates, depending on the type of traffic.
Maintain your fraud defenses
Monetisation of A2P SMS will only continue if operators maintain their defenses against fraud, including using SMS firewalls. Fraud poses a seemingly never-ending challenge to operators, with criminals always developing new ways to bypass firewalls and terminate traffic to alternative networks, preventing revenue from reaching the operator.
The industry can’t live without firewall technology, though. For optimum performance and protection, firewall solutions should be well-placed, well-managed, and updated and enhanced on a continuous basis, helping operators stay one step ahead of fraudsters.
Participating in groups like the Messaging Ecosystem Forum will help further the fight against fraud by promoting collaboration and knowledge-sharing across the industry. Working together – whether in industry groups, using crowd-sourced platforms, or partnering with specialists – will also allow operators to evolve their SMS business more generally, and create a robust, viable revenue stream for the long-term.
